Vivendi is considering selling its Brazilian telecom unit GVT, Reuters reports, citing unnamed sources familiar with the matter. According to the same souses, the GVT sale could be worth up to EUR 8.5 billion and comes after Vivendi’s exploratory talks to offload video games unit Activision Blizzard found few takers at the price it sought. "A sale of GVT is no longer taboo and is now being considered internally," one of the sources said.
Working for Vivendi, Goldman Sachs and Barclays made the rounds in recent weeks to find bidders for its 60 percent stake in Activision. Vivendi was initially planning to get a roughly 25 percent premium over the USD 8.3 billion market value of the Activision stake and preferred to be paid in cash, the sources said.
China's Tencent, US media company Time Warner, as well as Microsoft, Apple and Facebook were all sounded out, and none met Vivendi's expectations, the sources said. Vivendi later said that it would consider a lower premium of roughly 12 percent, one source said. "Vivendi will now think about its options on Activision and take a decision in the coming months," said a source close to the talks. Via the GVT sale, Vivendi seeks to reduce telecoms holdings that chairman Jean-Rene Fourtou sees as too risky and too capital-intensive, said two sources familiar with the company's strategy.
In addition to looking for a tech or media company to buy Activision, the sources said another option that is currently being considered is for Activision itself to buy out Vivendi's 60 percent stake. The video games company has hired JP Morgan and Allen & Co to advise it on the transaction. Activision executives, including CEO Robert Kotick, are interested in such a deal, but it is not clear they could offer enough of a premium to tempt Vivendi, the sources added. The games company would need to raise some USD 5 billion in debt to finance the deal or partner with a private equity fund.
Another source said that Vivendi could take interim steps to reassure credit rating agencies concerned about its debt load. "Vivendi was hoping to get at least a bidder to challenge Activision's management and get a decent premium," said the source. "But it didn't happen so now they are considering other options to raise cash and maintain the rating in the short term.", the source added. Among the options, the person said, are issuing a EUR 500 million convertible bond or selling shares of Activision or Maroc Telecom, which are both listed, for about USD 1 billion, the person added.
