Telefonica is considering raising the value of its offer for Brazilian broadband provider GVT to €8 billion in an attempt to head off a potential counter-offer from Telecom Italia, it emerged on Tuesday.
The Spanish operator may present a revised offer before its Italian peer has made a formal bid and ahead of GVT parent Vivendi's planned board meeting on Thursday, Bloomberg reported, citing an unnamed source.
Telefonica tabled a cash and stock offer for GVT worth €6.7 billion earlier this month with a view to merging the business with its Brazilian mobile unit Vivo.
Telecom Italia would also benefit from adding GVT to its Brazilian portfolio, which currently consists of mobile operator TIM Brasil, and has been reportedly preparing a bid of its own. Last week Bloomberg claimed that Telecom Italia's offer will come in at around €7 billion, including the transfer of a 20% stake in itself to Vivendi. Shortly afterwards Reuters reported that Telefonica's offer could match Telecom Italia's if the Spanish firm includes a content-sharing element.
GVT would prove a positive addition to both companies, and losing out on the asset to the other would potentially have a negative impact. As such, it is not surprising that Telefonica is considering making a bigger offer if it believes Telecom Italia is likely to go ahead with its bid; the Italian firm has confirmed its interest in GVT, but has not made any further public comment.
And Telecom Italia does appear to be serious in its interest.
Italian newspaper Il Corriere della Sera at the weekend reported that Telecom Italia chairman Giuseppe Recchi and CEO Marco Patuano met with Vivendi chairman and major shareholder Vincent Bolloré in Sardinia and "the meeting went well".
Telecom Italia's board will convene on Wednesday, the paper added.