* GVT sale comes as Vivendi plans to exit telecom
* Price tag no less than 7 bln euros, source says
* Oi, America Movil, DirecTV among early bidders
* Vivendi eyes Brazil for media, content projects
By Guillermo Parra-Bernal and Leila Abboud
SAO PAULO/PARIS, Nov 7 France's Vivendi SA
seeks to raise at least 7 billion euros ($8.9 billion)
from the sale of Brazilian unit GVT and has attracted
expressions of interest from at least four bidders, said two
sources with direct knowledge of the situation.
Both sources, who requested anonymity because of the
sensitivity of the issue, said Brazil's Grupo Oi SA,
Mexico's America Movil SAB, DirecTV and
Telecom Italia SpA were taking part in initial talks
involving GVT. Several investment funds have also shown interest
in GVT, one of the sources added, without elaborating.
Vivendi, which is selling assets to cut debt and boost its
flagging share price, aims to receive binding offers for GVT in
the first quarter, both sources said. The GVT sale is a sign
that Paris-based Vivendi is looking to scale back its presence
in telecommunications to focus more on its media assets, the
Vivendi decided to put GVT on the block this summer as it
undertakes a review of its portfolio of businesses in mobile
telephony, video games and music. Europe's largest media and
telecommunications conglomerate is also seeking a buyer for its
controlling stake in Maroc Telecom.
"Synergies between GVT and other Vivendi units were not as
strong as the company first imagined," one of the sources told
Reuters. "But that doesn't mean that Vivendi will go on a New
Year's sale mode and sell off GVT at any price. There is no way
that will happen."
Vivendi shares are up 28 percent since early April on hopes
that management could remake the company, keep robust dividend
payouts and protect the company's investment-grade rating.
The stock had shed 68 percent between January 2011 and March
this year, as investors questioned Vivendi's telecom-and-media
structure as well as its ability to sustain growth and profits
given tough competition for its French telecom unit, SFR.
A spokesman for Vivendi declined to comment.
Calls to the media offices of Rio de Janeiro-based Oi and
Mexico City-based America Movil were not immediately answered.
DirecTV Chief Executive Officer Mike White told investors late
on Tuesday that the U.S.-based satellite TV provider was in the
early stages of evaluating a takeover proposal for GVT.
A Telecom Italia spokesman did not have an immediate
AMBITIOUS PRICE TAG
GVT, an alternative provider of fixed telephone, broadband,
and TV services in 120 Brazilian cities, has been a major driver
of Vivendi's growth in recent years.
The 7 billion euro price tag for GVT could prove ambitious
as the bidding process moves ahead. At that price, GVT would be
valued at 8 times 2013 estimated earnings, well above the
average 5.5 times valuation for Oi, America Movil and other
Latin American peers, according to Thomson Reuters calculations.
Bankers not involved in the deal told Reuters that high debt
levels at Telecom Italia and Oi might prevent them from bidding
for GVT. Antitrust concerns might also pose an obstacle to a bid
by Oi, both sources noted.
America Movil, the telecom giant controlled by the world's
richest man, Carlos Slim, may balk at paying the high valuation
Vivendi is seeking, the sources added. Slim's expansion strategy
in Latin America and Europe has been to target companies that he
sees as undervalued.
One of the sources said a sale of GVT did not imply that
Vivendi would exit Brazil. "Brazil is a strong market for
content and media," the source added. "Vivendi is No. 1 in music
thanks to Universal Music Group ... there is strong demand for
videogames" in the country.
The source declined to say whether Vivendi is already eyeing
potential targets in those sectors in Latin America's largest
economy. Brazil would also be a strong entry platform for other
countries in the region, the source noted.
Vivendi paid about 3 billion euros for GVT in late 2009,
outbidding Spain's Telefonica SA. The unit, bankrolled
with 2 billion euros from Vivendi, has spent heavily to build
its high-speed fiber broadband network.
Telefonica, which analysts and bankers had seen as another
possible bidder for GVT to build on its footprint as the owner
of top Brazilian mobile operator Vivo, is not participating in
the process, both sources said.
The investment banking units of Deutsche Bank AG
and Rothschild & Co. are advising Vivendi on the sale