KKR, Apax Said to Team Up for Vivendi’s GVT Against DirecTV

Private-equity firms including KKR & Co. and Apax Partners LLP are teaming up to bid against DirecTV to acquire Vivendi SA’s GVT phone unit in Brazil, people with knowledge of the matter said.

The group, which would also include Gavea Investimentos Ltda, owned by JPMorgan Chase & Co., and Cambuhy Investimentos Ltda is willing to pay as much as 5 billion euros ($6.8 billion) for the company, compared with Vivendi’s asking price of about 8 billion euros, said one of the people, who asked not to be named because the talks are private. Grupo BTG Pactual is still considering whether to join the bid, the people said.

The private-equity group will obtain a loan of 6 billion reais ($3 billion) from Sao Paulo-based Banco Bradesco SA to finance the acquisition, another person said. A representative for Banco Bradesco declined to comment.

DirecTV, the largest U.S. satellite-television provider, remains interested in buying GVT and may be able to come closer to Vivendi’s asking price because of the efficiencies the deal would create, according to another person familiar with the situation. DirecTV is counting on surging demand for pay-TV and Internet service in Latin America as growth subsides in its home market. The company lost clients for the first time in the U.S. in the second quarter of last year.

“I see it as a nice-to-have, not a must-have,” DirecTV Chief Executive Officer Mike White, 61, said at a Jan. 8 investor conference. “There are synergies, but it’s still a work in process, and I can’t yet tell you whether the synergies are big enough for me to get comfortable that they can more than offset the premium. All that depends on the price.”

Second Round

Potential buyers are preparing for the second round of bids in the auction, which may be concluded by the end of February, said one of the people familiar with the situation.

Representatives for Vivendi, Apax, KKR and BTG Pactual declined to comment. A representative for DirecTV didn’t respond to a message seeking comment. A spokesman for JPMorgan declined to comment on Gavea Investimentos’s plans, while calls made to Cambuhy Investimentos weren’t answered.

GVT, which Vivendi acquired for $4.18 billion in 2009 after trumping a bid from Spain’s Telefonica SA, has helped drive revenue growth at the Paris-based media company and may be worth 5.2 billion euros, according to estimates in April by Morgan Stanley.

Vivendi, which hired Deutsche Bank AG, Rothschild and Credit Suisse Group AG as financial advisers in August, might also consider an initial public offering for GVT, one person with knowledge of the situation said at the time.

Vivendi is also selling its 53 percent stake in Maroc Telecom, which Emirates Telecommunications Corp., the Middle East’s second-biggest phone company by market value, said earlier this month it’s interested in.

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