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8 October 2009 By Aliza Rosenbaum

The French media group s E2bn bid for the telecom upstart GVT has now been challenged by Telefónica s Brazilian arm, Telesp. It s easy to see why Vivendi wants in on the hot market, but Telesp s ability to reap synergies gives it an edge in sealing the deal.

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Telesp, the Brazilian subsidiary of Spain's Telefónica, bid R$48 a share ($27.5) for GVT on October 7, challenging a R$42 a share proposed bid from Vivendi made in early September.

GVT's antitakeover provision, which would need to be waived to complete either deal, requires a premium of 25% above the highest price over the last 12 months. That amount would have been R$47.2 for Vivendi's proposed bid (25% premium to 52 week high reached on August 13).

As a part of the Vivendi offer, GVT's controlling shareholders agreed to tender a minimum of 20% of GVT's outstanding shares out of the 30% they currently own.

GVT shares rose nealry 14% on October 7 and closed at R$46.50 on October 8.

GVT has not hired any bankers. BNP Paribas is advising Vivendi and JPMorgan and Santander are working with Telesp.

Context News

Telesp, the Brazilian subsidiary of Spain's Telefónica, bid R$48 a share ($27.5) for GVT on October 7, challenging a R$42 a share proposed bid from Vivendi made in early September.

As a part of the Vivendi offer, GVT's controlling shareholders agreed to tender a minimum of 20% of GVT's outstanding shares out of the 30% they currently own.

GVT shares rose nealry 14% on October 7 and closed at R$46.50 on October 8.

GVT has not hired any bankers. BNP Paribas is advising Vivendi and JPMorgan and Santander are working with Telesp.

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