By David Roman
MADRID--Telefonica SA (TEF) on Wednesday said it has reached a
deal with France's Vivendi SA (VIV.FR) to swap 46 million of its
own shares, accounting for a 0.95% stake in the Spanish telecom
firm, in exchange for a 3.5% stake in Telefonica Brasil now held by
Vivendi.
Telefonica made the announcement in a regulatory filing.
At current market prices, the Telefonica stake that Vivendi is
receiving is valued at 630 million euros ($697 million).
Telefonica said that, as part of the deal, Vivendi has an
unspecified lock-up period during which it can't sell the stake,
and certain conditions-also undisclosed-under which "an orderly
sale of such shares" would be guaranteed.
Last year, Telefonica purchased Vivendi's Brazilian unit GVT for
about EUR7.24 billion, seeking to cement its position in Latin
America's largest market.
Vivendi also received a 7.4% stake in Telefonica Brasil, then
valued at EUR2.02 billion. But the French company has long
expressed a willingness to divest from telecommunication operators
in a bid to reinvent itself as a pure-play media firm.
Telefonica Brasil, the Spanish company's largest unit by sales
and Brazil's top operator by market share, earlier Wednesday posted
a 56.4% fall in second-quarter net profit, largely due to the
absence of extraordinary gains that inflated profit in 2014, on
BRL10.42 billion revenue, up 5.4% on the year.
Write to David Roman at david.roman@wsj.com
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