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Vincent Bollore, chairman of the French media group Vivendi is in favour of a merger merger between GVT and Tim Brasil proposed by Telecom Italia but will have to win over other Vivendi shareholders for the proposal.

Italian-language daily Milano Finanza reported this information in an unsourced article.

The report noted that TI has proposed to Vivendi a merger between its Brazilian mobile unit Tim Brasil and Vivendi's Brazilian fixed line operator GVT. In exchange, Vivendi would become the largest shareholder in TI with a 15-20%. The report said TI's offer has been valued at around EUR 7.2bn.

Vivendi shareholders could be concerned over governance issues, especially in regard to the merged entity to be formed by GVT and Tim Brasil, the article noted. Vivendi is likely to want to hold at least 51% in the new entity, the item added.

The report said that another issue could be the number of directors Vivendi would have on the TI board and the possible veto powers reserved for the TI shares held by Vivendi. Bollore is Vivendi's largest single shareholder with a 5% stake, the item said.

TI is likely to make a formal proposal at its board meeting tomorrow, 27 August. The report added that the Vivendi board is to meet on 28 August.

Another unsourced article in Il Messaggero said that Telefonica was likely to relaunch its offer in the next few hours, both by sweetening the cash component of the offer and drawing up an industrial plan similar to the one outlined by TI.

An unsourced report in La Stampa claimed that Telefonica, which has already made a EUR 6.7bn offer for GVT is about to sweeten its offer in an attempt to fend off the TI bid. The article said that the Telefonica offer, which consists of EUR 4bn in cash plus an 8.3% stake in TI, could be increased to EUR 8bn. The offer would also include a more fleshed-out industrial plan, the report noted.

Source Milano Finanza daily edition, La Stampa, Il Messaggero