Spain’s Telefonica has made a surprise bid for GVT, French media firm Vivendi’s broadband business in Brazil. It has offered 6.7 billion euro.
The Spanish telecoms giant obviously thinks it would be a good fit with Vivo, Brazil’s leading mobile operator, which it owns. The idea didn’t find favour with investors and its shares fell 1.8 percent on Tuesday. Vivendi by contrast gained 3.9 percent.
Some industry analysts feel Vivendi’s chairman and largest shareholder Vincent Bolloré might be open to selling GVT at the right price, even though he has previously said he wants to keep it to work more closely with Vivendi’s pay-TV and music divisions in Brazil.
The French company said none of its units is for sale but it will consider Telefonica’s offer at its next board meeting at the end of August.
Brazil is Telefonica’s second largest cash generator, accounting for a fifth of its revenue.
It has also offered Vivendi the chance to acquire its 8.3 percent stake in Telecom Italia. If accepted, this would help solve the thorny antitrust problem Telefonica has in Brazil where regulators have ordered it to resolve the fact it owns both Vivo and indirectly part of Telecom Italia’s Brazilian mobile operator TIM as well.
Telefonica’s move could also prompt interest from other buyers. When Vivendi tried to sell GVT in 2012, it attracted a bid from a private equity consortium led by KKR and US satellite television provider DirecTV, which is currenly being bought by US telecommunications firm AT&T.