17th Mar 2006 17:30
Telefonica SA17 March 2006 Telefonica S.A., as provided in article 82 of the Spanish Securities Market Act(Ley del Mercado de Valores), hereby reports the following SIGNIFICANT EVENT The Executive Committee of TELEFONICA, S.A., at its meeting held today March17th, 2006, has resolved to ratify the start of negotiations aimed at achievinga possible merger between TELEFONICA, S.A. (as acquiring company) andTELEFONICA MOVILES, S.A. (as acquired company), as was announced to themarkets yesterday. Today TELEFONICA .S.A. has issued the relevant invitationto TELEFONICA MOVILES to begin the negotiations. As was indicated in yesterday's report of significant event, the exchange ratioproposed by TELEFONICA, S.A. as basis for negotiations is 4 shares ofTELEFONICA, S.A. of 1 Euro nominal value each for every 5 shares ofTELEFONICA MOVILES, S.A of 0,5 Euro nominal value each. It is likewiserepeated that should the transaction proceed in accordance with the proposedterms, the Board of Directors of TELEFONICA S.A will propose to its GeneralShareholders' Meeting an increase of its share capital of a maximum of261,320,118 shares, deducting, if applicable, the number of shares owned astreasury stock by TELEFONICA S.A . Telefonica likewise reports that the proposed operation will not affect theshare buyback programme planned for 2007. Madrid, March 17th , 2006 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
TDE.L