* Vivendi fails to get high enough bids for Brazil unit GVT
* Bids for Maroc Telecom unit due by end of April - sources
* Chairman Fourtou under pressure for disposal progress
before April 30 AGM
* Vivendi shares fall 3.4 pct
By Leila Abboud and Liana B. Baker
PARIS/NEW YORK, March 15 Vivendi has
put the sale of its Brazilian telecoms operator on hold after
failing to attract the 7 billion euros ($9 billion) it wanted
from bidders, another setback for the French media and telecoms
conglomerate's efforts to rationalise and reduce debt.
DirecTV, the largest U.S. satellite TV provider,
pulled out of the bidding for GVT on Thursday, leaving a
consortium of private equity groups led by KKR as the
only remaining bidder, with an even lower offer.
"GVT is a good asset and we'll continue to develop it," a
spokesman for Vivendi said on Friday. "The offers we received so
far are not satisfactory. We said all along that we would not
sell assets at knock-down prices."
Shares in Vivendi were trading down 3.5 percent at 16.07
euros, the worst performer in the French blue-chip CAC 40 index
. DirecTV shares rose. DirecTV shares rose 5.7
percent by $3.05 to $55.64.
"Hopes of a radical shake-up of the group appear to be
fading," UBS analysts said in a note, adding that the failure to
dispose of GVT would put more pressure on Vivendi to succeed
with its other big sale attempt, its 53 percent stake in Maroc
The failure to sell GVT, which it bought just over three
years ago, is Vivendi's latest disappointment since beginning a
strategic review of its six business units in media and telecoms
in the spring of 2012.
It first sought to unload its 61 percent stake in video
games firm Activision Blizzard, but was unable to find
a suitable buyer given the size of the business and price tag -
Activision has a current market value of $16.8 billion.
A further option now would be to revive talks with cable
operator Numericable on a deal for French mobile telecoms
business SFR. Mergers with France's three other mobile operators
have essentially been ruled out due to regulatory opposition.
Chairman Jean-Rene Fourtou has called the portfolio review
Vivendi's "no taboo era", and his lieutenants have in the past
year laid out a vision of a group with less exposure to the
capital intensive telecoms industry and more focused on media
such as pay TV and music.
Its shares have risen about 30 percent since late April,
when word of the review emerged but Fourtou is now facing the
prospect of having little to report on reshaping the group when
he addresses shareholders at the annual meeting on April 30.
"Vivendi is seeking to present a disposal to shareholders
ahead of its AGM," the UBS analysts said. "Should Vivendi also
fail to sell Maroc (Telecom) then investor focus will shift to
weakening earnings momentum and limited credit rating headroom."
The GVT auction was hampered by the fact the logical
strategic buyers both present in Brazil - Spain's Telefonica
and Telecom Italia - were saddled with high
debts, reeling from recession in Europe, and unable to bid.
That left only DirecTV, which is present in Brazil as a
pay-TV provider, as a trade bidder able to pay a higher
valuation for GVT because of the cost savings it expected to
It offered roughly 6 billion euros ($7.79 billion) in shares
and cash, sources familiar with the situation told Reuters in
late February, while Vivendi had wanted at least 7 billion.
Another person familiar with the situation said the option
of a stock market listing for GVT had also been considered in
the last couple of years.
"GVT management would love this option," the person said.
"But the main issue is valuation. It's not clear that Vivendi
would get the valuation they are looking for in an IPO."
Meanwhile Vivendi is now likely to step up efforts to sell
its other telecom businesses, including its 53 percent stake in
Maroc Telecom and SFR, said Liberum Capital analyst Ian
This could raise around 17 billion euros and allow the group
to return billions to shareholders, he added.
The sale of Maroc Telecom, which has a current total market
capitalisation of nearly $11 billion, has better traction
because there are three bidders - Qatar Telecom, the
United Arab Emirates' Etisalat and South Korea's KT
Corp - banking sources have said.
But final offers for the business, which is 30 percent-owned
by the kingdom, are not due until the end of April, according to
two people familiar with the situation.