UPDATE 5-Telefonica bids 6.7 bln euros for Vivendi's Brazil broadband unit
* Vivendi board to consider bid
* Other groups could launch competing offers
* Telefonica offers Telecom Italia stake to Vivendi
* Brazil minister dismisses antitrust concerns (Adds antitrust comment from Brazilian minister, share movements)
By Leila Abboud and Sarah Morris
PARIS/MADRID, Aug 5 (Reuters) - Spain's Telefonica made a 6.7 billion euro ($8.99 billion) bid on Tuesday to France's Vivendi for its Brazilian broadband unit GVT, seeking to strengthen Telefonica's position in a market that accounts for one-fifth of revenue.
The surprise move comes after Vivendi, led by its chairman and largest shareholder Vincent Bollore, said in late June it wanted to keep its last remaining telecom asset even as it repositions itself as a media company.
The French company said that none of its units were for sale but it would consider Telefonica's offer at a board meeting in late August. Analysts have speculated that Bollore would be open to shedding GVT at the right price, and say Telefonica's bid is likely to attract additional suitors for Brazil's fourth-biggest broadband provider.
Telefonica, which owns Brazil's leading mobile operator Vivo, said it was offering 11.96 billion reais ($5.30 billion) in cash plus new shares of Telefonica Brasil SA worth 12 percent of the larger group.
Telefonica also offered Vivendi the chance to acquire its 8.3 percent stake in Telecom Italia. Such a move would ease antitrust pressure on Telefonica in Brazil, where regulators have ordered it to find a new partner for its wireless unit or exit an indirect stake in Telecom Italia's Brazilian mobile operator, TIM Participações SA.
In the first sign of an official blessing for the deal, Brazil's communications minister Paulo Bernardo said a Telefonica-GVT merger would face no major antitrust concerns.
Telefonica has coveted GVT since it lost an initial bidding war to Vivendi to buy the company in 2009.
GVT was founded in 2000 by former Israeli army officer Amos Genish, still CEO, and within a decade it became Brazil's fastest-growing telecom. By focusing on high-speed broadband for the most demanding clients, the upstart operator got ahead of its larger competitors.
As Brazilian mobile growth has fizzled and more households have disconnected landlines in recent years, the four major operators are now chasing higher-value clients with pay-TV and broadband services that GVT pioneered in the country.
Brazil is a crucial market for Telefonica since it is the group's second-largest cash generator and has growth potential unlike more saturated markets such as Germany and Britain.
A purchase of GVT would help the Spanish operator bulk up in broadband where it is in third place in Brazil with an 18.4 percent share behind Mexico's America Movil and Grupo Oi. GVT is fourth with 12.7 percent share.
Telefonica shares slipped 1.7 percent to 11.79 euros while Vivendi's rose 3.6 percent to 19.59 euros.
If successful, the move could also make mobile consolidation in Brazil less likely. As a result, Telecom Italia shares fell 5 percent, while TIM Brasil lost 8 percent and Oi shed 6 percent.
Telefonica had been pushing for a breakup of TIM earlier this year to solve its regulatory problems, but Oi, its ally in such a effort, has since been weakened by a bad investment made by partner Portugal Telecom.
Telefonica's move could also prompt interest from other buyers. When Vivendi tried to sell GVT in 2012, it attracted a bid from a private equity consortium led by KKR and U.S. satellite television provider DirecTV, which is in the process now of being bought by U.S. telcom AT&T.
Vivendi decided not to sell at that time because the bids were too low.
A source familiar with the French company's thinking said on Tuesday that the Telefonica offer was a "good price for a first bid" but that it remained unclear what Bollore wanted to do.
The person added that Telecom Italia could also jump into the fray but that it was probably too early for DirecTV since the AT&T deal was still under regulatory review.
"I think it will come down to a war between the Spanish and the Italians," the source said.
Bollore, who just took the reins of Vivendi, has said his aim is to build a coherent media company through acquisitions and by making its pay-TV, music, and Brazilian telecom unit work more closely together.
Vivendi may come to the negotiating table if additional bidders emerge, wrote Liberum analysts in a note.
"We think Vivendi will sell - GVT does not fit in with its stated strategy of being a media and content player."
($1 = 0.7451 Euros)
($1 = 2.26 Brazilian reais) (Additional reporting by Brad Haynes, Guillermo Parra-Bernal and Alberto Alerigi Jr. in Sao Paulo, James Regan in Paris and Tomas Cobos in Madrid; Editing by Sophie Walker and Lisa Shumaker)