The CEO of Telecom Italia (TI) and chairman of French media group Vivendi will meet this week to discuss the Italian company’s bid to acquire Brazilian broadband business GVT, according to a Reuters report.
A source said TI’s Marco Patuano and Vivendi’s Vincent Bollore will meet in Paris today or Thursday to discuss a possible deal, although any offer will have to wait for a Vivendi board meeting on 28 August to be formalised.
The Italian incumbent was reported to be in talks with Vivendi regarding a bid for GVT last week, bringing it into competition with Telefonica, which made an earlier €6.7 billion offer.
Sources said the proposed TI-Vivendi deal would involve an equity swap to allow Vivendi to acquire a stake in Telecom Italia.
As Telefonica is TI’s biggest investor, its bid also provides Vivendi with the chance to take an 8.3 per cent stake in the Italian incumbent, the majority of its holding.
TI’s bid is being presented as a broader alliance than Telefonica’s and could include the Italian operator distributing content from Vivendi, including pay-TV provider Canal Plus, over its domestic network.
Vincent Bollore, Vivendi’s largest shareholder and chairman since June, is unlikely to reverse the company’s strategic shift away from telecoms and towards media.
But Bollore does want to maintain a foothold in the telecoms industry with minority stakes that would also enable Vivendi to deliver its content over partner networks. This reasoning would make TI’s offer attractive.
Telefonica’s bid is likely to have been partly motivated by a desire to ease its regulatory position in Brazil.
Brazilian anti-trust watchdog Cade said last year that Telefonica must completely exit TIM Brasil (majority owned by TI) or get a new partner for Vivo, its mobile subsidiary, if it wants to maintain control of its own unit in Brazil.