Vivendi launches USD2.9bn takeover bid for Brazil’s GVT

9 Sep 2009

French communications and entertainment group Vivendi today signed an agreement with Swarth Group and Global Village Telecom (Holland), the founding and controlling shareholders of GVT (Holding), a publicly traded company on the Brazilian stock exchange. In a statement Vivendi said the move would now allow it to launch an amicable tender offer for 100% of Global Village Telecom’s (GVT’s) share capital – valuing the deal at BRL5.4 billion (USD2.9 billion). The Brazilian telco is a leading provider of broadband internet access and voice telephony services in the country. The takeover bid is Vivendi’s latest move to ramp up its presence in emerging markets: last month it ended talks to buy a majority stake in the African telecoms unit of Kuwati telecoms company Zain.

Vivendi’s offer is conditional on it acquiring a minimum of 51% of GVT’s fully diluted share capital, as a result of the tender offer. It is understood GVT’s controlling shareholders have agreed to tender Vivendi’s offer a minimum of 20% of GVT’s outstanding shares out of around 30% they currently own. They have also agreed to vote in favour of the waiver of the anti-takeover mechanism provided for in GVT’s by-laws, in favour of Vivendi’s offer. The offer is subject to confirmatory due diligence by Vivendi and Vivendi boards’ approvals – to be completed on or prior to 16 October 2009. The launch of the tender is also subject to Vivendi’s offer receiving support from the GVT board, GVT’s shareholders waiving the anti-takeover mechanism in favour of Vivendi and regulatory approvals registrations, and is expected to take place before 31 December 2009.

According to TeleGeography’s GlobalComms Database GVT, the mirror licence holder in Region II, offers broadband ADSL under the Turbonet banner. GVT operates in around 80 cities in Brazil’s central-southern region and in part of the northern region. It also provides services in the cities of Sao Paulo, Rio de Janeiro and Belo Horizonte, where it serves the corporate market and provides internet services. In March 2003 it signed an agreement with VoIP services provider IXTC, enabling it to access the operator’s global IP network, and in September 2004 it introduced its own VoIP offering. As of 30 June 2009, GVT had approximately 2.3 million lines in service (including voice, broadband, data and VoIP services). GVT’s network includes one of the most extensive local access networks and long distance fibre-optic backbones in the country, supporting the company’s leading position in the next generation service segment and allowing GVT to extend its presence nationwide.

Brazil, Global Village Telecom (GVT), Vivendi