The France-based telecom Vivendi (Euronext: VIV) is mulling the sale of its previously untouchable Brazilian unit GVT, Reuters reported.
The proposed sale could be worth about $10.42 billion for the French group which reportedly shopped its Activision Blizzard (Nasdaq: ATVI) gaming unit but got no takers.
"A sale of GVT is no longer taboo and is now being considered internally," a source was quoted by Reuters as saying.
The story Thursday continued that no bankers have been hired to sound out buyers, and the company's thinking "has evolved recently from seeing the Brazilian broadband provider as a must-keep asset to one that it would consider selling at the right price."
Vivendi is Europe's biggest telecom and entertainment group. A recent, somewhat prolonged slump in its share price has led some investment banks to suggest selling units or breaking up the business.
One such move was the Activision sale which, according to reports, was a dud. Vivendi wanted about 25 percent more than Activision's $8.3 billion market value--paid in cash--but was rebuffed by the likes of China's Tencent (SEHK: 700), Time Warner (NYSE: TWX) , Microsoft (Nasdaq: MSFT), Apple (Nasdaq: AAPL) and Facebook (Nasdaq: FB).
Vivendi, a source told Reuters, "will now think about it options on Activision and make a decision in the coming months."
And that brings the company to GVT "as a candidate for disposal, as it seeks to reduce telecoms holdings" that are seen as "too risky and too capital-intensive," the story said.
A GVT sale would be profitable. Vivendi bought the telco in 2009 for $2.9 billion. Since then the company has expanded into 120 Brazilian cities as an alternative provider of fixed telephone, broadband and TV services. GVT has maintained that push by "investing heavily to build its high-speed fiber broadband network to take advantage of historically weak Internet services in Brazil's booming economy," the Reuters story said, noting that Vivendi has subsidized the investment "because (GVT) doesn't generate enough cash to finance the expansion."
There might be more market for GVT than there was for Activision. The story suggested that fixed and mobile players Telefonica and Oi and Telecom Italia's TIM Brasil unit might be interested and that, if regulatory hurdles can be overcome, America Movil (NYSE: AMX) could be in the mix.
"Given the potential in broadband, there is a lot of long-term value for these guys," a telecom sector banker told Reuters.
A GVT spokeswoman declined comment, of course, noting, "Vivendi never comments on unfounded rumors on its different businesses and is not going to start now."
-see the Reuters story
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