Vivendi delays GVT sale after getting lowball offers

Vivendi delayed its plan to sell its Brazilian subsidiary Global Village Telecom (GVT) after receiving what it said was lower than expected offers.

Citing people close to the matter, the Wall Street Journal reported the service provider wanted €7 billion (USD 9.1 billion) in cash for GVT.

"We decided we're not going to sell it for silly prices …," Vivendi spokesman Simon Gillham told the Wall Street Journal. "We're absolutely convinced we have a great asset. We're very happy to continue developing it within the Vivendi family."

Vivendi's decision to put its GVT sale on hold comes after DirecTV (Nasdaq: DTV), said it "decided not to move forward in its pursuit of GVT and has withdrawn from the process."

In addition to DirecTV, Liberty Global (Nasdaq: LBTYA) and America Movil (NYSE: AMX) as well as a consortium of private equity companies, had expressed interest in buying GVT.

For Vivendi, the lack of a sale is a setback. The French conglomerate wants to offload the Latin American unit in addition to Moroccan subsidiary Maroc Telecom in an effort to cut debt and refocus its efforts on its core media business.

DirecTV was looking at GVT as a way to bolster its Latin American operations to battle rivals such as America Movil, which surpassed DirecTV in the video subscriber race. A TeleGeography report said that America Movil had 11.3 million, or 22 percent, of Latin America's 51 million Pay-TV subscribers in the first half of 2012, while DirecTV had 9.1 million, or 18 percent, of the market. 

GVT could be an attractive asset for the right player that wants to either deepen their presence or get an initial foothold in Latin America's communications market.

Pay-TV, in particular, has been a particular growth area for GVT. After only one year in operation, its Pay-TV service generated revenues of €83 million (USD 107 million) and had 406,000 subscribers. 

For more:
- Wall Street Journal has this article (sub. req.)

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