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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (54798)	10/7/2009 5:37:42 PM
From: elmatador	Respond to of 218194

Telefonica trumples Vivendi: Offers $3.7 billion all-cash bid for small Brazilian telecom operator GVT Holding SA (GVTT3.BR), trumping an earlier offer from France's Vivendi SA (VIV.FR). Telefonica Places $3.7 Bln Bid For Brazil Telco GVT SAO PAULO (Dow Jones)--Spanish telecom giant Telefonica SA (TEF, TEF.MC) Wednesday made a $3.7 billion all-cash bid for small Brazilian telecom operator GVT Holding SA (GVTT3.BR), trumping an earlier offer from France's Vivendi SA (VIV.FR). Telefonica's Brazilian unit, Telecomunicacoes de Sao Paulo (TLPP4.BR, TSP), or Telesp, will offer 48 Brazilian reals ($27.20) a share for GVT, the alternative operator that it sees as the perfect conduit for its expansion in the Brazilian market. "GVT's assets are complementary to ours ... The deal would create a strong national player in one of the world's most attractive markets," said Gilmar Camurra, Telesp's chief financial officer, during a call with investors. Telefonica has offered to pay a hefty premium for the asset, topping Vivendi's offer of BRL42 a share and beating the 30-day average on the stock by 16%, a move aimed at blocking the entrance of a major new player. "The price Telefonica is offering seems too high, but if Vivendi gained a foothold in Brazil, this would be a blow and is best avoided," said Norbolsa analyst Adrian Serrano. Brazil is alluring to telecom operators due to its rapidly expanding economy, large population and relatively low mobile and broadband penetration rates compared with mature markets in Europe or the U.S. While GVT is relatively small, with around 2.3 million clients across Brazil's center-west, southern and northern regions, its focus on high-usage and high-margin customers makes it an ideal target to bigger rivals eager to expand their geographic reach in the country. The most eager has always been Telesp, which operates fixed-line and broadband services in Brazil's industrial heartland state of Sao Paulo. "In an increasingly consolidated market, GVT is one of the best options to expand fixed-line and broadband out of Sao Paulo. [Telefonica] didn't have many other options," said Luciana Leocadio, a telecom analyst at the Ativa brokerage in Rio de Janeiro. Hence the handsome bid, which analysts believe Vivendi or others are unlikely to match. "No other company would get the synergies from GVT that Telesp does. It is difficult to see Vivendi or others justifying a new bid," said Alex Pardellas, a telecom analyst at Banif Invest in Sao Paulo. A Vivendi spokeswoman said the company wasn't immediately able to comment on Telefonica's offer for GVT. Vivendi had looked to Brazil as part of its strategy to invest in fast-growing emerging markets. A GVT spokeswoman also had no immediate comment on the offer. Telefonica's offer will be in place for 45 days and contingent on the company acquiring 51% of GVT's shares, regulatory approval and shareholders lifting restrictions on the change of control, including a poison-pill clause. GVT's poison-pill clause bars a change in control of the company unless a bidder offers at least a 25% premium to the stock's highest price over the past year. Telesp's Camurra said the deal likely won't face regulatory hurdles since a precedent was set after telecom watchdog Anatel allowed the merger of fixed-line heavyweights Brasil Telecom and Tele Norte Leste Participacoes (TNE), or Oi, last year. GVT shares soared on the news of the offer, rising 14.5% to BRL46.81 in mid-afternoon trade. Telesp shares were 1.4% lower at BRL43.77 Telefonica also operates Brazilian mobile operator Vivo with Portugal Telecom SGPS SA (PT). It has relied increasingly on the strong revenue growth in its Latin American markets as the economic downturn hits its mature markets in Europe, especially in Spain. -By Alastair Stewart and Jason Sinclair, Dow Jones Newswires; 5511-2847-4520; alastair.stewart@dowjones.com (Ana Garcia in Madrid and Ruth Bender in Paris contributed to this article)