Vivendi outbids Telefónica to grab Brazil's GVT

Natalie Apostolou
17 Nov 2009

Europe’s biggest entertainment group Vivendi, has snatched control of Brazilian carrier GVT away from rival bidder Telefónica.

Vivendi CEO Jean-Bernard Levy described the transaction as “the revenge of the underdog.” Vivendi outbid Telefónica with its $4.18 billion offer - trumping Telefónica’s $4 billion bid.

But the hefty bid - which is a 33% premium over the company's original offer made in September – has drawn the ire of investors, who have pulled Vivendi's share price down 2.6% since the announcement was made.

Analysts have also expressed concern over the price, believing the offer has damaged the company's reputation for disciplined spending during acquisitions.

Vivendi acquired the 39.7% stake, late last week and has unconditional options to buy a further 19.6%. Vivendi said it was launching a mandatory tender offer for 100% of the carrier’s capital at 56 Brazilian reais per share, valuing the company at 7.2 billion reais ($4.2 billion).

“Our offer to acquire the control of GVT reflects the exceptional quality of this operator and its teams, as we have been able to confirm after a thorough analysis of its business model and performance record,” Lévy said in a statement.

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