--Vivendi sees Brazilian phone business worth EUR7 billion to
EUR8 billion
--"Multiple" offers expected for the carrier
--Vivendi focusing on media, content businesses
By Luciana Magalhaes
SAO PAULO--French telecom and media group Vivendi SA (VIV. FR,
VIVEF, VIVHY) expects to receive "multiple" bids for its Brazilian
phone company GVT, according to a person familiar with the
process.
No bids have been made yet but offers are expected from
Brazilian and international firms, the person said, adding that
bidders must present their proposals before the end of the
year.
Vivendi won't accept less than EUR7 billion ($8.9 billion) for
GVT and will likely fetch between EUR7 billion and EUR8 billion,
according to a second person with knowledge of the situation. This
person said dates are "indicative, but not deadlines."
A spokeswoman for Vivendi said the company doesn't comment on
market speculation.
Vivendi's management has been looking to refocus on the
company's media and content assets, such as Universal Music Group
and French pay-television company Canal Plus, according to people
familiar with the matter, and is exploring the sale of GVT and its
stake in African phone operator Maroc Telecom.
Better-than-expected results from both its media and
telecommunications businesses pushed Vivendi to bump up its
full-year earnings guidance and eased pressure on the company as it
pursues the strategic review.
The Paris-based conglomerate said Tuesday that it now expects
full-year adjusted net income of 2.7 billion euros ($3.43 billion)
up from its previous projection of more than EUR2.5 billion. The
new figure would represent an 8.5% decline on the year, compared
with prior expectations of a roughly 15% decline.
Vivendi has hired Rothschild and Deutsche Bank AG to manage the
sale process, according to people familiar with the process. Both
banks have declined to comment.
The Brazilian unit GVT provides fixed-line and high speed
Internet services, mostly in southern Brazil, although it has
started expanding into other regions. At the end of the third
quarter it covered 136 cities, with 8.2 million lines in service, a
42% increase from a year ago. The firm launched a pay-TV service
less than a year ago and has so far signed up around 312,000
subscribers.
GVT has itself reported strong results. For the third quarter,
it said revenue was up 23% from a year earlier at 1.1 billion
Brazilian reais ($531 million), while earnings before interest,
taxes, depreciation and amortization were BRL462.9 million, also up
23%.
Among companies that have shown interest in GVT are DirecTV
(DTV), Brazil's Oi SA (OIBR, OIBR4.BR, OIBRC), Mexico's America
Movil SA (AMOV, AMX, AMX.MX), Telecom Italia SpA (TI, TIA, TIT.MI)
and an investment fund of Brazil's Banco BTG Pactual SA
(BBTG11.BR), one of the people said.
Telecom Italia's Chief Operating Officer Marco Patuano said
Tuesday that GVT is definitely something to look at "as you look at
many other things," without offering more details. On Nov. 6,
DirecTV said GVT is a "unique asset" that would offer strong
synergies for its fast-growing Latin America business. DTV has
started looking at the operator's books, but it was too early to
consider a deal or how it may impact DTV's capital return
policies.
Press representatives for America Movil, Oi and BTG Pactual
declined to comment.
--Matthew Cowley in Sao Paulo and Manuela Mesco in Milan
contributed to this article.
Write to Luciana Magalhaes at luciana.magalhaes@dowjones.com