Telecom Italia CEO to meet Vivendi’s Bollore on GVT bid

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Telecom Italia CEO to meet Vivendi's Bollore on GVT bidROME (Reuters) – The head of Telecom Italia is set meet Vivendi chairman Vincent Bollore on Wednesday or discuss an offer for the French group’s Brazilian unit GVT, sources with knowledge of the matter said.

“Bollore and (Telecom Italia CEO Marco) Patuano will meet in Paris today or tomorrow discuss the Telecom Italia offer for GVT though an offer won’t be formalised before the Vivendi board meeting on August 28,” one of the sources said.

A second source said the meeting takes place on Wednesday.

Telecom Italia and Vivendi declined comment.

French millionaire Bollore, a long-standing investor in Italy, is a leading shareholder of Mediobanca, the influential investment bank that has for long been at the heart of Italy’s high finance. Mediobanca used to control Telecom Italia along with Telefonica and other financial players.

Sources told Reuters last week that Telecom Italia was in with Vivendi to buy GVT and beat a 6.7 billion euro ($8.9 billion) bid from Spanish rival Telefonica, which is also Telecom Italia’s biggest investor.

The sources said the plan, which could be finalised the next three weeks, would involve an equity swap to allow Vivendi to acquire a stake in Telecom Italia.

Patuano has ruled out a possible merger between the Italian group’s local wireless unit TIM Brasil and GVT but said he will make any “crazy” acquisitions in Brazil.[eap_ad_2]

The Latin American country is a crucial market for both Telecom Italia and Telefonica and still has growth , in contrast to relatively saturated European markets.

A tie-up between TIM Brasil and GVT would create a stronger competitor to Telefonica’s local unit Vivo. If Telefonica’s bid succeeds, TIM Brasil’s position would be weakened because it would remain the only mobile operator in Brazil without a large business.

Italian newspaper Il Messaggero said on Wednesday that Patuano would meet Bollore shortly to discuss “an equity and industrial alliance” between TIM Brasil and GVT.

Telefonica last week made an unexpected 6.7 billion euros bid for GVT in a that would allow Vivendi to acquire an 8.3 percent stake in Telecom Italia.

Heavily indebted Telecom Italia, which is carrying out a series of asset disposals to fund investments, may have to launch a capital increase to buy GVT, analysts said.

“Given Telefonica’s 6.7 billion euro offer for GVT, we believe TI will likely a sizeable capital increase to fund a competing offer,” Citigroup said in a note.[eap_ad_3]