Vivendi trumps Telefonica on GVT buyout with $4.2 billion offer

The ongoing feud between French media conglomerate Vivendi SA and Spanish telecom giant Telefonica SA for the acquisition of Brazil' telecom operator GVT Holdings SA took a sharp twist on Friday, when Vivendi acquired 37.9-per cent stake in the company from its controlling shareholders and third parties.

Additionally, Vivendi announced that it further holds unconditional call options on 19.6 per cent of GVT, by exercising which it would have in total 73.8 million shares corresponding to a majority stake of 57.5 per cent of GVT's voting outstanding share capital.

In accordance with Brazilian law, Vivendi will launch a mandatory tender offer at Brazilian reais ($R) 56 for 100 per cent of GVT's share capital, due to its purchase of the control of GVT. The tender offer notice will provide detailed terms and conditions of the above mentioned transactions.

The public offer which will be presented upon registration with the CVM, the Brazilian Securities Exchange Commission, values the total deal at approximately $R7.2 billion ($4.2 billion).

Vivendi CEO Jean-Bernard Lévy said that the company has long-term plans in Brazil and the acquisition of GVT is in line with the company's strategy for expansion in the developing markets.

Vivendi bought 38.4 million GVT shares or 29.9 per cent, from the Swarth Group and Global Village Telecom (Holland) BV for $R56 per share and purchased 10.3 million shares or 8-per cent from the market. The unconditional call options are for 25.1 million shares at a price of $R55 corresponding to 19.6 per cent of GVT's outstanding share capital.