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Microcap & Penny Stocks : PLFM - Undervalued with great potential -- Ignore unavailable to you. Want to Upgrade?

To: Rory McLeod who wrote (3859)	7/29/1998 8:14:00 AM
From: Mags	Read Replies (1) \| Respond to of 9096

The Telebras bidders -- who wants what Reuters Story - July 29, 1998 00:57 Jump to first matched term By William Schomberg RIO DE JANEIRO, July 28 (Reuters) - Their strategies remain top secret, but several leading telecommunications firms appear to be on collision courses when Brazil privatizes the 12 subsidiaries of telecom Telebras . Once the government overcomes injunctions currently blocking the auction, bidding is likely to be fiercest for fixed-line company Telesp and cellular firms in the busy Southeast. Telecommunications analysts predicted premiums ranging from 20 percent to as high as 100 percent over the combined minimum asking price of $11.5 billion for the 12 subsidiaries. The auction is officially scheduled to begin at 1000 local time/0900 EDT/1300 GMT on Wednesday. Following is a breakdown of how the analysts expect the bidding to go. TELESP - a fixed-line company covering industrialized Sao Paulo, minimum price 3.52 billion reais. Considered the jewel in Telebras' crown, Telesp is likely to draw the most competition with bids expected from BellSouth Corp. of the United States, Telecom Italia and possibly Spain's Telefnica , analysts said. BellSouth is seeking to consolidate on the B Band cellular concession it bought for $2.45 billion last year in Sao Paulo. The U.S. carrier has teamed up with local bank Banco Safra, its partner in last year's B Band bid. Telecom Italia is hoping for better luck than last year when it was narrowly beaten by Telefnica de Espaa to CRT, a phone company in Brazil's southern Rio Grande do Sul state. It has lined up powerful partners in the form of Bradesco , Brazil's biggest private bank, and Globopar, the investment wing of Brazil's Organizacoes Globo media empire. Telefnica de Espaa -- which has already bought into telecoms in Argentina, Peru, Chile and Puerto Rico -- is also widely expected to bid for Telesp. "Telefnica wants to become the dominant operator in Brazil and they have strong ambitions," said William Laurent, an analyst with Robert Fleming & Co. in London. "They're very likely to want to buy Telesp." Other analysts said Telefnica might instead support a bid for Telesp by strategic partner Portugal Telecom . TELE CENTRO-SUL (1.95 billion reais) - a fixed-line company covering southern and central Brazil all the way up to the Amazonian border states of Acre and Rondonia. Telefnica is also believed to be interested in Tele Centro Sul which would add to the foothold it established last year with the purchase of CRT. Should it win Telesp, Telefnica may support a bid by Portugal Telecom for the wireline company. Telecom Italia and its partners could bid for Tele Centro Sul should they fail to pick up Telesp, said Daniella Pires of financial group Opportunity. Also interested are foreign investment funds, market watchers say. TELE NORTE LESTE (3.4 billion) - a fixed-line company covering busy Rio de Janeiro and Minas Gerais states, the poor Northeast and the sparsely populated Amazon region. The losers in the Telesp auction might settle for Tele Norte Leste as a reasonable alternative, most analysts say, although Marcelo Mollica of Banco Icatu said he expected any premium on the company would be small. Sergio Goldman of Banco Santander said he believed France Telecom might be mulling a bid for Tele Norte Leste. EMBRATEL (1.8 billion reais) - Telebras' long-distance and international carrier. Sprint Corp. and MCI Communications Corp. are widely predicted to be plotting rival bids for Embratel. An MCI spokesman that contrary to market rumors, MCI was still "very interested" in Embratel. TELEBRAS' CELLULAR COMPANIES Of the eight cellphone units on offer, Telesp Celular , covering affluent Sao Paulo state and priced at 1.1 billion reais, is seen as the biggest prize. Analyst Mollica said he expected Portugal Telecom, AirTouch Communications Inc. of the United States and Telecom Italia would bid for Telesp Celular, while Goldman said Southwestern Bell might also be interested. Tele Sudeste (570 million reais) covering Rio de Janeiro and Espirito Santo states would be natural target for BellSouth because it would complement its B Band cellular operations in Sao Paulo city and any acquisition it might make in Telesp. Tele Celular Sul in the developed southern states of Parana and Santa Catarina (230 million reais) was also another target for companies like France Telecom , Mollica said. Lightel, a telecommunications venture of Brazilian industrial group Algar, was expected to bid for Telemig Celular (230 million reais) in Minas Gerais state, while the less lucrative cellular companies in the North and Northeast were seen attracting private equity funds.