UPDATE: Telefonica Brazil Unit In $3.7 Billion Bid For GVT
October 07 2009 - 11:12AM
Dow Jones News
Telefonica SA's (TEF) Brazilian unit Wednesday made an all-cash
bid for Brazilian telecommunications company GVT Holding SA
(GVTT3.BR) that could amount to a total investment of around $3.7
billion, potentially trumping an earlier bid from France's Vivendi
SA (VIV.FR).
In a filing to the Spanish market regulator, Telefonica said its
Telesp unit would offer 48 Brazilian reals ($27.2)0 a share for
GVT, topping the BRR42 a share offer made by Vivendi Sept. 9.
"The price Telefonica is offering seems too high, but if Vivendi
gained a foothold in Brazil, this would be a blow and is best
avoided," Norbolsa analyst Adrian Serrano said.
A Vivendi spokeswoman said she wasn't immediately able to
comment on Telefonica's offer for GVT.
Telefonica said the offer was contingent on it acquiring 51% of
GVT's shares and the Brazilian regulator approving the deal.
At 1413 GMT, Telefonica shares traded 1.2% lower at EUR19.12,
worse than the overall Spanish market.
"GVT would expand our footprint in Brazil and is complimentary
to our existing operations," a Telefonica spokesman said.
Telefonica already operates fixed line and broadband provider
Telesp, but its presence is limited to the state of Sao Paolo. GVT
started business in 2000 and operates in the Brazil's Midwest and
Southern regions, as well as some Northern states.
Telefonica also operates Brazilian mobile operator Vivo with
Portugal Telecom SGPS SA (PT).
Telefonica has relied increasingly on the strong revenue growth
in its Latin American markets as an economic downturn hits its
mature markets in Europe, especially in Spain.
Telefonica is Spain's largest telecommunications company by
market value and customers.
Company Web site: www.telefonica.com
-By Jason Sinclair, Dow Jones Newswires, 34 913958127,
jason.sinclair@dowjones.com
(Ana Garcia and Ruth Bender contributed to this article.)