Filed by Tele Centro Oeste Participacoes S.A.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Tele Centro Oeste Participacoes S.A.
Commission File No. 001-14489
THE FOLLOWING NOTICE OF MATERIAL EVENT FILED WITH THE BRAZILIAN SECURITIES
AND EXCHANGE COMMISSION RELATING TO THE PROPOSED MERGER OF SHARES (INCORPORACAO
DE ACOES) OF TELE CENTRO OESTE PARTICIPACOES S.A. WITH TELESP CELULAR
PARTICIPACOES S.A.
* * * * *
This notice of material event may contain forward-looking statements
within the meaning of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. These statements are based on management's
current expectations or beliefs and are subject to a number of factors and
uncertainties that could cause actual results to differ materially from those
described in the forwarding-looking statements.
The forward-looking statements in this notice of material event are
subject to a number of risks and uncertainties, including but not limited to
changes in technology, regulation, the global cellular communications
marketplace and local economic conditions. These forward-looking statements
relate to, among other things:
- management strategy;
- synergies;
- operating efficiencies;
- integration of new business units;
- market position;
- revenue growth;
- cost savings;
- capital expenditures;
- flexibility in responding to market conditions and the regulatory regime;
- influence of controlling shareholders;
- litigation; and
- the timetable for the merger of shares.
Forward-looking statements may be identified by words such as "believes,"
"expects," "anticipates," "projects," "intends," "should," "seeks," "estimates,"
"future" or similar expressions.
These statements reflect our current expectations. In light of the many
risks and uncertainties surrounding this marketplace, you should understand that
we cannot assure you that the forward-looking statements contained in this
notice of material event will be realized. You are cautioned not to put undue
reliance on any forward-looking information.
Investors and security holders are urged to read the prospectus regarding
the strategic business combination transaction, which Telesp Celular
Participacoes S.A. has filed with the U.S. Securities and Exchange Commission as
part of its Registration Statement on Form F-4, because it contains important
information. Investors and security holders may obtain a free copy of these
materials and other documents filed by Tele Centro Oeste Participacoes S.A. and
Telesp Celular Participacoes S.A. with the Commission at the Commission's
website at www.sec.gov. These materials may also be obtained for free from Tele
Centro Oeste Participacoes S.A.
* * * * *
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TELESP CELULAR PARTICIPACOES S.A.
a publicly-held company
TELE CENTRO OESTE CELULAR PARTICIPACOES S.A.
a publicly-held company
Telesp Celular Participacoes S.A. ("TCP") and Tele Centro Oeste Celular
Participacoes S.A. ("TCO") by means of the present notice of material event and
in compliance with the decision made by the Governing Board of CVM (Brazilian
Securities and Exchange Commission), disclose the following:
(i) their intention to proceed with the acquisition of the shares of TCO by TCP
("Share Acquisition"), (ii) the criteria and reasons supporting the definition
of the exchange ratio applied to the Share Acquisition (Exchange Ratio) and
(iii) other information related to the corporate restructuring:
1. TCP confirms its intention to effect the Share Acquisition under the terms of
the notice of material event dated January 16, 2003. The Exchange Ratio shall
be, as disclosed previously, 1.27 TCP share for each TCO share.
2. The Exchange Ratio was computed based on the quotes for TCO and TCP shares,
plus a premium on TCO shares' quote (equivalent to 15% above the exchange ratio
computed based on the average price of such shares, for the 30 days prior to the
date on which such Exchange Ratio was disclosed).
3. TCP understands that market quotations are the appropriate criterion for
determining the Exchange Ratio. This understanding is supported by previous
positions held by CVM, such as can be inferred from CVM's Orientation
Opinion Number 1.
4. TCP also understands that the quote for the TCO shares was not distorted
during the period used for the purposes of determining the Exchange Ratio for
the following reasons:
(i) Since the beginning of independent trading on TCO and TCP shares and
during any other representative period used for analysis purposes,
the price of TCO shares increased substantially, more than the price
of TCP shares or than the IBOVESPA index. It should be noted that
any temporary decrease in the price of TCO shares resulting from the
purchase of debentures issued by the former controlling company (the
"Debentures") disclosed as material events on July 5, 2002 and
August 14, 2002, was fully compensated during subsequent periods.
The above statement is proven by the increase in prices of TCO
shares during the periods between the days preceding the two
material events concerning the Debentures and the material event
disclosing the Share Acquisition, which exceeded 50% whereas the
price of TCP shares and the IBOVESPA index were each, for the same
periods, less than a 30%.
(ii) Since the beginning of independent trading of TCO and TCP shares,
the Exchange Ratio has exceeded the most beneficial exchange ratio
of TCO shares for TCP shares, determined based on market quotes.
5. In addition to the criterion and justifications referred above, it should be
noted that under Article 30 of the TCP's bylaws, approval of the Share
Acquisitions must be "preceded by an analysis of economic and financial matters
effected by an independent firm of world renown, confirming that all interested
companies are receiving equitable treatment and the shareholders in such
companies shall be afforded ample access to such the report on such analysis".
As a consequence, the Exchange Ratio, must be based on market quotes, and also
be supported by an analysis prepared by an independent firm of world renown,
which will also include discounted cash flows.
6. Under current legislation, the Share Acquisition shall only be effective
after the closing of the tender offer for common shares issued by TCO, now in
the course of registration with the CVM and, at that time (i) the analysis of
economic and financial matters referred above, (ii) the appraisal reports of
shareholders' equity at market values and (iii) the appraisal report of the book
value of TCO's shareholders' equity will be prepared.
Finally, the Governing Board of CVM has informed the press that its technical
bodies have established "an administrative inquiry to investigate possible
irregularities in connection" with the Share Acquisition. Concerning this
matter, TCP and TCO would like to inform the market that they are entirely
confident that the absence of any
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irregularity in the Share Acquisition will be confirmed. Additional information
that may be necessary to prove such absence of irregularities will be provided
at the appropriate time.
Sao Paulo, August 21, 2003
Telesp Celular Participacoes S.A.
Fernando Abella
Director, Finance and Investor Relations
Tele Centro Oeste Celular Participacoes S.A.
Luis Andre Carpintero Blanco
Director, Finance and Investor Relations