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

To: wl9839 who wrote (15370)	5/18/1999 2:54:00 PM
From: wl9839	Read Replies (1) \| Respond to of 22640

DJ Brazilian Telecom Stocks Soar On Telefonica Offer By STEPHEN WISNEFSKI Dow Jones Newswires SAO PAULO -- Brazilian telecommunications stocks are posting huge gains at midsession Tuesday on optimism about consolidation in the sector after Spain's Telefonica SA (TEF) announced a $330-million tender to increase its stake in four cellular phone carriers. After the market close Monday, Telefonica launched a bid to acquire all outstanding shares in Telerj Celular SA and Telest Celular SA. Together with Spanish power giant Iberdrola SA (E.IBR), Telefonica made a similar offer for Telebahia Celular SA and Telergipe Celular SA. Telefonica-led groups purchased controlling stakes in the operators at last year's privatization of federal holding Telecomunicacoes Brasileiras SA (TBR). While shares in the four cell phone carriers won't trade again until Friday, preferred shares in Sao Paulo fixed-line giant Telesp SA, also controlled by Telefonica, were up 8.2% to 237.00 reals ($1=BRR1.6695), while ordinary shares had tacked on 9.5% to BRR132.00 by 1750 GMT. Telesp Celular SA - owned by Portugal Telecom SA (PT) - and Telecom Italia SpA-controlled Telepar Celular SA also are soaring. Telesp Celular preferred shares had jumped 10% to BRR82.50. Preferred shares in Telepar Celular led the advancers at midsession, up 17% to BRR102.00. The Sao Paulo Stock Exchange's Bovespa Index was up just 1.4%. Timing Of Announcement Surprises "It's all speculation at this point about the prospects for further consolidation in the sector. There's nothing concrete to justify these gains," said a fund manager at a large Sao Paulo bank. "Many people are hopeful that other groups will boost their stakes in the local telecoms." "Of course it's speculation, but (the Telefonica news) also creates a positive momentum for these stocks because people realize just how cheap they are," another Sao Paulo trader said, adding that a similar decision by Telefonica to buy up Telesp shares could involve astronomical earnings for shareholders. Officials from Telefonica and Portugal Telecom weren't immediately available for comment Tuesday on future plans. Analysts said Telefonica's announcement Monday was a bit of a surprise in terms of timing, but that consolidation is widely anticipated by the market. "Obviously people are thinking now that Telefonica could do the same thing with Telesp and that it's part of a broader trend in the sector," said Sergio Missima, an analyst at Banco Fator in Sao Paulo. The deal announced Monday by Telefonica is valued at up to BRR550 million - or a maximum of $330 million - with the two Spanish groups offering a 50% premium over the price of shares at the close of trading last Friday. The operation is still awaiting the final approval of Brazil's Stock Market Commission, or CVM. -By Stephen Wisnefski; 55-11-813-1988; swisnefski@ap.org