Schedule TO

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE TO

(Rule 14d-100)

TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)

OF THE SECURITIES EXCHANGE ACT OF 1934

BRASIL TELECOM PARTICIPAÇÕES S.A

(Name of subject company (Issuer))

TELEMAR NORTE LESTE S.A

(Names of Filing Persons (Offerors))

 

Preferred Shares, no par value, and American

Depository Shares

(Title of classes of securities)

 

105530109

(CUSIP number of preferred shares)

 

Roberto Terziani

Investor Relations Director

Rua Humberto de Campos, 425

7º andar

Leblon, Rio de Janeiro, RJ, Brazil 22430-190

Tel: +55 21 3131-1208

(Name, address, and telephone number of person authorized to receive notices and communications on behalf of Filing Persons)

CALCULATION OF FILING FEE

Transaction Valuation*

 

Not applicable*

 

Amount of Filing Fee*

 

Not applicable*

 

* A filing fee is not required in connection with this filing as it relates solely to preliminary communications made before the commencement of a tender offer.

 

¨ Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

 

         

Amount Previously Paid:

   N/A                               Filing Party:    N/A
         

Form of Registration No.:

   N/A                               Date Filed:    N/A

 

x Check the box if the filing relates solely to preliminary communications made before the commencement of the tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

 

x third party tender offer subject to Rule 14d-1

 

¨ issuer tender offer subject to Rule 13e-4

 

¨ going private transaction subject to Rule 13e-3

 

¨ amendment to Schedule 13D under Rule 13d-2

Check the following box if the filing is a final amendment reporting the results of the tender offer: ¨

 

 

 


Acquisition of Brasil
Telecom by Telemar Norte
Leste
(TMAR)
April 28, 2008


1
Additional Information and Where to Find It
This presentation is for informational purposes only and is not an offer to purchase or a solicitation of an offer to sell any shares of Brasil
Telecom
Participações
S.A.
(“BRTP”)
or
Brasil
Telecom
S.A.
(“BRTO”).
The
proposed
tender
offers
for
the
outstanding
common
shares
and
a
portion
of
the
preferred
shares
of
BRTP
and
BRTO
described
in
this
presentation
have
not
commenced.
Any offer to purchase or the solicitation of an offer to sell (1) any preferred shares of BRTP, including the preferred shares underlying
BRTP’s
American
Depositary
Receipts,
(2)
any
preferred
shares
of
BRTO,
including
the
preferred
shares
underlying
BRTO’s
American
Depositary
Receipts,
or
(3)
common
shares
of
BRTP
or
BRTO
will
be
made
only
pursuant
to
offers
to
purchase
and
related
materials
that
Telemar
Norte
Leste
S.A.
(“TMAR”)
intends
to
file
with
the
U.S.
Securities
and
Exchange
Commission
(the
“Commission”)
upon
commencement
of
these
offers.
TMAR urges shareholders who are eligible to participate in any of these tender offers to carefully read the offers to
purchase and related materials relating to the offer or offers in which they are eligible to participate when they become
available
and
prior
to
making
any
decisions
with
respect
to
that
tender
offer
as
these
documents
will
contain
important
information about that tender offer.
Following the filing with the Commission of (1) the offers to purchase and related materials relating to the offers for the common shares
and/or the preferred shares of BRTP and/or BRTO, or (2) any other tender offer materials related to the offers for the common shares
and/or
the
preferred
shares
of
BRTP
and/or
BRTO,
shareholders
of
BRTP
and
BRTO
will
be
able
to
obtain
the
filed
documents
free
of
charge
on
the
Commission’s
website
at
www.sec.gov
or
from
TMAR.
This presentation is also being made in respect of (1) the proposed merger (incorporação) of BRTP with and into BRTO, and (2) the
proposed merger (incorporação) of BRTO with and into TMAR.  In connection with the proposed merger of BRTP with and into BRTO,
TMAR plans to cause BRTO to file with the Commission (1) a registration statement on Form F-4, containing a prospectus which will be
mailed to the shareholders of BRTP, and (2) other documents regarding this proposed merger.  In connection with the proposed merger
of BRTO with and into TMAR, TMAR plans to file with the Commission (1) a registration statement on Form F-4, containing a prospectus
which will be mailed to the shareholders of BRTO, and (2) other documents regarding the proposed merger.  TMAR urges investors and
security holders to carefully read the relevant prospectus and other relevant materials when they become available as they will contain
important
information
about
the
proposed
mergers.
Investors
and
security
holders
will
be
able
to
obtain
the
documents
filed
with
the
Commission
regarding
the
proposed
mergers,
when
available,
free
of
charge
on
the
Commission’s
website
at
www.sec.gov
or
from
TMAR.


Agenda
2
Restructuring of Telemar Participações
3
Rationale of the Acquisition 
5
Proposed Transaction                 
17


3
Ownership Restructuring -
Telemar Participações
*
Oi employees’
pension fund. ** Pension funds: Previ, Petros, Funcef, FASS and Telos
Current
Ownership
Total
FASS –
Fundação Atlântico*
3
Subtotal
BNDESPAR
4
FIAGO**
5
ALUTRENS
6
ASSECA
7
LEXPART
8
2
1
LF TELECOM
AG TELECOM
% ONs
100.00
4.00
24.55
25.00
19.90
10.00
10.275
10.275
10.275
10.275
AG TELECOM
1
LF TELECOM
2
FASS –
Fundação Atlântico*
3
Subtotal
BNDESPAR
4
Post Restructuring
Ownership
Total
PREVI
5
PETROS
6
FUNCEF
7
19.34
19.34
11.50
50.18
% ONs
100.00
16.86
12.96
10.00
10.00


4
Agenda
4
Restructuring of Telemar Participações
Rationale of the Acquisition
Proposed Transaction
3
5
17


5
110
Source:
Companies’
press releases; Company analysis.
Objective: To create a multinational telecom company, with
Latin America coverage and over 110 million clients
Oi (TMAR)
BrasilTelecom(BrT)
Oi + Brasil Telecom
+
=
Brazil
Abroad
Total
Current
Million, Dec/07
Fixed-Line
Services
Mobile
Services
Broadband
Pay-TV
3.1
0.0
6
1.5
1.6
31.8
13.9
45.7
All segments
In 5 years
Million
38
22
30
8
12
Oi
BrT
Oi+BrT
Number of Clients
14.2
16.0
8.0
4.3
22.2
20.3


6
*
% not significant (<1%).
The acquisition will have no significant effect on fixed-line
market concentration
Local Fixed
ILD
Mobile
NLD –
inter-
regional
Corporate data
NLD –
intra-
regional
88%
*%
Brazil
88%
*%
86%
86%
57%
1%
58%
*%
64%
64%
79%
*%
79%
*%
86%
86%
39%
1%
40%
*%
37%
37%
29%
0%
29%
0%
13%
13%
37%
2%
39%
4%
43%
47%
Creation of new national players
Region I
Brazil
Region II
National presence (Oi and BrT)


7
14.8
8.6
17.6
12.5
11.2
9.2
0.5
2.8
12.8
1.4
Em-
bratel
Net
Telesp
Vivo
20.5
29.3
Oi
BrT
Claro
Current
Announced
Acquisitions
41.5
TIM
154.3
50.0
17.6
11.2
31.3
0.5
84.4
1.4
Brazilian
Group
Spanish
Group
Mexican
Group
America
Movill
Telmex
Telefo-
nica
81.3
29.3
Oi
BrT
240.1
TI
Global
Brazil
Source:
Companies’
financial statements.
With
the
acquisition
of
BrT,
Oi’s
size
would
be
comparable
to
that
of
its
competitors
in
Brazil
Net Revenues in 2007
R$ billion
Net revenues in 2007
R$ billion
Current
Announced
Acquisitions
Brazilian
Group
Spanish
Group
Mexican
Group
Telemig
Amaz.
Telemig
Amazônia


8
Backbone
Oi
+ BRT
In
the
market
for
domestic
corporate
networks,
there
will
finally
be
a
player
with
domestic
backbone
comparable
to
that
of
Embratel
Embratel
23 state capitals
Covers all 30 most populated cities
Oi
18 state capitals
26 of 30 most populated cities
Brasil Telecom
12 state capitals
17 of 30 most populated cities
23 state capitals
29 of the 30 most
populated cities
TOTAL
Oi +BRT
Backbone
Embratel
Hispamar
Satellite
+
Venezuela
USA
French
Guiana
Uruguai
Argentina
USA
Africa &
Portugal
+ 4 satellites


9
In terms of mobile network, the acquisition of BrT places Oi
as
the
largest
player
with
national
coverage,
with
current
market share of 17.9% in Brazil and significant growth opportunities
Market
Share
25.8%
25.0%
56.7%
Vivo
+
TIM
+
27.7%
3.2%
30.9%
=
+
13.2%
3.5%
1.2%
17.9%
=
+
Position
as of
december
31, 2007
th


10
Telecom
is
a
scale
business
due
to
rapid
technological
changes
and
its
capital-intensive
nature,
and
consolidations
are
a
natural
trend
Source:
FCC, US Department of Justice, companies, Company analysis
1998
1999
2000
2005
2006
1997
Focus
Local
Local
Local
Local
Local
LD, data
Local
LD, data
Mergers and Acquisitions
Local
Local
Local
LD, data
LD


11
(1) Countries where the four companies work as incumbents; (2) Finland does not have only one incumbent, but the company Telia
Sonera
holds the largest market share in the country.
Source: Ovum, Morgan Stanley, companies, Company analysis
The need for scale has also driven an intense consolidation
movement in the European Market
Germany
Croatia
Hungary
Macedonia
Montenegro
Slovakia
Deutsche
Telekom
Spain
Czech Republic
Italy
Telefónica
France
Poland
France
Telecom
Presence
of
the
European
major
incumbents
Sweden
Finland
Estonia
Lithuania
TeliaSonera
Deutsche
Telekom
Telefónica
France
Telecom
TeliaSonera
2
1


12
In
the
technological
environment,
content
becomes
independent
of
the
distribution
network
via
convergence,
thus
enabling
the
offering
of
integrated packages of services and benefiting the consumer
Original
Scenario
Convergent
Scenario
Fixed/Mobile
telecom
Broadband
Cable TV
Convergent
Network
Service
package
Access limited
to the
subscribers of
a specific
service
Access to all
services on
any device
Voice (Fixed
and Mobile)
Video
Data
Consumer
Service/ 
product
Device
Distribution
Content
Voice (Fixed
and Mobile)
Video
Data
Fixed and
Mobile
ADSL
Cable, DTH
and MMDS
Many
providers for
each user
One-stop-
shop


13
45
122
59
38
40
78
226
The strategy of Oi’s main direct competitors in Brazil also contemplates
growth via consolidation
Spanish Group
Accesses
million
2001
2007
Countries where the
Spanish Group was
present as of 2001
New markets
Spanish Group –
Market Value
EUR billion
2001
2007
Spain
57
154
Mexican Group –
Accesses
million
68
110
31
9
40
178
2001
2007
Mexico
New markets
Mexican Group –
Market Value
MEX billion
2001
2007
143
28
Source: Company site and
Company
analysis


14
13.9
9.0
22.9
The
merger
between
Oi
and
BrT
creates
a
company
that
will
be
the
30
th
largest telecom operator worldwide
1 Market
Values
of
the
operating
companies
(TMAR
and
BRTO)
as
of
03/31/08;
considering USD PTAX of the same day (R$1.7491)
2 Market Values as of 03/31/08
3 Market Value obtained by the simple sum of Oi+BrT
values
Source: Morgan Stanley, companies’
website and Company analysis
Oi and BrT -
Market Value  and Global
Telecom Ranking
US$ billion
Largest telecom operators by Market
Value
Position in Global Ranking
Oi
BrT
39
th
48
th
30
th
Before
After
12.6
PLDT
43
9.0
BrT
48
9.1
Advanced
Info
Service
47
14.4
TELUS Corp
38
9.9
Telekom
Austria
46
11.5
Telekom
Malaysia
45
12.4
Telesp
44
13.6
Portugal Telecom
41
13.9
KT Corp
40
14.6
OTE Hellenic
37
18.2
Turkcell
34
18.8
Swisscom
32
19.9
PT Telekomunikasi
30
24.1
Bouygues
29
26.7
Rogers
Com
27
28.2
China Unicom
26
13.9
Oi
39
13.6
TPSA
42
29.0
BCE Inc.
25
24.1
Chunghwa
28
19.3
China Netcom
31
18.4
Sprint
Nextel
33
16.1
Belgacom
35
15.9
SK Telecom
36
#
Company
(US$ bi)
101.2
Verizon
6
30.5
KDDI
24
32.8
KPN
21
32.9
MTN Group
20
34.1
Telenor
19
37.4
Telmex
17
38.2
Bharti
15
45.8
Singapore
Telecom
13
51.7
Telstra
Corporation
12
67.7
NTT DoCoMo
9
34.6
TeliaSonera
18
31.6
Vimpelcom
22
31.0
Mobile TeleSystems
23
159.4
Vodafone
3
139.4
Telefonica
4
110.7
America Movil
5
97.2
France
Telecom
7
77.1
Deutsche
Telekom
7
62.6
NTT
10
53.6
China Telecom
11
41.9
Telecom Italia
14
37.4
BT Group
plc
16
2
1
#
AT&T
China Mobile
Company
226.0
330.3
(US$ bi)
Oi + BrT
3
1
2


15
In summary, the combination of Oi and BrT is positive to all
stakeholders (society, government, shareholders and resulting
company)
Irrelevant impact
on market concentration;
Creation
of
another
competitor
with
national
coverage;
Significant
efficiencies
in
the
value
chain;
and
The arguments that supported the imposition of legal
impediments to the combination are no longer valid


16
Agenda
16
Restructuring of Telemar Participações
3
Rationale of the Acquisition 
5
Proposed Transaction                 
17


17
Simplified Structure of the Acquisition of Brasil
Telecom
TMAR contracts a Commission Agent to purchase Invitel
Step 1
TMAR acquires Invitel
Step 5
Merger
(“Incorporação”)
of
Invitel
into
Brasil
Telecom
Participações
Step 7
Merger
(“Incorporação”)
of
Brasil
Telecom
Participações
into
Brasil
Telecom
Step 8
Regulatory approval
(ANATEL and CADE)
Brasil
Telecom
share
exchange
(“Incorporação
de
Ações”)
into
TMAR
Step 9
TMAR
makes
a
voluntary
tender
offer
for
1/3
of
the
free-float
of
preferred
shares
of
Brasil
Telecom
Participações
and
Brasil
Telecom: BRTP4 (R$30.47) and BRTO4 (R$23.42)
Step 3
Commission
Agent
transfers
the
“right
to
purchase”
Invitel
share
to
TMAR
Step 4
TMAR releases Material Fact with details of the operation
Step 2
TMAR
makes
the
tag-along
tender
offer
for
common
shares
held
by
Brasil
Telecom
Participações
and
Brasil
Telecom
minority
shareholders: BRTP3 (R$57.85) and BRTO3 (R$54.31)
Step 6


18
Additional information about mergers, voluntary tender offers and
tag-along tender offers
NOTE: BRTP3/4: Brasil Telecom Participações ON/PN; BRTO3/4: Brasil Telecom S.A. ON/PN; TMAR3/5: Telemar Norte Leste ON/PNA; 1) Volume weighted average  share
prices
(VWAP)
for
each
of
the
class
of
shares
on
the
Bovespa,
for
90
days
ending
April
23,
2008.
TMAR3
and
TMAR5
adjusted
by
extraordinary
dividends
of
R$15.5494
and
R$17.1045 respectively
Source: Economática
Average Prices
Exchange Ratios
Step 8
Step 9
Tender Offer Prices
Tag-along tender offer
BRTP3:
R$   57.85
BRTO3:
R$   54.31
BRTP3
1.2200534
BRTO3
0.4137146
TMAR3
BRTP4
0.1729971
BRTO3
0.4137146
TMAR3
0.9106649
BRTO4
0.2530852
TMAR5
Direct
Relations BRP
vs
Oi
(TMAR)
BRTP
BRTO
Oi
(TMAR)
Ratios
Ratios
Voluntary tender offer:
BRTP4:
R$   30.47
BRTO4:
R$   23.42
BRTP3:
R$   48.6234
BRTP4:
R$   22.9818
BRTO3:
R$   39.8535
BRTO4:
R$   17.6654
TMAR3:
R$   96.3309
TMAR5:
R$   69.8002
0.5047539
0.0715714
0.2304758
1


19
Value of the Controlling Price: Market based
The value of BrT control acquisition should be analyzed through the comparison of the price
paid per share with the controlling price implicit in the market
Price paid for the controlling BRTP3 share (ON)
Hypothesis (a): BRTP3 Prices on April 23, 2008
Implicit premium for the controlling shares:
+25% (art. 254-A of Law 6,404
of December 15, 1976) –
80% Tag-along
Implicit price for the controlling BRTP3 shares (R$50.50/0.80)
Premium of the acquisition price as compared to the implicit controlling
BRTP3 shares in the market
Hypothesis (b): 90-day average of BRTP3 prices, ended April 23, 2008
Implicit premium for the controlling BRTP3 shares: +25% (art. 254-A of
Law 6,404 of December 15, 1976) –
80% Tag-along
Implicit price for the controlling BRTP3 shares (R$48.62/0.80)
Premium of the acquisition price as compared to the implicit controlling
BRTP3 shares in the market
R$72.31
R$50.50
R$63.13
+14.5%
R$48.62
R$60.78
+19.0%


20
Evolution of Corporate Structure
Current Situation
Transition Situation     
(ANATEL approval)
Situation after
Acquisitions and Mergers
Telemar Norte
Leste
S.A. (TMAR)
Techold
BRTP
BRTO
BrT GSM
Telemar Norte
Leste
S.A. (TMAR)
BRTO
100%
100%
TmarPart
Telemar Norte
Leste
S.A. (TMAR)
TNLP (TNE)
TNLP (TNE)
TmarPart
TmarPart
TNLP (TNE)
BrT GSM


21
Q & A


22
This presentation contains forward-looking statements.
Statements that are not historical facts, including
statements about our beliefs and expectations,  are
forward-looking statements and involve inherent risks
and uncertainties.
These statements are based on
current plans, estimates and projections, and therefore 
you should not place undue reliance on them.  Forward-
looking statements speak only as of the date they are
made, and we undertake no obligation to update publicly
any of them in light of new information or future events
Rua
Humberto
de
Campos, 425 / 7th floor
Leblon
-
Rio de Janeiro -
RJ
E-mail: invest@oi.net.br
Visit our website:
www.oi.com.br/ir
55 21 3131-1315
Cristiana Ortigão
IR Contacts
55 21 3131-1317
Lívia
Guimarães
55 21 3131-1316
Bernardo Guttmann
55 21 3131-1314
Carolina Gava Silveira
55 21 3131-1211
Roberto Terziani