MADRID (dpa-AFX) - Telecom Italia (TI, TIAOF.PK) is pursuing an alliance with French conglomerate Vivendi SA (VIV.L, VIVEF.PK) that could lead to the French media company acquiring a significant stake in the Italian phone carrier, according to media reports, citing people familiar with the matter.
The reports indicated that talks have taken place between Telecom Italia Chief Executive Officer Marco Patuano and Vivendi Chairman Vincent Bollore. But, the talks were already under way before Spanish telecom operator Telefonica SA (TDE.L, TEF) offered to buy Vivendi's GVT unit for 6.70 billion euros or $9 billion earlier this week.
According to the reports, an alliance between Telecom Italia and Vivendi could disrupt Telefonica's bid for GVT, a Brazilian Internet provider, with the Spanish offer coming months after Telecom Italia's Patuano had expressed interest in the unit. Telefonica put forward the bid after people at the company found out about the negotiations between Telecom Italia and Vivendi.
Telecom Italia reportedly has proposed several scenarios to Vivendi and no decisions have been taken. One option that has been proposed would see Vivendi receive shares in the Italian carrier in exchange for GVT. Telecom Italia could also offer some cash, and might seek a capital increase to help raise funds.
Earlier this week, Telefonica SA and Telefónica Brasil submitted an offer to Vivendi SA to combine Telefónica Brasil with Vivendi's unit Global Village Telecom or GVT in a deal valued at 6.700 billion euros. This offer would be payable partly in cash for approximately 60% of the amount and partly in Vivo shares for 40% of the amount. If this offer was accepted, Vivendi would also have the opportunity to acquire 8.1% of Telecom Italia.
Vivo, the commercial brand of Telefónica in Brazil, is a leading operator in the mobile wireless market and leading broadband services provider in Sao Paulo.
Vivendi then said that its supervisory Board would consider the Telefonica offer at its next meeting, in the best interests of its shareholders and the GVT employees, and will decide what action to take as a result.
Copyright RTT News/dpa-AFX