Telefonica to waive TI voting rights as part of GVT takeover; nine banks lined up for capital increase

23 Mar 2015

Telefonica of Spain has waived the voting rights attached to its 14.8% Telecom Italia (TI) stake, Reuters reports, after Brazilian telecom regulator Anatel demanded it do so in return for clearing the company’s USD9.83 billion purchase of Global Village Telecom (GVT) from Vivendi of France. Meanwhile, a separate report from the news agency Reuters suggests that local unit Telefonica Brasil (Vivo) intends to hold a public share offering after it receives full regulatory approval to acquire GVT. The share offering is expected to help finance the deal, the company noted in a securities filing.

Finally, in reIated news, Telefonica has lined up nine banks to run its EUR3 billion (USD3.25 billion) capital increase in connection with the aforementioned purchase of GVT. A source familiar with the matter has informed Reuters that UBS, Morgan Stanley and JP Morgan will lead the deal, which will also involve Bank of America Merrill Lynch, Barclays and HSBC, as well as domestic banks BBVA, CaixaBank and Santander.

As previously reported by TeleGeography’s CommsUpdate, on 18 September 2014 Telefonica agreed to pay Vivendi USD9.83 billion for GVT, comprising USD6 billion in cash, alongside a 7.4% equity stake in Telefonica Brasil (valued at USD2.18 billion) and a 5.7% stake in TI (valued at USD1.09 billion). Earlier this month Anatel noted that the precise stakes being transferred to Vivendi had been modified to 11.3% (Telefonica Brasil) and 8.3% (TI).

Brazil, Global Village Telecom (GVT), Telecom Italia (TIM), Telefonica, Telefonica Brasil (Vivo), Vivendi