Spanish incumbent Telefonica has submitted a bid of R$20.1bn (US$9bn) to acquire Brazilian fixed-line operator GVT from Vivendi.
The offer comprises US$5.3bn in cash and newly-issued stock in Telefonica Brasil, which operates as Vivo, amounting to 12%…
Spanish incumbent Telefonica has submitted a bid of R$20.1bn (US$9bn) to acquire Brazilian fixed-line operator GVT from Vivendi.
The offer comprises US$5.3bn in cash and newly-issued stock in Telefonica Brasil, which operates as Vivo, amounting to 12% of the mobile operator.
Under the plan GVT would be absorbed into Telefonica Brasil.
Vivendi would also receive the right to acquire Telefonica’s 8.3% stake in Telecom Italia for a fixed price once the deal has closed.
Should the French media company exercise the option it would leave Telefonica with a very small stake in Telecom Italia, which it controlled prior to an exchangeable bond offering last month.
Telefonica acquired the majority of Telecom Italia’s controlling shareholder group, Telco, last autumn. Telecom Italia has its own mobile operator in Brazil, TIM Brasil, and this created an antitrust issue. In December competition watchdog Cade told Telefonica to either reduce its indirect stake in TI or find a new partner to take joint control of Vivo.
Telefonica has given Vivendi until 3 September to decide on the bid, after which it expires.
In a statement this morning, the media company said that none of its subsidiaries were for sale, but that its supervisory board would consider the offer at its next meeting.
Vivendi is in the process of moving away from the telecoms sector after selling its majority stake in Maroc Telecom earlier this year and agreeing to part with French mobile operator SFR. GVT is its last telecoms asset left.
Besides operating Vivo, the country’s largest mobile operator, Telefonica Brasil is also the leading broadband operator in Sao Paulo. GVT is the biggest alternative fixed-line operator in Brazil. A combination of the two would create the country’s largest telco.
Vivendi acquired GVT in 2009 – outbidding Telefonica – but moved to sell it in 2012, only to suspend the process in March 2013 as no bidder was prepared to meet its €7bn asking price.
Vivendi shares have risen 3.2%, Telefonica’s have fallen 1.25% and Telecom Italia’s have dropped 3.64%. Telecom Italia was previously seen as a suitor for GVT.
