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TELEFONICA AND PARTNER TO BUY UP BRAZILIAN OPERATORS

Telefonica Internacional announced plans to launch public tender offers to buy 100 percent of the preferred and common stock of two Brazilian mobile wireless phone companies: Telerj Celular, in Rio de Janeiro, and Telest Celular, in Espiritu Santo.

At the same time, Telefonica and its partner, Iberdrola, a Spanish electric utility, said they plan to initiate a public tender offer for all of the preferred and common stock of two other Brazilian mobile wireless carriers: Telebahia Celular, in Bahia, and Telergipe Celular, in Sergipe.

The tender offers will be executed within 15 days after Telefonica and Iberdrola receive approval from the Comissao de Valores Mobiliaros, Brazil’s stock market regulator.

In their registration filings with Brazil’s CVM, the Spanish companies have agreed to pay holders of the Brazilian carriers’ common and preferred stock a 50-percent premium compared with the shares’ closing price on May 14. They also pledged they would not restructure the four Brazilian companies for at least a year after the tender offer is executed.

“With this public tender offer, Telefonica provides minority shareholders of the four companies the chance to obtain liquidity with an important premium over the market value of the shares,” Telefonica Internacional said.

Telefonica said it estimates all four tender offers will cost a total of $330 million.

“With this transaction, Telefonica strengthens its commitment to the Brazilian economy in general and to the country’s telecommunications sector in particular,” said Antonio Viana-Baptista, chief executive officer.

Telefonica Internacional is part of the Telefonica Group, which manages 36.8 million wireline, 12.3 million mobile wireless and 2.3 million pay television customers in Europe, Latin America and the United States.

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