Telecom Italia to make GVT offer

Telecom Italia is on the point of making a €7 billion offer for Vivendi’s Brazilian unit GVT in a deal that would see the French media company take a stake of between 15-20% in the Italian telecom operator, according to a Reuters report.

Reuters, citing four unnamed sources, reported that Telecom Italia is proposing a merger between GVT and its own Brazilian subsidiary TIM Brasil, with Vivendi set to gain a 15-20% stake in Telecom Italia and a stake of about 12% in the new combined Brazilian operation.

According to the sources cited by Reuters, the cash element in Telecom Italia’s offer is likely to be inferior to that offered by Spain’s Telefónica, which has already tabled a €6.7 billion bid for GVT, currently being studied by Vivendi. However, Telecom Italia’s bid could be more attractive from a strategic viewpoint, as Vivendi chairman Vincent Bolloré is keen to develop the company’s presence in Italy and is looking to secure outlets for Vivendi-owned Canal+ and Universal Music content.

Italian press reports have meanwhile suggested that Telefónica could be willing to up its own bid to €8 billion and open up the prospect of a wider business alliance.