Nov. 3 (Bloomberg) -- GVT (Holding) SA, the Brazilian telephone company that received takeover bids from Vivendi SA and Telefonica SA, probably will be acquired at a price less than its current level, BlackRock Inc. said.

GVT shares surged 24 percent last month to a record 50.40 reais on speculation of a bidding war after Spain’s Telefonica topped a 42-reais-a-share acquisition proposal from Paris-based Vivendi. William Landers, BlackRock’s senior portfolio manager for Latin America, sold all of his funds’ holdings in GVT as the stock rose above Telefonica’s offering price of 48 reais.

“A 48 reais to 50 reais per share offer is attractive and close to the shares’ full value,” said Landers, 40, who helps oversee about $6.5 billion from Plainsboro, New Jersey. “I don’t expect Vivendi to raise its offer.”

Shareholders of Curitiba, Brazil-based GVT voted today to waive a so-called poison pill clause that requires a bid to be at least 25 percent more than the stock’s highest price in the past 12 months, paving the way for a takeover. The suspension requires a buyer to offer at least 48 reais a share and pay for the deal in cash. A deal must be concluded by Feb. 28, GVT said in a regulatory filing.

Vivendi Options

Madrid-based Telefonica, Europe’s second-largest phone company, made its $3.7 billion takeover offer to defend its biggest market after Spain. Vivendi, seeking to bolster its presence in developing nations, must under Brazilian law offer a payment at least 5 percent above Telefonica’s price, or 50.40 reais a share.

Vivendi is “pleased” with the waiver of the poison pill and will continue to review its options, according to an e- mailed statement today.

“Everyone considers 48 reais a good price,” Alex Pardellas, an analyst for Banif Corretora in Sao Paulo, said in a phone interview. “Telefonica is the most likely to win.”

A spokeswoman for GVT declined to comment today. The stock jumped 1.2 percent to 51 reais in Sao Paulo trading.

“We would like to see the transaction go through, although I can’t comment what deal I prefer,” said Christopher Palmer, the London-based head of global emerging markets for Gartmore Investment Management, which owns about 1 million shares of GVT, according to data compiled by Bloomberg. “I am just happy with the type of price has been contemplated by the company.”

Share Gains

GVT has almost tripled since its February 2007 initial public offering, compared with a 36 percent gain in the benchmark Bovespa index. Chief Executive Officer Amos Genish, a 49-year-old Israeli and GVT founder, helped build the company into Brazil’s fourth-biggest high-speed Internet provider, with a 15,000-kilometer (9,300-mile) fiber-optic network.

“GVT delivered everything it promised since the IPO,” said Gilberto Pereira de Souza, an analyst with Espirito Santo Research in Sao Paulo, who has a “sell” recommendation for the company and a 44.30 reais price estimate, according to data compiled by Bloomberg.

The company, controlled by Global Village Telecom (Holland) BV and Swarth Group, emerged during Brazil’s privatization of its telephone services at end of the 1990s.

The government auctioned its stake in an international carrier and in three fixed-lines companies, each one operating in a different region. After selling the companies, Brazil auctioned licenses to create the so-called mirror operators to compete with the former state-controlled companies.

GVT paid 100,000 reais for its license in August 1999 to operate in the same 10 states of Brasil Telecom SA while Telefonica bought Telecomunicacoes de Sao Paulo SA to operate in Brazil’s richest state.

‘Not Pleased’

Telefonica plans to maintain GVT’s business model and management if it acquires the company, Antonio Carlos Valente, head of the Brazilian unit, said last month. The parent company was “not pleased” with Vivendi’s bid for GVT, CEO Cesar Alierta told reporters in Seville, Spain on Oct. 30.

GVT shares, up 101 percent this year, would plunge if the company isn’t sold in a 48 reais to 50 reais range, Landers said. The company hired Goldman Sachs Group Inc. and Credit Suisse Group AG as advisers, Genish said Oct. 22 during the third-quarter earnings conference call.

“GVT is in a market niche,” said BlackRock’s Landers, who bought shares in the IPO. “The sale of the company was only a matter of time.”

Markets

The Bovespa index fell 5.4 percent to 61,545.50 last week, the biggest drop in eight months. Votorantim Celulose & Papel SA fell the most in the measure, tumbling 15 percent. Cia. de Concessoes Rodoviarias had the biggest gain, adding 5.1 percent.

The yield on the local-currency zero-coupon bonds due January 2011 rose 3 basis points, or 0.03 percentage point, to 10.32 percent in the week. The real slid 2.5 percent to 1.7612 per U.S. dollar from 1.7173 on Oct. 23.

The following is a list of events in Brazil this week:

Event                                                  Date
GVT’s Shareholders meeting                             Nov 3
FGV CPI IPC-S Inflation Index - Weekly                 Nov 3
Monthly Trade Balance - October                        Nov 3
Industrial Output - November                           Nov 3
Cia. Siderurgica Nacional SA’s earnings                Nov 3
Banco Itau Unibanco Holding SA’s earnings              Nov 3
Fipe Consumer Price Index - October                    Nov 4
Banco Bradesco SA’s earnings                           Nov 4
CNI Capacity Utilization - September                   Nov 5
Gerdau SA’s earnings                                   Nov 5

To contact the reporter on this story: Francisco Marcelino in Sao Paulo at mdeoliveira@bloomberg.net

Last Updated: November 3, 2009 16:37 EST