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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: wl9839 who wrote (15343)	5/17/1999 9:51:00 PM
From: wl9839	Read Replies (1) \| Respond to of 22640

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