Telecom Italia targets Vivendi Brazilian unit
TELECOM Italia is preparing an offer valued at as much as €7bn to outbid Telefónica in the race to buy Vivendi’s Brazilian broadband unit GVT, people with knowledge of the plan said.
Vivendi would get a 20% holding in Milanbased Telecom Italia and a stake in the entity that combines their Brazilian units, said the people, who asked not to be identified because the offer isn’t public. Telefónica — which competes with Telecom Italia in Brazil’s phone market — offered €6.7bn, mostly in cash, for GVT on August 5.
GVT, an internet-access provider, would be a source of growth for Telecom Italia and Telefónica as phone-service revenue drops in Spain and Italy amid intense competition. Telefónica’s offer for GVT came months after Telecom Italia CEO Marco Patuano had expressed interest in the unit, people with knowledge of the matter have said.
Brazilian newspaper Folha de Sao Paulo reported that Telecom Italia was set to make an all-stock bid for GVT valued at as much as €7bn.
Vivendi said it had received no offer and had no comment. Officials at Telecom Italia, its Brazilian unit Tim Participacoes and GVT declined to comment. Telefónica representatives didn’t respond to requests for comment outside business hours.
Telecom Italia rose 0.3% to 81.3 euro cents at 9.12am in Milan. Vivendi added 1.2% to €19.42 in Paris and Telefónica gained 1.2% to €11.84 in Madrid. Tim added 0.3% to 10.93 reais in Sao Paulo on Friday.
Telefónica, which offered 11.96bn reais ($5.3bn) in cash plus shares in its Brazil unit for GVT, put forward its bid after people at the company found out about talks between Telecom Italia and Vivendi, people said.
In response, Telecom Italia said that it was studying whether to suggest an “industrial combination” to Paris-based Vivendi, including joining Tim with GVT. It said no offer has been finalised.
Talks have taken place between Patuano and Vivendi chairman Vincent Bollore, people have said.
GVT is working with financial advisers Goldman Sachs Group, said two people with direct knowledge of the matter.
GVT, an internet-access provider, would be a source of growth for Telecom Italia
A 20% stake in Telecom Italia would be worth about €3bn, based on the company’s market value of about €15bn.
Tim has a market value of about $11.7bn.
Responding to Telefónica’s bid earlier this month, Vivendi said none of its units are for sale, though its board will consider the offer at its next meeting. Vivendi’s board meets at the end of this month, in conjunction with its August 28 earnings release.
Telefónica’s bid is centred on GVT, but Telecom Italia has proposed a broader alliance that could include the Italian company distributing content from Vivendi’s media assets, which include payTV provider Canal Plus, people said.