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 S.A.

(Name of subject company (Issuer))

TELEMAR NORTE LESTE S.A.

a subsidiary of

TELE NORTE LESTE PARTICIPAÇÕES S.A.

(Names of Filing Persons (Offerors))

 

 

 

Preferred Shares, no par value, and American

Depository Shares

   10553M101
(Title of classes of securities)   (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*

  

Amount of Filing Fee*

Not applicable*   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
May 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
The
Restructuring
of
Telemar
Participações
Proposed Transaction: BrTP
Acquisition
Expected Benefits

3
3
The Restructuring of
Telemar
Participações

4
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

5
5
The Proposed Transaction

6
Corporate Structure
Current
Structures
ON: 53.8%
PN: 0.0%
Total: 17.9%
ON: 97.4%
PN: 79.4%
(1)
Total: 87.5%
(1)
ON: 51.6%
PN: 0.0%
Total: 18.9%
ON: 99.1%
PN: 40.6%
Total: 67.3%
(1) Includes preferred shares held directly by TmarPart
100%
100%
TmarPart
TNE
TMAR
Oi
Invitel/
Solpart
BRTP
BRTO
BRT GSM

7
Simplified Structure of the Acquisition of Brasil
Telecom
•
TMAR
acquires
the
control
of
BrTP
Step 6
•
Merger
(“Incorporação”)
of
Invitel
/
Solpart
into
Brasil
Telecom
Participações
(BRT)
Step 8
•
Merger
(“Incorporação”)
of
Brasil
Telecom
Participações
(BRT)
into
Brasil
Telecom
(BTM)
Step 9
•
Brasil
Telecom
(BTM)
share
exchange
(“Incorporação
de
Ações”)
into
TMAR
Step 10
•
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 5
•
TMAR
makes
the
tag-along
tender
offer
for
common
shares
held
by
Brasil
Telecom
Participações
(BRT)
and
Brasil
Telecom
(BTM)
minority shareholders: BRTP3 (R$57.85) and BRTO3 (R$54.31)
Step 7
•
TMAR
contracts
a
Commission
Agent
to
purchase
Invitel
/
Solpart
(BrTP
majority
shareholders)
Step 1
•
TMAR
releases
Material
Fact
with
details
of
the
operation
Step 2
•
Up to September/08 –
Extraordinary dividend payment
Step 4
Regulatory approval (ANATEL and CADE)

8
Corporate Structure
Final Structure
ON:100%
PN: 100%
Total:100%
ON: 88.3%
PN: 46.4%
(1)
Total: 62.2%
(1)
(1) Includes preferred shares held directly by TmarPart
TmarPart
TNE
TMAR
BRTO

9
Voluntary Tender Offers, Mandatory Tender Offers (tag along) and
Mergers
Tender Offers
Prices
Mandatory tender offers:
BRTP3:
R$   57.85
BRTO3:
R$   54.31
Voluntary tender offers :
BRTP4:
R$   30.47
BRTO4:
R$   23.42
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
Exchange Ratios
1 ON share
1.2200534
ON
0.5047539
1 ON share
0.4137146           ON
1 PN share         0.1729971
ON
0.0715714
1 ON share               0.4137146
ON
0.9106649
PN
0.2304758
1 PN share               0.2530852            PN
Direct
Relations
BrTP
vs
Oi
(TMAR)
BrT Part
BrT
Telemar

10
Listing of TMAR at SEC
•
TMAR will be registered with SEC and will establish ADR programs for
ON and PN shares
•
BrTP
ADR Holder’s
will
receive
TMAR
PN
ADRs
and
ON ADRs
•
BrT
ADR Holder’s will receive TMAR PN ADRs

11
Brazilian Mobile Market Share: Dec/07
Market
Share
25.8%
25.0%
56.7%
Vivo
+
TIM
+
27.7%
3.2%
30.9%
=
+
13.2%
3.5%
1.2%
17.9%
=
+

12
0.6
2.2
3.4
4.3
4.6
8.4
1.4
3.9
6.9
10.3
13.1
16.0
17.3
Room to Grow in Mobility
02
03
04
05
06
07
02
03
04
05
06
07
Region I
Market Share (%)
16.5
19.2
22.6
26.0
27.4
26.9
0.0
0.0
3.2
8.7
12.1
13.2
27.9
13.7
Region II
Market Share (%)
1Q08
1Q08
Região II
Região I
1. Amazônia
Celular
not included
Oi
Mobile
–
Customer Base
million
Brasil
Telecom Mobile –
Customer Base
million
•
Market leader
since 2005
•
Pre-paid: SIM Card alone -
without handset subsidies
combined with “Oi
Ligadores
plans”
•
Post-paid: Convergence of
services (Oi
Conta
Total)
•
Region III: Start-up Project
Oi
+ BrT: upside potentials
•
Nationwide coverage
•
Region II: Boost market share
•
Region III : Become a new
player (2G/3G)
•
Brazil: Boost competitiveness
due to the national coverage
•
Achieve national fair market
share -
25%
•
Approximately 38 million
customers in 5 years
Fair
Market
Share
1

13
Domestic Corporate Networks
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
Backbone
Oi
+
BrT

14
14
Expected Benefits

15
The combined operations create value 
Revenues
•
Mobile Operation nationwide
-
Possibility of expansion in national
market-share
•
National coverage in mobile and
data
-
Important item for corporate clients
Synergies
•
Best Practices: room to improve
-
General & Administrative expenses -
reduction
-
Third-party services; improving
relationship and network maintenance
-
TI –
Technology Information
-
Marketing & Publicity
-
Product development
•
Scale:
-
Procurement –
better conditions
-
Overhead -
reduction
-
Capex
–
better conditions
-
Marketing & Publicity -
nationwide
•
Goodwill Usage
-
Lower Income Taxes
•
Taxes:
-
Lower PIS and Cofins
•
Efficient capital structure
-
Investment grade and Ratings
maintained
-
Efficient leverage:
2.0 x EBITDA
-
Tax shield benefits
-
Operational Cash flow: increase
Financial
and
Fiscal
~
~

16
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