REFILE-UPDATE 2-Vivendi investors fret about GVT price

(Refiles to correct the day to Monday in first paragraph)

* Vivendi unexpectedly gains control of Brazil's GVT

* Vivendi shares down 2.7 pct

* Analysts worry over fiscal discipline, high M&A multiples

* GVT deal seen increasing likelihood of NBCU stake sale

By Dominique Vidalon and Nicola Leske

PARIS, Nov 16 (Reuters) - Vivendi's (VIV.PA) shares fell on Monday as investors fretted that its dramatic, high-priced purchase of Brazilian telecom group GVT GVTT3.SA from under Telefonica's (TEF.MC) nose signalled more dealmaking.

Vivendi Chief Executive Jean-Bernard Levy -- mindful of a huge acquisition spree under former CEO Jean-Marie Messier that left Vivendi with a staggering pile of debt -- has cultivated a reputation for shunning overpriced deals.

But in a surprise move, Vivendi on Friday said it gained control of GVT for up to 4.12 billion reais, beating Telefonica to gain a foothold in Latin America's biggest market, where it does not yet have a presence. [ID:nN13479709]

Vivendi's bid values GVT at 7.2 billion reais, or about $4.8 billion against Telefonica's offer of $4 bln.

SG credit analyst Juliano Torii said that Vivendi may have been under too much pressure to succeed after walking away from some options in the past and may have rushed into the deal, agreeing to a higher than expected price.

"I am concerned that they put the bid together in a bit of a hurry," Torii said.

The move defied the predictions of many analysts who had expected Vivendi to throw in the towel on GVT to stick to a policy of protecting its investment-grade debt ratings and paying high dividends.

"We had given high marks to management for its discipline in the past year, avoiding overpaying for assets in Spain and Africa. It would look like even this discipline has been set aside," said Bernstein Research in a note.

Vivendi shares lost 2.7 percent by 1452 GMT, underperforming the higher DJ STOXX telecom and media indexes .SXKP .SXMP, and were the worst losers among French bluechip stocks.

Telefonica shares gained 0.6 percent as most analysts agreed it was a minor issue for the Spanish telecoms group. Citigroup warned however that there was a 25 percent chance that Vivendi and Telefonica would continue the bidding war.

Portuguese broker BPI said there was still room for consolidation in the sector in Brazil, namely in the mobile business, and Telefonica will most likely play a central role.

GVT shares rose 3 percent in Brazil.

To read a column on Vivendi, double click on [ID:nLG355596]

MORE EXPENSIVE M&A TO COME?

Vivendi is keen to expand in emerging markets given its mature portfolio, which includes Maroc Telecom (IAM.CS) and France's second-biggest mobile phone operator SFR -- potentially burdened by a worsening regulatory environment and a fourth mobile operator emerging in France.

But the French water utility-turned-global media conglomerate, which owns music company UMG, pulled out of talks with Kuwaiti mobile operator Zain (ZAIN.KW) this year over price issues and last year dropped its pursuit of Saudi Arabian phone operator Oger Telecom.

Deutsche Bank said in the grander scheme of things GVT was a relatively small deal for Vivendi but it could be an indication of what was ahead.

"In sentiment terms, however, raising the bid for GVT by 33 percent is a clear statement of intent by management's willingness to pay high multiples to acquire higher growth assets."

Citigroup said the deal had damaged its positive view on Vivendi. "This is the first non-core asset the group has been willing to be so aggressive over and although Brazilian fixed line is underpnetrated and should see strong growth, the returns at this valuation could be poor."

CM-CIC Securities cut its rating to "hold" from "add", saying the pricetag on GVT was too high, implying an EV/EBITDA ratio of 9.1 times for 2010 and 7.7 times for 2011 compared to usual valuations of 6-7 times for emerging country operators.

NBC DEAL MORE LIKELY?

Faced with a more costly acquisition pricetag, Vivendi was however more likely to now sell its holding in U.S media group NBCU to help fund the deal, some analysts said.

"We believe Vivendi would have to sell its 20 percent stake in NBCU in order to ease balance sheet pressure," UBS said.

General Electric (GE.N), which owns 80 percent of NBCU, and Comcast Corp (CMCSA.O) have agreed on the structure of the board for the proposed joint venture with NBC Universal, a person familiar with the matter said on Friday. [ID:nN13483356]

Any deal between GE and Comcast would depend on Vivendi selling its NBCU stake.

Each year between mid-November and mid-December, Vivendi has to decide whether to exercise its put option to sell the stake.

This year, Vivendi is eager to dispose of the stake and is determined to get good value for it, sources have said.

(Additional reporting by Robert Hetz in Madrid, Editing by Sitaraman Shankar)