Telefonica lines up nine banks for 3 bln euro capital hike- source

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LONDON, March 19 (Reuters) - Spanish telecoms firm Telefonica has lined up nine banks to run its 3 billion euro ($3.2 billion) capital increase in connection with its purchase of Vivendi (Swiss: VIV.SW - news) 's Brazilian unit GVT, a source familiar with the matter said on Thursday.

UBS (NYSEArca: FBGX - news) , Morgan Stanley (Xetra: 885836 - news) and JP Morgan will lead the deal, which could be announced as soon as next week, the source said.

BofA Merrill Lynch, Barclays (LSE: BARC.L - news) and HSBC are also running the deal, as well as domestic banks BBVA, CaixaBank (Other OTC: CAIXY - news) and Santander, the source added.

The banks either declined to comment or were not immediately available to comment.

French media group Vivendi agreed to sell broadband business GVT to Telefonica in September last year for a cash and share deal worth around 7.2 billion euros.

Telefonica said at the time that it would finance the GVT purchase through a capital increase in its Brazilian business and at the parent company.

Telefonica plans to fold GVT into its Vivo-branded Brazilian mobile phone business to create the country's biggest telecom group, Telefonica Brasil.

The deal is part of a wave of telecoms consolidation, as firms in the sector increasingly seek to offer bundles of mobile and fixed-line services like broadband internet. ($1 = 0.9409 Euros) (Reporting By Freya Berry; additional reporting by Sarah White and Jesus Aguado in Madrid; editing by Anjuli Davies and Susan Thomas)