DJ Telefonica Launches Tender For Brazil Cell
Unit Shares
Dow Jones Newswires
SAO PAULO -- Spanish groups Telefonica SA (TEF) and Iberdrola SA (E.IBR)
Monday announced a tender to acquire all outstanding shares in four Brazilian cell
phone carriers.
In a written statement, the two Spanish companies said they have asked the
Brazilian Stock Market Commission for authorization to purchase all remaining
shares in Telerj Celular, Telest Celular, Telebahia Celular and Telergipe Celular.
Telefonica led groups that acquired controlling stakes in the four companies last
July, as part of the privatization of former federal holding Telebras.
The deal is valued at approximately 550 million reals ($1=BRR1.668).
Shareholders in the companies will be offered a premium of 50% over the closing
share prices last Friday, the statement said.
Once the deal is approved by the CVM, minority shareholders will have 15 days
to exercise their right to sell. The offer is valid for both preferred and ordinary
shares.
"With this operation, Telefonica and Iberdrola will be giving more liquidity to the
minority shareholders of its cellular phone companies," the statement said.
Tele Sudeste Celular Participacoes, the holding company for Telerj and Telest,
and Tele Leste Celular Participacoes, which controls Telebahia and Telergipe,
won't be eligible to purchase the outstanding shares.
For the largest of the four cell phone carriers, Rio de Janeiro's Telerj, the Spanish
groups will offer BRR58.20 for preferred shares and BRR34.50 for ordinary
shares. The outstanding Telerj shares represent 28.70% of total capital stock in
the company.
Telefonica has asked the CVM for approval to acquire 8.75 billion shares in Telerj
Celular and 300 million in Telest Celular, which provides service in the states of
Rio de Janeiro and Espirito Santo. Telefonica, along with Iberdrola, has asked the
CVM for authorization to acquire 780 million shares in Telebahia Celular and 266
million in Telergipe Celular, which serve the northeastern states of Bahia and
Sergipe, respectively.
The statement said that, with the public offer, Telefonica and Iberdrola are
ensuring stability in the shareholding structure of the four cell phone carriers for a
period of at least 12 months.
"With this offer, Telefonica strengthens its commitment to the Brazilian economy in
a general way and, specifically, to the telecommunications sector," Telefonica
International president Antonio Viana-Baptista said in the statement.
"It's a direct investment and can be considered new money for Brazil," said the
president of Iberdrola's Brazilian operations, Esteban Serra Mont.
Telefonica and Iberdrola were advised by Morgan Stanley Dean Witter and
Goldman Sachs & Co. on the deal.
Telefonica also controls Telesp Participacoes SA, Brazil's largest fixed-line
telecommunications group serving the state of Sao Paulo.
-By Stephen Wisnefski; (55-11) 813-1988; swisnefski@ap.org
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