Vivendi's dream of establishing a foothold in Brazil's wireline market through its impending purchase of GVT could be in danger as the Brazil's securities regulator CVM continues to investigate doubts on call options to purchase GVT shares.
Of course, Telefonica's Brazilian subsidiary Telesp which was outbid by Vivendi for GVT, wants answers. The service provider argues that Vivendi's conflicting information may have influenced GVT shareholders to sell their stock 'under the wrong assumptions.'
In October, Telefonica's Telesp subsidiary submitted a competing bid to purchase GVT--$28 for each of GVT's shares--but 51 percent of GVT shareholders had to accept the offer. Telesp wanted to acquire GVT to expand its wireline holdings in Brazil's center-south and Northeast regions.
However, in mid-November, Vivendi upped its bid for GVT to $32.43 per share. By purchasing 37.9 percent of GVT, Vivendi claimed it had options to purchase another 19.6 percent of the service provider. That move gave Vivendi a 57.5 percent stake in GVT and the option to make a tender offer for 100 percent of the company.
- Reuters has this article
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