Private equity firms, Apax Partners LLP and KKR & Co. L.P. (NYSE:KKR) teamed up in bidding against DIRECTV (NASDAQ:DTV) to purchase Vivendi SA (EPA:VIV)’s telecommunication subsidiary in Brazil, for $6.8 billion (€ 5 billion), according to a report from Bloomberg citing unnamed sources.
According to the report, the proposal of the private equity firm’s group, which also includes Gavea Investimentos Ltd, owned by JPMorgan Chase & Co. (NYSE:JPM) and Cambuhy Investimentos Ltd, is lower than the €8 billion asking price of Vivendi SA (EPA:VIV).
Grupo BTG Pactual, the largest investment bank in Latin America is still considering whether it will join the group’s bid. Earlier this month, it was reported that Grupo BTG Pactual withdrew its bid to acquire GVT.
A person familiar with the bidding told Bloomberg that DIRECTV (NASDAQ:DTV) remains interested in the acquiring GVT because the deal is beneficial for the company. According to the source, the proposal of the satellite-television provider is closer to the asking price of Vivendi.
DirecTV is the third largest satellite-television provider in the United States. The company’s business operation in Latin America continues to grow due to the increased patronage of its TV and internet service. However, the company lost some of its subscribers in the United States during the second quarter last year.
On January 8, last year, during the investors' conference of the company, Mike White, chief executive officer of DIRECTV (NASDAQ:DTV) said, “I see it as a nice-to-have, not a must-have. There are synergies, but it’s still a work in the process, and I can’t yet tell you whether the synergies are big enough for me to get comfortable that they can more than offset the premium. All that depends on the price.”
Bloomberg also said some of the potential buyers of GVT are preparing to submit their proposals during the second round of the bidding process, which will close by the end of February.
Vivendi SA (EPA:VIV) purchased GVT for $4.18 billion in 2009 after winning against the bid of Telefonica S.A. (NYSE:TEF)(MCE:TEF). In April, Morgan Stanley (NYSE:MS) estimated that GVT’s market value is around €5.2 billion. Vivendi is also considering an initial public offering for GVT, according to a person familiar with the situation. Last August, the company retained Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB) and Credit Suisse Group AG (NYSE:CS) as its financial advisers.