Telesp Bulldozes Vivendi GVT Bid

Brazil’s Telesp has upped its bid for GVT to BRL50.50 a share, valuing the company at BRL6.49m. The move, made just one day after GVT’s board approved both Telesp and Vivendi as authorized bidders and set a BRL48.00 floor for takeover offers, largely quashes Vivendi’s chances at putting in a new bid for GVT at or above BRL50.40, the minimum level follow-up bid, according to Brazilian law. Any new bid for GVT would have to be a minimum of BRL53.03 per share, 20% higher than Vivendi’s first offer for GVT in September, of BRL42.00. “This increase in [the offer] price seeks to guarantee the success of our [voluntary tender offer for GVT’s shares], while also demonstrating Telesp’s intention to acquire 100% of GVT,” says Telesp in a statement filed with the CVM. The preemptive move by Telesp, which is seen by analysts as offering far better synergies in a combination with GVT than Vivendi, is based on Q3 earnings numbers that confirm Telesp’s interest in the company, even at a higher valuation than its previous bid, says Telesp. “This deal goes way beyond most of the Street’s target prices,” says Valder Nogueira, analyst at Itau, in a report that examines the possibility that Vivendi could find a legal loophole that would allow it to come back with a deal closer to BRL50.40. He concludes that this is unlikely.