French media group Vivendi raised its stake in Telecom Italia to 14.9%, becoming the telco’s largest shareholder.
In a statement, Vivendi said that it spent €1bn to increase its holding from a recently purchased 1.9% to 6.66%.
It also said that it…
French media group Vivendi raised its stake in Telecom Italia to 14.9%, becoming the telco’s largest shareholder.
In a statement, Vivendi said that it spent €1bn to increase its holding from a recently purchased 1.9% to 6.66%.
It also said that it received an 8.24% stake from Telefonica in exchange for 4.5% of Telefonica Brasil, as part-payment of the Spanish telco’s acquisition of Brazilian broadband provider GVT.
As a result, Vivendi now owns 14.9% of TI, replacing Telefonica as the Italian incumbent’s single largest investor.
In a separate statement, Telefonica said that its net gain from the TI divestment for the first six months will stand at €380m.
“Vivendi’s capital investment in a major Italian company fits into the strategy developed by the group, which gains a foothold in a country with which it shares the same Latin culture and roots,” Vivendi said.
The company added that the investment represents an opportunity to be present and to expand in a market with significant growth prospects and a very strong appetite for quality content.
“Vivendi intends to support Telecom Italia over the long term,” the Paris-based group pointed out.
In a video interview today, Vivendi CEO Arnaud de Puyfontaine said that the group raised its stake in TI, “because it’s a great company, with a great potential and I’m very proud to get the opportunity to build a strong relationship between a big company in France and a big company in Italy just to prepare for a future that it is going to be great with all the relationships between content and distribution.”
He did not rule out further increasing Vivendi holding in the telco in the future, adding that the company has some “cash and resources” to invest in other types of opportunities that may arise, hinting at potential deals with Sky and Mediaset Premium.
He reiterated that the group has recently divested its telecoms businesses to focus on media and content.
Analysts believe that Vivendi’s tie-up with the Rome-based telco is aimed to ensure wider distribution of content produced by subsidiaries Universal Music Group and French pay-television operator Canal Plus.
“Vivendi’s goal is to become a global leader in media and content. At present, this plan is built around Universal Music Group and Canal+ television content. We do not believe that Telecom Italia in itself is of great interest to Vivendi, but the distribution potential offered by Telecom Italia’s network offers plenty of potential for mutually beneficial agreements,” Rick Mattila, telecoms analyst at MUFG said.
TI to exit Brazil?
Commenting on whether Vivendi would push for Telecom Italia to exit Brazil, De Puyfontaine said he was “open and very flexible”.
Last week, a Bloomberg report suggested that Vivendi chairman Vincent Bollore would be keen to dispose of TIM, Brazil’s second-largest mobile player, in the next two years, and would potentially look to combine the telco with a European rival in the medium term.
However in a statement, TI dismissed the rumours, reiterating that its Brazilian unit is strategic.
“From Telecom Italia’s perspective, a disposal would generate material inflows and probably allow for modest deleveraging, but it would also imply total exposure to its domestic market. A sale may boost the group’s bonds in the near-term, but longer term prospects for the group would then likely come into question,” Mattila said.
For the last two years, there have been rumours that TIM Brasil could be split among the country’s remaining cellcos: America Movil’s Claro, Telefonica’s Vivo and locally owned Oi. Such a move would benefit all three, while avoiding the wrath of regulators.
Mediobanca not to sell stake to Vivendi
Telefonica’s stake transfer follows the break-up of Telco Spa, TI’s former holdco, last week. Further to the demerger, Telco’s former shareholders – Telefonica, Mediobanca, Intesa Sanpaolo and Generali – were free to sell their shares.
Yesterday, Alberto Nagel, CEO of Mediobanca, which is 7.46% owned by the Bollore Group, ruled out selling the bank’s 1.6% stake in TI to Bollore, adding that the stake will be offered to the market by next week.
