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To: JohnG who wrote (117578)	4/29/2002 8:09:51 AM
From: John Carragher	Respond to of 152472

Telefonica Moviles to Acquire Stake In Mexican Wireless Firm Pegaso By ROBERT FRANK Staff Reporter of THE WALL STREET JOURNAL Spanish mobile-phone giant Telefonica Moviles SA has agreed to purchase a 65% stake in Mexican wireless operator Pegaso for between $80 million to $90 million, plus the assumption of about $1.27 billion in debt and other considerations. The deal, which was expected, could be announced as early as Monday morning and gives Telefonica control of Mexico's second-largest wireless operator. Telefonica is buying the stakes from Sprint PCS, Leap Wireless, Citicorp Equity Capital, AIG-GE Capital Latin America Infrastructure Fund and the Nissho Iwai Corporation. Most of the debt is being acquired from Qualcomm Inc., which is Pegaso's largest creditor. Under terms, Telefonica will acquire a 65% in Pegaso for a total of $1.36 billion, including between $80 million to $90 million in equity, and the assumption of about $1.27 in debts and other considerations including equity. The remaining 35% of the company will continue to be held by the Grupo Burillo. With the acquisition, Telefonica aims to strengthen its presence in Mexico and challenge the country's dominant operator, American Movil. When Pegaso is with Telefonica Moviles Mexico, the combined company will have about 2.1 million subscribers, compared to America Movil's more than 17 million subscribers. The deal caps Telefonica's aggressive acquisitions in the late 1990s, which included wireless companies throughout Europe and Latin America. Telefonica has acquired stakes in operators in Chile, Brazil, Argentina, Peru, Central America and Venezuela, investing nearly $25 billion to become the largest telecom operator in the region. Greenhill & Co. acted as financial adviser to Pegaso, while Lazard LLC advised Telefonica and Morgan Stanley advised Qualcomm. Write to Robert Frank at robert.frank@wsj.com Updated April 29, 2002