Nov. 16 (Bloomberg) -- Vivendi SA Chief Executive Officer Jean-Bernard Levy, who snatched Brazil’s GVT (Holding) SA away from Telefonica SA late last week, got what he earlier this year said he enjoys: “the revenge of the underdog.”

Levy defied the expectations of analysts from Paris to Sao Paulo by winning GVT instead of walking away from a bidding war with Telefonica, which is already a dominant player in the Brazilian phone market. Vivendi, owner of the world’s largest music company, said Nov. 13 it gained control of GVT, after its $4.18 billion offer topped Telefonica’s $4 billion bid.

“Levy is prudent, exacting and has a long-term vision,” said Emmanuel Soupre, who helps manage about $24 billion at Neuflize OBC in Paris. “The price Vivendi paid is very high, but it’s also a reflection of GVT’s potential.”

The next piece of 54-year-old Levy’s strategy may be selling Vivendi’s stake in NBC Universal, a decision that controls the fate of a planned joint venture by partner General Electric Co. and Comcast Corp. Shedding NBC would allow Levy to further his ambition to expand in emerging markets and boost the Paris-based media company’s revenue growth.

The window for Vivendi to sell its 20 percent stake in NBC, valued at about $6.4 billion in the French company’s 2008 annual report, opened yesterday. Under the agreement with Fairfield, Connecticut-based GE, which owns the rest of the television network, Vivendi can notify GE of its intention to sell the stake between Nov. 15 and Dec. 10 every year until 2016.

‘Clear Signal’

“Vivendi’s purchase of GVT is a clear signal they’ll sell their NBC stake,” Soupre said. “It’s a major operation that will be financed by the disposal.”

Vivendi spokesman Antoine Lefort declined to comment on the possible sale of the NBC stake.

Vivendi’s decision would pave the way for GE and Comcast to combine their media assets, people familiar with the talks said last month. It would let GE gradually exit the media business, ceding it to the largest U.S. cable company, Comcast.

In addition to Universal Music Group, Vivendi currently owns controlling stakes in SFR, France’s second-largest mobile- phone operator, and Maroc Telecom, Morocco’s largest telecommunications company. It also controls Canal Plus, France’s biggest pay-TV operator, and bought a majority stake last year in U.S. video-game company Activision, combining it with Vivendi Games to create Activision Blizzard Inc., producer of such titles as “World of Warcraft” and “Guitar Hero.”

‘Naïve’

Levy is unapologetic about his strategy of building disparate businesses, saying that management style is more important than a “textbook approach.”

“I enjoy the revenge of the underdog,” Levy said in a March interview.

Vivendi’s businesses rely on subscriptions rather than advertising, making the company more resilient in an economic slump, he said.

“‘Conglomerates’ is almost like a rude word,” Levy said in the interview. “There is no problem running a media conglomerate. It works well.”

Although a far cry from the days when former Vivendi CEO Jean-Marie Messier amassed billions of euros in debt spending $77 billion on acquisitions to transform a 150-year-old water utility into a rival to AOL Time Warner Inc. and Viacom Inc., Levy’s push to seek growth through the purchase of assets such as Brazilian phone company GVT is raising concern.

“Some would call Levy’s move audacious, but I think it’s naive,” said Alexander Wisch, a media analyst at Standard & Poor’s Equity Research in London. “They are going against Telefonica in” a market it dominates, he said.

Shareholders’ Gains

Wisch called the deal “very expensive” and said Vivendi shouldn’t have done it. The offer amounts to 11.5 times GVT’s estimated earnings before interest, taxes depreciation and amortization this year of about $364 million.

“At this level, they are probably very close to value dysfunction if they can’t justify synergies,” said Andrew Lynch, who manages $1.8 billion at Schroder Investment Management Ltd. in London and holds Vivendi shares.

Vivendi spokesman Lefort said GVT’s annual growth is 30 percent. “The offer for GVT is in line with Vivendi’s strategy of expanding in high-growth countries,” he said yesterday. He declined to comment further on the price.

Levy, who took over as CEO in 2005, has helped Vivendi weather the recession better than U.S. publishers and broadcasters including Rupert Murdoch’s News Corp.

Acquisition Hunt

Shareholders of New York-based News Corp. and Sumner Redstone’s Viacom Inc., also headquartered in New York, haven’t seen the kind of gains Levy has delivered since joining Vivendi in 2002. Vivendi shares more than doubled from a low of 9.30 euros the week he started, closing at 19.81 euros on Nov. 13. The shares fell as much as 2.90 percent to 19.26 in Paris today.

News Corp. has risen about 40 percent in the same period to $12.61, while Viacom is down 22 percent since it became separate company in 2006, splitting from CBS Inc.

Levy, an engineer, started his career at France Telecom SA, then a state-owned phone monopoly. He joined Vivendi in August 2002 as chief operating officer, working with then-CEO Jean-Rene Fourtou, who had been brought back from retirement to save the company that was near-collapse under 19 billion euros of debt amassed under his predecessor, Messier.

Levy’s acquisition hunt has been prompted by a search for growth. In 2008, Vivendi sales rose 17 percent, aided by the Activision and Neuf Cegetel acquisitions. On Nov. 12, Vivendi said that in the first nine months of this year, sales advanced at a slower pace of 9.8 percent.

Brazil’s Potential

GVT has 2.5 percent of the fixed-line market and is Brazil’s fourth-biggest high-speed Internet provider, with a 15,000-kilometer (9,300-mile) fiber-optic network.

Unlike Vivendi, Madrid-based Telefonica is already a major player in Brazil, its second-biggest market after Spain. It had offered to buy GVT shares for 50.50 reais each, 20 percent more than Vivendi’s initial Sept. 8 offer of 42 reais.

The bid was “the highest price we could offer considering synergies between Telefonica and GVT,” Antonio Carlos Valente, CEO of Telefonica’s unit in Brazil, said after Vivendi’s announcement it was taking control of GVT.

Vivendi in September offered $3 billion for GVT. Telefonica, Europe’s second-largest phone company, countered the bid with an offer of $3.7 billion and then raised it to about $4 billion. On Nov. 13, Vivendi said it purchased GVT stock and options amounting to about a 58 percent stake in the Curitiba, Brazil-based telephone company, offering to buy the rest.

“Brazil is a very big market with a rapid population growth,” Schroder’s Lynch said. “It’s still under-penetrated. When you take all these factors, the growth prospects there are clearly much higher than in France on other western European countries. Vivendi needs that kind of growth to justify its own valuations.”

To contact the reporter on this story: Ladka Bauerova in Paris at lbauerova@bloomberg.net

Last Updated: November 16, 2009 04:11 EST