Why Telecom Italia and Telefonica Are Battling for GVT

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Aug. 25 (Bloomberg) –- Bloomberg’s Rodrigo Orihuela reports on the battle for Vivendi’s GVT as Telecom Italia preps a new offer to try and outbid Telefonica for the Brazilian broadband unit. He speaks to Manus Cranny on “Countdown.” (Source: Bloomberg)

These companies, they really are beginning to push the envelope in terms of what they are prepared to bid for this company.

Is that a fair assessment?

It is.

Telefonica has already put their bid on the table.

They have said they are willing to pay its .7. -- 6.7. telecom has not officially made it.

They have a board meeting.

The report is they will be making a 7 billion euro offer.

They expect telefonica to up that offer afterwards.

They're really pushing it.

Telefonica is actually cash.

This is where it is going to get interesting.

One is cast.

One is stock and holdings.

Where do we go next in this battle?

That's a great void.

Both companies are offering some stocks.

The differences telefonica is offering a big portion in cash.

Telecom has not made the offer.

The reports are it will be mostly stocks.

The next step is a board meeting to officially approve the offer, and then we will be able to know exactly what they want.

Then we have the vivendi board meeting as well where they will discuss the offer from telefonica.

The next word meeting -- board meeting is on the 28th.

28th.

Then we will know where we stand.

Who has got the upper hand?

Will it come down to cash or who has got the better equity deals?

When you look at it from a financial aspect telefonica would appear to be better positioned.

Their financial situation is much stronger.

They are offering cash.

For a unit everyone has the impression the vivendi would be willing to sell because it doesn't have to do with long-term strategy, but telecom italia has got one thing going, and it is the relationship between their ceo and the ceo of vivendi.

Sometimes when it comes to big deals, personal relationships can weigh as much as the actual financial details.

This text has been automatically generated. It may not be 100% accurate.

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