Telefónica has improved its bid for Brazilian fixed-line operator GVT as Telecom Italia entered the fray for the Vivendi-owned company for the first time.

The Spanish company said its new binding offer was worth €7.45 billion, up from the €6.7 billion deal it put on the table earlier this month.

The new offer is on the same terms as its original offer but with an increased cash part. Telefónica is now offering €4.7 billion in cash, up from €4 billion.

A 12 percent stake in the newly combined company or swapping this for an 8.3 percent stake in Telecom Italia, in which Telefónica is a minority shareholder, still stands.

Telefónica said the evaluation of unspecified “additional information” was behind the increased bid. It has given Vivendi just 24 hours to consider the new offer.

Meanwhile, Telecom Italia has offered €7 billion as part of a three stage process.

The acquisition of a minority stake in GVT by its TIM Brazil subsidiary would be followed by a merger of the two companies under the TIM brand.

Vivendi would then get €1.7 billion in cash, a 15 percent share of the newly formed company in Brazil plus a 20 percent share of Telecom Italia.

Telecom Italia said the overall deal comprised of 24 percent cash and of 76 percent shares, and offers Vivendi “significant value upside potential”. Its offer is open until 20 September.

France-based Vivendi said its board is currently discussing the two offers.

GVT provides broadband and Pay-TV services in over 150 Brazilian cities in 20 states.

In common with the industry-wide trend, both Telefónica and Telecom Italia are looking to turn their mobile only subsidiaries in Brazil into providers of converged services.

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