VIVENDI (BUY, TP E24) WE PRESS ON A POTENTIAL TIT/VIV DEAL: Acc to Il Sole
24 Ore, as part of a potential deal between TIT and VIV, Tim Brazil could have
a capital increase that would see TIT’s 67% stake diluted to 50% in the new
company that would be born from a merger of GVT and Tim Brazil. This would then
be followed by a TIT's capital increase reserved to VIV which would allowed the
latter to become a shareholder in the Italian historical telecom operator. The
newspaper also reports VIV will make a decision on TEF's offer for GVT on its
Aug 28th board meeting, while La Stampa mentions a TIT's board meeting on Aug
25th to formally consider an offer on GVT
==> We believe VIV could consider selling GVT, as the TEF's offer could be
attractive enough (E6.7bn valuation + VIV holding a stake in the new Vivo/GVT
company, benefiting from synergies before probably exiting) and as a potential
takeover battle could start. BUT we have a hard time believing VIV could accept
being paid in TIT's shares in case TIT enters the battle