* KPN, Everything Everywhere on AT&T's radar -WSJ
* European takeover by AT&T could offset weak growth -WSJ
* Analyst skeptical of successful takeover
* KPN shares up 3.5 pct, reach five-week high (Adds details, analyst quotes, share price)
AMSTERDAM, Jan 17 (Reuters) - U.S. telecoms group AT&T is looking at an acquisition in Europe, possibly of Dutch peerKPN or the UK's Everything Everywhere, to offset weakgrowth at home, the Wall Street Journal reported.
AT&T executives were considering a takeover in Europe, andsome believed an opening existed now to buy a carrier in a majorEuropean market such as Britain, Germany or the Netherlands, thepaper added.
KPN shares, of which 28 percent is owned by Mexicanbillionaire Carlos Slim's America Movil, reactedpositively and were up 3.8 percent at 4.40 euros, rising to afive-week high and outperforming the STOXX 600 Europe Telecomsindex.
Europe's fragmented telecoms market is dominated by nationalplayers which mostly operate local networks, offering economiesof scale after consolidation.
A deal, if one happened, could come before the end of theyear, the WSJ said.
An AT&T spokesman in Europe declined to comment, saying thecompany has a policy of not commenting on rumour andspeculation. KPN declined to comment.
Big telecom companies such as AT&T could benefit from buyingEuropean rivals and create economies of scale, similar to theinternational expansion strategy of British carrier Vodafone, said analyst Jos Versteeg of Dutch private bankTheodoor Gilissen.
"Slim owns almost 30 percent. I don't see him selling now.He is a long-term investor. AT&T doesn't stand a chance buyingKPN," Versteeg said.
"Perhaps they can buy something from Telefonica. Ireally don't see them buying France Telecom or DeutscheTelekom. These are too big. It will be mostly at thefringes."
Indebted Spanish telecoms firm Telefonica listed a minorityof its German subsidiary Telefonica Deutschland inOctober to help reduce debt.
Versteeg did not know whether Everything Everywhere (EE),which is owned by France Telecom and Deutsche Telekom, was alikely acquisition target.
Robin Bienenstock, analyst at Bernstein said AT&T andAmerica Movil had tried to bid together for Telecom Italia inthe past but she saw little chance of AT&T making a takeover inEurope.
"Whilst it's possible I think it's probably only at theearly exploratory stages, and were AT&T to do reasonable duediligence, it seems unlikely such a deal would go through," shesaid. (Reporting by Gilbert Kreijger; additional reporting byRobert-Jan Bartunek in Brussels; Editing by Hans-Juergen Petersand Mike Nesbit)
Vodafone (VOD)