Vivendi could take reported 20% stake in Telecom Italia in GVT deal

The Vivendi office is seen in Paris on Wednesday, May 17, 2006.Telecom Italia, having confirmed it is interested in acquiring Vivendi’s Brazilian unit GVT, is reportedly preparing an offer, valued at as much as €7 billion, that could see Vivendi take a 20% stake in the Italian telco. 

According to Bloomberg, citing unnamed sources, the deal would see Vivendi thake a 20% in Telecom Italia as well as a stake in a new Brazilian entity combining GVT with Telecom Italia’s Brazilian unit TIM Brasil.

The move comes a week after Spanish telco Telefónica, which holds a stake in Telecom Italia through the Telco holding company, offered €6.7 billion for GVT, with an additional offer to sell part of its stake in the Italian telco to Vivendi once the Brazilian deal was completed.

The Brazilian newspaper Folha de São Paolo reported at the weekend that Telecom Italia was about to make a €7 billion all-shares offer for GVT.

Telecom Italia confirmed its interest in creating ‘an industrial combination’ at the end of last week while stressing that no offer had been finalised.

“In response to the numerous press reports of Telecom Italia Group’s interest in acquiring Brazilian company GVT SA, Telecom Italia confirms that it is undertaking a detailed review to determine whether it may be opportune to submit an offer to Vivendi SA (GVT’s parent company) to create an industrial combination that would include integration of the Brazilian businesses of the two groups,” Telecom Italia said.

“No offer has been finalised or made and any decision to proceed with such a business combination would be subject to the approval of the corporate bodies of Telecom Italia and TIM Participações which have not yet been convened.”

Telecom Italia deputy director Marco Patuano met Vivendi chairman Vincent Bolloré in Paris last week to discuss the matter. Vivendi has previously said that GVT, one the company’s strongest growing units, is not for sale.