) - the largest satellite TV operator in the U.S. has planned to
move out from Global Village Telecom's (GVT) buyout proposal of
nearly €6 billion ($7.76 billion). Hence, withdrawing from the
offer will allow KKR & Co. LP to bid solely for the
In an effort to increase their presence in emerging Brazilian
markets, cable Multi Service Operators (MSO) like
Liberty Global Inc.
) and telecom giant
) were all eyeing for Vivendi SA's subsidiary unit GVT - a
Brazilian telecom carrier.
GVT operates in 136 cities in Brazil and offers fixed
telephone, broadband and Voice over Internet Protocol (VoIp)
service to both business and normal customers. The company
started its new pay-TV service in Jan 2012, indicating strong
growth potential with 18.8% penetration rate within its broadband
subscriber group. Moreover, during 2012 the company added 406,000
customers with an 11.4% Brazilian pay-TV market share.
We believe, DIRECTV's plan to participate for bidding GVT
assets will not only help them to gain market traction but will
also facilitate DIRECTV to counter stiff competition, which
exists in the Brazilian pay-TV markets. Moreover, the company is
one of the leading satellite TV service providers in the country,
so acquiring GVT's broadband business assets may further boost
the company's online channel viewing options.
At the end of fiscal 2012, DIRECTV had $1,902 million in cash
and cash equivalents and $17,170 million of outstanding debt on
its balance sheet. A further acquisition of $7.76 billion of GVT
assets will increase the company's leverage.
Currently, DIRECTV carries a Zacks Rank #3 (Hold).
Other Stocks to Consider
Meanwhile, one can look at
), which carries a Zacks Rank #2 (Buy).
AMER MOVIL-ADR (AMX): Free Stock Analysis
COMCAST CORP A (CMCSA): Free Stock Analysis
DIRECTV (DTV): Free Stock Analysis Report
LIBERTY GLBL-A (LBTYA): Free Stock Analysis
To read this article on Zacks.com click here.