Vivendi Halts Sale of GVT Division After Unsatisfactory BidsAlex Sherman and Matthew Campbell
Vivendi SA halted the planned sale of its Brazilian phone and Internet unit after failing to get a satisfactory bid for a business it valued at more than $10 billion, slowing the French conglomerate’s transformation plan.
Vivendi wasn’t satisfied with the offers it received for the GVT division, a spokesman said yesterday by phone. The Paris-based company now prefers to develop GVT on its own, he said. It solicited bids for the division last year, and had an asking price of 8 billion euros ($10.4 billion), a person familiar with the matter said in January. Vivendi shares fell.
A failure to divest GVT is a setback for Vivendi’s attempt to focus on media assets and find buyers for telecommunications businesses. Vivendi is seeking to concentrate on the music, television and gaming industries, where its units include record company Universal Music Group, pay-TV business Canal+ and video-game maker Activision Blizzard Inc.
“Vivendi management made it very clear that their intention is to split the company into media and telecoms entities,” Saeed Baradar, an equity sales specialist at Societe Generale in London, said today in a note. “That remains unchanged in our view. The asset remains for sale but at the right price.”
DirecTV, the largest U.S. satellite-TV provider, and a group of private-equity firms including KKR & Co. and Apax Partners LLP had made preliminary offers to acquire the Brazilian business, people with knowledge of the matter said.
Shares of Vivendi dropped 3.3 percent to 16.10 euros in Paris today. DirecTV advanced 4.5 percent to $54.99 in New York, the biggest one-day gain since November 2011.
Vivendi has also sought a buyer for its 53 percent stake in Moroccan phone carrier Maroc Telecom SA, a holding the market values at about $6 billion. Qatar Telecom QSC said last month it is studying Maroc Telecom’s financials as it considers buying the stake.
Vivendi has set no deadline for asset sales. Chief Financial Officer Philippe Capron said last month that the company won’t do “fire sales,” and is in no rush even if some assets take longer to sell.
GVT, which Vivendi acquired for $4.18 billion in 2009 after trumping a bid from Spain’s Telefonica SA, has helped boost revenue growth at the French company.
DirecTV Chief Executive Officer Michael White said in January at an investor conference that GVT was a “nice-to-have, not a must-have.” GVT would have added a phone and Internet component to DirecTV’s Latin American pay-TV service to provide a bundled service for Brazilian customers.
“I’ve got to become convinced that there are sufficient, tangible, real synergies, not foo-foo revenue synergies, to more than offset the premium one would have to pay,” White said at the conference. “That’s a pretty high bar.”