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

To: steve kammerer who wrote (15353)	5/18/1999 11:09:00 AM
From: wl9839	Read Replies (1) \| Respond to of 22640

Steve, The following is an excerpt from Reuters I posted last night as to which Baby Bras are affected: "Telecom giant Telefonica last year bought a controlling stake in Brazil's Tele Sudeste Celular holding, which owns Telerj and Telest Celular. It joined Spanish utility firm Iberdrola in a group which won Tele Leste Celular holding, which owns Telebahia and Telergipe." It is unclear as to what, if any, affect this tender offer may have. Putting a true controlling block of these companies stock directly into telefonica's hands may in fact have a negative effect on the holders of the holding company stock-i.e. ability to do management contracts at the subsidiary level to siphon off revenues. On the other hand, it may enhance the perception of the value of the adr. I will post any commentary on the subject I come across. WJ

To: steve kammerer who wrote (15353)	5/18/1999 12:47:00 PM
From: Steve Fancy	Respond to of 22640

Steve, these offers appear to all be for four of the 53 underlying companies that comprise the 12 ADR's. I wouldn't expect huge intrinsic impact on the ADR price with a 50% premium over current prices. In fact, these offers likely are considerably less than the portions of the companies that were sold at auction last fall. Just guesswork at this point, but cummulatively with all four purchases, I'd be surprised if the ADR price saw more than a point or two intrinsic gain. Overall I'd guess it would be a general positive as it shows strong belief in Brazil at a crucial point. TCS is a wireline and I'd guess unrelated. Due to the higher stock price of TCS it has always been considerably more volatile, but on a fraction of the volume of other wirelines. Look at today, only 31K traded so far with no block trades....this is not unusual for TCS. Seems to only be a handful of players here. Have to admit I've watched with great interest, but even the options premiums were 2x or better TNE and others so I've stayed away from them....but only because I'm so heavily invested in Brazil. sf