PARIS--Vivendi (VIVEF, VIV.FR) is suspending the sale of its
Brazilian telecommunications operator after months on the block,
throwing an obstacle into the Paris-based conglomerate's own
objective of refocusing itself on media and content businesses.
While the fast-growing Brazilian unit attracted interest from a
number of companies, offers have come in lower than Vivendi wanted,
people familiar with the process said. Vivendi had been looking for
as much as EUR7 billion in an all-cash deal for GVT, one of those
people added.
"We decided we're not going to sell it for silly prices,"
Vivendi spokesman Simon Gillham said. "We're absolutely convinced
we have a great asset. We're very happy to continue to continue
developing it within the Vivendi family."
Vivendi's suspension of the sale comes as satellite-TV operator
DirecTV--seen as one of the prime bidders--said Thursday that it is
walking away from the table. DirecTV had been eyeing GVT as a way
of bolstering its Latin American operations.
But the company "has decided not to move forward in its pursuit
of GVT and has withdrawn from the process," a DirecTV spokesman
said.
Last week, the company's chief financial officer Patrick Doyle
said at an investor conference that GVT was not a must-have for
DirecTV, and that DirecTV would only go forward if "the economics
are compelling."
The suspension of the GVT auction is a setback for Vivendi's
ongoing effort to reinvent itself. The company has been looking to
sell GVT since summer, when the conglomerate decided to begin
focusing on its media assets like Universal Music Group and pare
back its telecoms assets, in an effort to reduce debt and boost its
stock price.
Since Vivendi first hinted at asset sales nearly a year ago,
saying nothing was "taboo," its stock risen nearly 39%, closing
Thursday in Paris at EUR16.66 a share. But people close to the
company acknowledge that lack of deals--or deals at lower multiples
than expected--could disappoint investors.
Executives had been hoping to close in on at least one deal
before the company's annual shareholder meeting at the end of
April. That deadline may put additional pressure on Vivendi as it
looks to sell another telecom asset: its majority stake in African
phone operator Maroc Telecom.
That sale process remains ongoing, one person familiar said.
Multiple companies, including Korea's KT Corp., Qatar Telecom
and Abu Dhabi-based Eitsalat have expressed preliminary interest in
buying Vivendi's 53% Maroc Telecom stake, though it remains unclear
how close they are coming on price.
Vivendi has been seeking roughly EUR5.5 billion for the stake,
according to people familiar with the matter.
Late last month, Qatar Telecom Chief Executive Nasser Marafih
said in an interview that his company was in "final evaluation" of
a bid for the company, adding he would look at the potential price
over the longer term.
"Sometimes you pay a certain price knowing the asset could give
you more value in the future," Mr. Marafih said.
Any buyer of Maroc Telecom would have to pass muster with
Morocco's government, which owns a blocking 30% stake in the
publicly traded operator, something people close to the company say
could be complicated.
--Dana Cimilluca contributed to this article.
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