Vivendi in "no hurry" to seal GVT deal: source

SAO PAULO (Reuters) - French media giant Vivendi (VIV.PA) is gauging its options for the potential purchase of Brazilian telecom firm GVT GVTT3.SA and is in no hurry to lock down the deal, a person with direct knowledge of the situation told Reuters on Tuesday.

This month, Spain's Telefonica (TEF.MC) launched an unsolicited $3.7 billion takeover bid for GVT, outmatching Vivendi's earlier $3 billion offer. Vivendi sees GVT as a perfect fit to capture high-usage and high-margin customers in Brazil, Latin America's largest telecommunications market.

The Paris-based company already completed due diligence for the transaction and won approval from its board to proceed with the takeover.

At this point, a counterbid remains an option, said the person, who spoke under the condition of anonymity.

Vivendi has a long-standing policy of not engaging in bidding wars for takeover targets. If Vivendi was to trump Telefonica's offer for GVT it would have to offer a minimum 50.4 reais a share, 20 percent more than its original tender bid of 42 reais a share.

The person did not elaborate on the probable options. The Vivendi bid has no timeline and depends upon winning at least 51 percent of GVT.

It also hinges on the waiver of a poison-pill clause, which bars a change in control of GVT unless a bidder offers a 25 percent premium to its highest price over the past year. A vote on removing the poison pill will take place on November 3.

The person said a Vivendi takeover of GVT would not face stringent regulatory scrutiny. Telecommunications Minister Helio Costa told Reuters on Tuesday the deal would not likely face antitrust issues and welcomed bids for GVT.

CASH

Vivendi's foray into Brazil follows Chief Executive Jean-Bernard Levy's drive to expand into fast-growing emerging markets as business in the developed world sags because of the global recession. Vivendi controls mobile phone carriers in France and Morocco and the world's largest record company.

Vivendi's management has been vocal about buying assets that will not endanger the company's investment-grade debt ratings or its policy of paying high dividends.

In an interview with Reuters on September 9, GVT Chief Executive Officer Amos Genish said both management and controlling shareholders favor Vivendi as a partner for GVT because it would fund the company's advance in highly profitable segments such as Internet TV and expansion into Sao Paulo and Rio de Janeiro, Brazil's largest cities.

But shareholders might settle for more cash, shunning the apparent benefits of a Vivendi-GVT association in the long run, analysts at Raymond James and SLW Corretora have said.

GVT was down 0.6 percent to 49.51 reais in afternoon trading on Tuesday, paring gains this year to 95 percent.

The shares have jumped 36 percent since September 8, a day before the Vivendi bid was unveiled.

Maria Teresa Azevedo of Sao Paulo-based brokerage Link Corretora said Vivendi and Telefonica are interested in GVT because of its telecom network with a backbone of more than 15,000 kilometers (10,000 miles), and revenue growth that is six times the local industry's average, among other reasons.

For Telefonica, buying GVT would allow it to expand beyond its home market of Sao Paulo, Brazil's most populous state. GVT is the No. 4 provider of high-speed Internet in Brazil, with about 5 percent of the market.

Telefonica is already a major operator in Brazil through its Telesp fixed-line unit, which controls 28 percent of the market -- 11 times GVT's participation.

A spokeswoman for GVT in Curitiba declined comment.

(Reporting by Guillermo Parra-Bernal, editing by Leslie Gevirtz)