Vivendi to enter into exclusive negotiations with Telefonica

Vivendi’s supervisory board has decided to enter into exclusive negotiations with Telefonica while emphasizing the relevance and quality of the Telecom Italia offer.

The company has received binding offers from Telefonica (on August 4 and 28) and Telecom Italia (on August 28) to acquire GVT.

The Telecom Italia offer represents a total enterprise value of €7 billion. It includes a part in cash (€1.7 billion), a part in Telecom Italia shares (16 percent of share capital and 21.7 percent of voting rights) and a part in TIM Brasil shares (15 percent).

The Telefonica offer of August 28 represents a total enterprise value of €7.450 billion. It includes a part in cash (€4.663 billion) as well as a part in Telefonica Brasil shares (12 percent) of which about one third can be exchanged at Vivendi’s discretion for 5.7 percent of the share capital and 8.3 percent of the voting rights in Telecom Italia.

The divestment from GVT would allow selling the last telecom company wholly-owned by Vivendi after the disposals of Maroc Telecom and SFR.

Telefonica’s offer is considered particularly attractive, generating a capital gain of more than €3 billion. The other conditions of the offer, limiting to a strict minimum the risk of executing the operation as well as Vivendi’s commitments after the sale, are totally in line with Vivendi’s objectives.

The agreement between Telefonica and Vivendi would allow the development of joint projects in ​​content and media. In addition, if it so wish, Vivendi could become a shareholder in Telecom Italia by exchanging its Brazilian shares for Italian ones.

The Telefonica offer best meets the group’s strategic and financial objectives. Vivendi begins a new phase in its development to become an integrated industrial group focused on media and content. Its objective is to pursue its development through the organic growth of its subsidiaries and a close collaboration between them, which do not preclude the group from taking minority positions in allied companies to distribute content.

The management board will submit the Telefonica offer to the relevant employee representatives.

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