Telecom Italia woos France's Vivendi in bid to create new media alliance
Published 08/08/2014 | 02:30
Telecom Italia is pursuing an alliance with Vivendi that could lead to the French media company acquiring a significant stake in Italy's largest phone carrier.
Talks have taken place between Telecom Italia chief Marco Patuano and Vivendi chairman Vincent Bollore, sources said. The talks were already under way before Telefonica - which competes with Telecom Italia in the Brazilian wireless market - offered to buy Vivendi's GVT unit for €6.7bn earlier this week.
A tie-up between the companies could derail Telefonica's bid for GVT, a Brazilian Internet provider, with the Spanish offer coming months after Telecom Italia's Mr Patuano had expressed interest in the unit. The Milan-based company has proposed several scenarios and no decisions have been taken, sources said.
One option proposed by Telecom Italia would see Vivendi receive shares in the Italian carrier in exchange for GVT, the sources said. Telecom Italia could also offer some cash, and might seek a capital increase to help raise funds.
The groups are already intertwined. As part of Telefonica's existing bid for GVT, Vivendi would be given the right to buy a stake of about 8pc in Telecom Italia from the Spanish company. Representatives for Vivendi and Telecom Italia declined to comment.
While Telefonica's bid is centered on GVT, the broader alliance that Telecom Italia has proposed could include the Italian company distributing content from Paris-based Vivendi's media assets, which include pay-TV provider Canal Plus. Telecom Italia has sought closer ties with broadcasters to expand in content distribution as call prices slump.
The company had its debt rating cut to junk by Standard & Poor's and Moody's last year and needs funds for investments to reverse falling sales. Its net debt amounted to about $27.4bn at the end of last year.
Irish IndependentFollow @Indobusiness