Bidding war commences for Vivendi’s GVT
28 August 2014 | Kavit Majithia
Media group Vivendi has received two offers for its Brazilian unit GVT, from European operators Telecom Italia and Telefónica.
The rival bids are expected to spark a bidding war between the two companies, with Telefónica’s offer rumoured to be slightly higher, representing a total enterprise value of €7.45 billion. Telecom Italia, as expected, has made a bid valuing the unit at a total enterprise value of €7 billion.
Telefónica’s first offer was valued at approximately €6.7 billion, but Vivendi is seeking a higher sum as the European operators signal their intent on growing their presence in the lucrative Latin American market.
A decision could be reached by Friday, with Telefónica’s offer set to expire, while Telecom Italia’s bid is valid until September 10.
When rumours of a bid first surfaced in August, Vivendi claimed that none of its subsidiaries were for sale, but it appears the group is now open to divesting the telecoms unit.
Vivendi tried to sell GVT last year, as part of a strategy to move away from the telecoms sector and operate purely as a media and entertainment provider.
As part of widespread consolidation between Latin American and European players, fixed-line company Oi has expressed an interest in acquiring a stake in Telecom Italia’s subsidiary TIM Brasil.
It is thought that Telecom Italia could exit the Brazilian market if it fails to secure a deal for GVT.
Vivendi’s supervisory board is now reportedly examining the two offers.