Vivendi cancels GVT sale plan

15 Mar 2013

The Wall Street Journal reports that French media to telecommunications conglomerate Vivendi has put on hold its plan to sell its Brazilian operation, Global Village Telecom (GVT), throwing a spanner into its own objective to refocus its portfolio on its media and content businesses. Despite interest in GVT, the French group is understood to be disappointed with the lower than expected offers it has so far received. People familiar with the situation say the tentative bids are below the EUR7 billion (USD9.1 billion) it had been hoping to achieve in the all-cash deal.

Commenting on the suspension, Vivendi spokesman Simon Gillham said: ‘We decided we’re not going to sell it for silly prices … We’re absolutely convinced we have a great asset. We’re very happy to continue developing it within the Vivendi family.’ However, it is of note that the decision has been taken less than 24 hours after one bidder – DirecTV DTV – announced it was turning its back on any deal, saying it had ‘decided not to move forward in its pursuit of GVT and has withdrawn from the process’.

According to TeleGeography’s GlobalComms Database, GVT’s revenues reached EUR1.72 billion in FY2012, an 18.7% increase compared to 2011; excluding the impact of tax changes (VAT), revenues increased by 35% at constant currency, its parent said. EBITDA was EUR740 million, a 23.1% increase compared to 2011 (+33.4% at constant currency) and EBITDA margin reached the record level of 43.1%, or 45.9% for the telecom activities only. Last year, GVT expanded its coverage to 20 additional cities and currently covers 139 cities. As a result of commercial efforts and geographical network expansion, GVT Telecom lines-in-service reached 8.669 million by 31 December 2012, a 37.0% increase year-on-year. After only one year in operation, its pay-TV service generated revenues of EUR83 million and had 406,000 subscribers. GVT’s share of the net adds of the entire Brazilian pay-TV market reached 11.4%, and when considering only the cities where it operates, GVT’s share of net additions reached 27.7%. Full-year CAPEX was EUR947 million, up 34.3% y-o-y.

Brazil, Global Village Telecom (GVT)