Vivendi hires banks to assess options for Brazilian asset GVT

17 Aug 2012

French media and communications group Vivendi has hired the investment banking divisions of Rothschild and Deutsche Bank to review the strategic options for its Brazilian telecoms unit Global Village Telecom (GVT), Reuters cites an unnamed source with knowledge of the matter as saying. The unconfirmed report claims that the French group is reviewing GVT’s operational structure to hopefully reverse a 29% decline in its share price since January last year, amid continuing rumours Vivendi could look to sell off units or break up the business entirely.

According to TeleGeography’s GlobalComms Database, in April 2010 Vivendi completed the purchase of virtually all the outstanding shares in GVT – today, an alternative provider of fixed telephone, broadband internet and pay-TV in 120 Brazilian cities. As a result of the purchase Vivendi acquired 93.58% of the free float, boosting its total equity stake to 99.17% of GVT’s shares. The French telecoms and entertainment group originally signed the USD7.2 billion takeover deal in November 2009. The decision came two months after Anatel ratified Vivendi’s takeover of GVT, ‘without constraint’. The watchdog had previously given the green light to the acquisition and in December 2010 Vivendi reached a final agreement with Brazil’s stock market regulator CVM. At the time it was reported that Vivendi agreed to pay the regulator approximately EUR67 million (USD89 million) to conclude an investigation opened by the watchdog following Vivendi’s acquisition of the Brazilian firm. With no attribution of any ‘wrongdoing’ on the French firm’s part, the decision drew to a close a matter that had rumbled on for more than a year.

If Vivendi does look to sell GVT it may attract interest from Telefonica of Spain or Brazilian owned Oi SA, industry watchers say. Representatives for Deutsche Bank, Rothschild and Vivendi declined to comment.

Brazil, Global Village Telecom (GVT), Vivendi