* Bid to value GVT at roughly 7 bln euros
* Vivendi would get 15-20 pct in Telecom Italia -sources
* Would get 12 pct of new combined Brazil firm -sources
By Stefano Rebaudo, Stephen Jewkes and Pamela Barbaglia
MILAN, Aug 26 (Reuters) - Telecom Italia will make a bid valued at roughly 7 billion euros ($9.2 billion) for Vivendi's Brazilian broadband unit GVT, which would leave Vivendi with a 15 to 20 percent stake in the Italian group, said four people familiar with the matter.
Telecom Italia is competing with Spain's Telefonica for control of GVT, which sells high-end broadband and pay-TV packages to consumers in Brazil.
Telefonica, Telecom Italia's biggest shareholder, offered Vivendi around 4 billion euros in cash for GVT plus a 12 percent stake in the newly combined group.
Brazil is crucial for both Telefonica and Telecom Italia, because its market still has growth potential, especially in broadband and pay-TV, compared with the more mature market in Europe.
They already control the two largest mobile operators there, Telefonica's Vivo and Telecom Italia's Tim Brasil .
Acquiring GVT would be especially important for Telecom Italia since it is the only Brazilian mobile operator without a fixed-line network and has a market share of less than 1 percent in broadband.
Telefonica had an 18.4 percent broadband market share at the end of the first quarter, behind America Movil and Oi , while GVT had 12.7 percent.
Telecom Italia's offer, set to be discussed at a board meeting on Wednesday, is structured around a merger of GVT with TIM Brasil.
Vivendi would be paid with a 15 to 20 percent stake in Telecom Italia via a reserved capital increase and would also get a small amount of cash, the sources said, without elaborating on the amount. It would also retain a roughly 12 percent stake in the Tim Brasil-GVT combined entity, one person close to the deal said.
It remains to be seen how Vivendi will respond to the duelling bids for GVT. The board of Vivendi is expected to discuss the situation at a meeting before second-quarter results are published on Thursday.
The Paris-based group has sold two of its three telecoms businesses in the past two years in an effort to refocus on its media activities, which include Universal Music Group and French pay-TV operator Canal Plus.
A sale of GVT, its last telecoms asset and smallest business, would fit that pattern, although Vivendi said in early August after Telefonica's bid that none of its units were for sale.
A spokesman for Vivendi said on Tuesday that any offers it received for GVT would be reviewed by the board.
Telefonica and Telecom Italia declined to comment.
Telecom Italia has less balance sheet flexibility than Telefonica, and the cash portion of its offer is expected to be lower than the rival bid, the sources said.
But Telecom Italia is pinning its hopes on the fact that Vivendi does not need cash after agreeing this spring to sell its largest unit, French telco SFR, for roughly 17 billion euros and that its powerful chairman and largest shareholder, Vincent Bollore, could be keen to expand in Italy, one of the sources said.
"Vivendi is not all that interested in cash, since it's got plenty already, but wants a strategic deal where it can sell its content," a person close to the Italian company said.
To that end, Telecom Italia is casting its offer as providing a way for Vivendi to distribute its music and television content in Italy, the source said.
Telecom Italia is also hoping personal ties will tip the balance in its favour.
French tycoon Bollore owns 7 percent of Mediobanca , the investment bank that has long been at the heart of Italy's high finance, according to the bank's website. Mediobanca is also one of Telecom Italia's advisers on the GVT deal.
Telefonica too has included a clause in its GVT bid that would allow Vivendi a way to distribute more of its television content, a source said on Aug. 18.
Italian newspapers said on Tuesday Telefonica could increase its overall offer for GVT to as much as 8 billion euros and that Bollore was meeting with Telefonica Chief Executive Cesar Alierta. (1 US dollar = 0.7594 euro) (Writing by Silvia Aloisi and Leila Abboud; editing by Jane Baird)