French conglomerate Vivendi has decided to delay the sale of Brazilian telco GVT because it failed to attract offers close to its €7bn valuation, French newspaper Les Echos reported without citing sources.
Reporting Vivendi’s year end results today,…
French conglomerate Vivendi has decided to delay the sale of Brazilian telco GVT because it failed to attract offers close to its €7bn valuation, French newspaper Les Echos reported without citing sources.
Reporting Vivendi’s year end results today, CFO Philippe Capron said that if the group could not secure a good price it would not sell the unit.
A Vivendi spokesperson refused to comment on the media report.
On Sunday Brazilian paper Folha de S.Paulo had reported that Vivendi might agree to a share swap as part of a transaction with DirecTV, the US broadcaster that confirmed previously that it is examining an offer for GVT. If it were to sell to the other bidder, a PE consortium comprising KKR and others, Vivendi would likely retain a stake in GVT. Both measures would be designed to enable the buyers to make a lower cash bid while still coming closer to Vivendi’s valuation of the asset. The paper, which cited unnamed executives involved in the negotiations, claimed that bids are due in mid-March.
Speaking to TelecomFinance today Claudio Aspesi, senior analyst at Bernstein Research, doubted the logic in delaying a sale.
“I don’t think Vivendi will get better offers than now in six to twelve months time,” he said.
Aspesi also said the result of the Italian election yesterday hadn’t helped Vivendi’s ‘sell Maroc Telecom first, GVT later’ strategy.
“The odds for Telecom Italia coming back in for GVT have receded,” he said, citing the economic instability in Italy following the general election.
Andrea Beneventi, an equity analyst at CA Cheuvreux, said that Vivendi was keen not to sell the asset at a price the market would deem low. He said market estimates were between €6bn and €7bn in his view.
“A deal at a slightly lower price followed by a special dividend to investors [or a share] buyback could still be perceived as acceptable by the market,” Beneventi said.
The Paris-headquartered conglomerate hired Rothschild and Deutsche Bank last year for the potential disposal of its Brazilian fixed-line and broadband unit as part of a strategic review.
Vivendi owns two other operators. Its French telco SFR was linked to a potential offer by Numericable again yesterday, but Vivendi reiterated today that SFR was not for sale.
Meanwhile Vivendi’s 53% stake in Maroc Telecom has attracted interest from a number of parties.
Vivendi is still in the process of looking at bids for Maroc Telecom.
Vivendi generated €28.99bn in revenues for 2012. It also reported €3.3bn EBITDA and forecast it would fall to €2.9bn for 2013. GVT generated revenues of €1.7bn and achieved EBITDA of €740m.
DirecTV and KKR declined to comment.
