Vivendi in Exclusive Talks With Spain's Telefónica, Ditches Telecom Italia Rival Bid

By Ruth Bender

PARIS--France's Vivendi SA (VIVEF) Thursday said it has decided to enter into exclusive talks with Spanish telecom giant Telefónica SA (TEF) over the sale of its Brazilian telecoms unit GVT, ditching a rival offer from Telecom Italia Spa.

Vivendi's decision came just hours after the French media giant received a sweetened bid from Telefónica and a rival bid by Telecom Italia SpA.

Vivendi's board met earlier Thursday to review the two offers, and announced its decision faster than analysts had expected.

"The Telefónica offer best meets the group's strategic and financial objectives," Vivendi said in a statement.

Vivendi said Telefónica's offer is considered "particularly attractive" as it generates a capital gain of more than 3 billion euros ($3.95 billion) and allows the two companies to jointly develop content and media projects.

Vivendi reported an 85% surge in net profit for the first half of the year to EUR1.91 billion, boosted by gains from asset sales.

Revenue for the first six months, however, fell 3.5% to EUR5.55 billion, dragged down by Universal Music Group.

Vivendi was initially due to report first-half earnings after the market close.

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