The board of French media conglomerate Vivendi has given the green light to proceed with an offer for GVT, the Brazilian telecommunications company said on Monday.
GVT said it did not know if Vivendi would formalize its offer, or what the terms of that bid would be.
Vivendi, which owns Maroc Telecom and France's second-biggest mobile phone operator SFR, has targeted GVT as part of its plans to expand in fast-growing emerging markets.
The company declined to comment, while a source close to the matter told Reuters it was reviewing the situation.
On September 8, Vivendi launched a tender offer for 100 percent of GVT's capital at 42 reais a share, which valued the Brazilian broadband and telecoms company at about $2.88 billion.
This month, Spain's Telefonica countered with an unsolicited offer of $3.7 billion, setting the stage for a potential bidding war.
The company wishes to clarify that it has no knowledge whether Vivendi will launch a tender offer, nor of its possible terms or timing, GVT said in a Monday statement.
GVT said that on October 16 it was informed by GVT's controlling shareholders Global Village Telecom and Swarth Investments that they were informed by Vivendi that it had completed the confirmatory due diligence on GVT to its satisfaction.
It also said that the board of Vivendi had granted its management the authorization to file a tender offer for the acquisition of GVT's entire share capital,
Vivendi held a board meeting on October14 but has kept quiet since about what its directors discussed.
Most analysts doubt that Vivendi will seek to trump Telefonica's offer.
Telefonica could offer more than Vivendi given scope for greater synergies. Therefore comments that Vivendi is considering its bid for GVT could be more about putting pressure on Telefonica, UBS analysts said in a note on Friday.
We believe Vivendi is keen to maintain their track record of walking away from deals that are not financially attractive,
In July, Vivendi ended talks to buy a majority stake in the African telecoms assets of Kuwait's Zain, saying it did not meet its financial criteria.
Vivendi shares were off 0.3 percent at 19.90 euros in early afternoon trading in Paris, while GVT shares were off 0.51 percent at 49.25 reais in Brazil.
(additional reporting by Dominique Vidalon in Paris)
(Reporting by Todd Benson, editing by David Cowell)