Telefonica and Telecom Italia (TI) are expected to submit rival bids for Vivendi’s Brazilian broadband unit GVT, as its French media group owner is to convene to discuss the situation.
Telefonica is considering a new offer which improves upon its…
Telefonica and Telecom Italia (TI) are expected to submit rival bids for Vivendi’s Brazilian broadband unit GVT, as its French media group owner is to convene to discuss the situation.
Telefonica is considering a new offer which improves upon its original €6.7bn (US$9bn) bid and potentially surpasses an expected €7bn (US$9.4bn) bid from TI, news agencies reported citing sources familiar with the situation.
While some reports have suggested the Spanish incumbent’s improved offer could be as high as €8bn (US$10.5bn), Reuters cited a source as saying it is likely to be lower.
Meanwhile, TI’s expected €7bn offer would, according to multiple reports, see Vivendi receive a stake of up to 20% stake in the Italian telco. The media group would also get a stake in a new unit which would hold GVT and the TI’s local mobile operator, TIM Brasil, according to Bloomberg citing people with knowledge of the matter.
Telecom Italia has reportedly also suggested it could help distribute Vivendi’s media content in Italy and Brazil as an added sweetener.
Telefonica and TI have declined to comment on the matter.
The board of Paris-based Vivendi is expected to discuss the GVT situation at a meeting before its Q2 results are published tomorrow.
Earlier this month, Telefonica, TI’s largest individual shareholder, tabled a €6.7bn proposal – comprising US$5.3bn in cash and 12% of its Brazilian mobile operator Vivo. The Madrid-based telco also offered Vivendi the right to acquire its 8.3% stake in TI for a fixed price once the deal has closed.
A merger of GVT and either Vivo or TIM would create a large converged Brazilian player controlling a substantial share of the telecoms market. Analysts suggest such a move would help either Telefonica or TI offset slower growth in European telecoms markets.
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 asking price of €7bn.
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 remaining telecoms asset.
Meanwhile, a recent Brazilian report claimed Vodafone is looking at entering the Brazilian mobile market, with TIM as its preferred target.
In addition, Brazilian telco Oi today named BTG Pactual as a “commissioner” to explore options to buy TI’s stake in TIM.
