SEC Info℠

Home

Search

My Interests

Help

Sign In

Please Sign In

Portugal Telecom SGPS SA, et al. – ‘SC TO-T/A’ on 9/24/04 re: Tele Leste Celular Participacoes – EX-99.A.1.A

On:  Friday, 9/24/04, at 4:37pm ET   ·   Accession #:  950123-4-11361   ·   File #:  5-79099

Previous ‘SC TO-T’:  ‘SC TO-T/A’ on 9/24/04   ·   Next:  ‘SC TO-T/A’ on 10/12/04   ·   Latest:  ‘SC TO-T/A’ on 10/18/04

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

 Text Wildcards:  ? (any letter/digit),  * (many).  Search Logic:  for Documents:  & (and),  | (or);  for Text:  | (anywhere),  "(&)" (near).  Details... 

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 9/24/04  Portugal Telecom SGPS SA          SC TO-T/A              3:505K Tele Leste Celular Participacoes  RR Donnelley/FA
          Brasilcel NV
          Pt Moveis SGPS SA
          Telefonica Moviles SA

Document/Exhibit                   Description                      Pages   Size 

 1: SC TO-T/A   Amendment No. 3 to Schedule to                      HTML     36K 
 2: EX-99.A.1.A  Ex-99.A.1.A: Offer to Purchase as Amended          HTML    422K 
 3: EX-99.A.1.I  Ex-99.A.1.I: Clarification                         HTML      8K 

Offer to Purchase for Cash

of

TELE LESTE CELULAR PARTICIPAÇÕES S.A.

by

BRASILCEL N.V.

a joint venture of

Portugal Telecom, SGPS, S.A.

Subject to the exceptions and conditions described herein, the tender offer will expire at 11:00 a.m., New York City time, on October 8, 2004, unless the offer is extended or earlier terminated. However, unless the offer is extended or earlier terminated, to participate in the tender offer, you must qualify for the tender offer (1) if a holder of American Depositary Shares, or “ADSs,” participating in the tender offer through The Bank of New York, as receiving agent, no later than 5:00 p.m., New York City time, on October 1, 2004 (such date, as it may be extended by Brasilcel N.V. in its sole discretion, the “ADS Qualification Date”) and (2) if a holder of common shares or preferred shares, no later than 4:00 p.m., New York City time, on October 7, 2004 (such date, as it may be extended by Brasilcel N.V. in its sole discretion, the “Share Qualification Date”). Withdrawals of ADSs by ADS holders who wish to participate in the tender offer through the receiving agent will not be accepted after 5:00 p.m., New York City time, on October 6, 2004, unless the offer is extended or earlier terminated.

      Brasilcel N.V., a corporation organized under the laws of The Netherlands, or “Brasilcel,” a joint venture among Portugal Telecom, SGPS, S.A., PT Móveis, SGPS, S.A. (a wholly owned subsidiary of Portugal Telecom, SGPS, S.A.) and Telefónica Móviles, S.A., hereby invites the shareholders of Tele Leste Celular Participações S.A., a corporation organized under the laws of the Federative Republic of Brazil, or “TLE,” to tender up to 16,723,247,000 common shares (ações ordinárias), no par value, and up to 92,499,407,000 preferred shares (ações preferenciais), no par value, of TLE to Brasilcel for purchase at a price of R$0.90 per 1,000 common shares and R$1.10 per 1,000 preferred shares in cash without interest, net of the stock exchange and settlement fee described herein, any applicable brokerage fees or commissions and applicable withholding taxes, upon the terms and subject to the conditions set forth in this offer to purchase.

      You may tender all or a portion of the common shares and preferred shares of TLE you hold. In the event of over-subscription of the tender offer, shares tendered before the expiration date will be subject to proration as described in this offer to purchase. Upon the terms and subject to the conditions of the tender offer, including the proration provisions, Brasilcel will purchase common shares and preferred shares of TLE, up to the maximum numbers of common shares and preferred shares set forth in the preceding paragraph, that are properly tendered before 11:00 a.m., New York City time, on October 8, 2004 and not properly withdrawn. However, to participate in the tender offer, you must qualify for the tender offer (1) if a holder of ADSs participating in the tender offer through The Bank of New York, as receiving agent, no later than 5:00 p.m., New York City time, on October 1, 2004, which is the ADS Qualification Date, and (2) if a holder of common shares or preferred shares, no later than 4:00 p.m., New York City time, on October 7, 2004, which is the Share Qualification Date, in each case by following the instructions in Section 4 — “Procedures for Accepting the Offer and Tendering Shares.”

      This offering document is intended solely for holders of TLE common shares and preferred shares who are residents of the United States of America and holders of ADSs representing TLE preferred shares. Separate offering materials in Portuguese are being made available simultaneously to holders of shares who are not residents of the United States.

September 1, 2004 (as amended on September 21, 2004)

      Persons that hold American Depositary Shares, or “ADSs,” representing preferred shares of TLE may participate in the tender offer by (1) tendering their ADSs to The Bank of New York, as receiving agent, and instructing the receiving agent to tender the preferred shares underlying those ADSs in the tender offer on their behalf or (2) surrendering their ADSs, withdrawing the underlying preferred shares from the ADS program and participating directly in the tender offer like other holders of preferred shares. See Section 4 — “Procedures for Accepting the Offer and Tendering Shares.” Each ADS represents 50,000 preferred shares of TLE.

      The tender offer is not conditioned on any minimum number of shares being tendered. The tender offer is, however, subject to other conditions. See Section 6 — “Conditions to the Tender Offer.”

      On August 30, 2004, the closing price of TLE common shares on the Bolsa de Valores de São Paulo — BOVESPA, or the “São Paulo Stock Exchange,” was R$0.76 per 1,000 common shares, and the closing price of TLE’s preferred shares was R$0.93 per 1,000 preferred shares. On August 30, 2004, the closing price of the TLE ADSs on the New York Stock Exchange was U.S.$15.70 per ADS. The tender offer offers holders of TLE common shares and preferred shares the opportunity to sell shares at a 20% premium over the volume weighted average prices of shares of that class on the São Paulo Stock Exchange over the 30 trading days up to and including August 24, 2004, the date of announcement of the tender offer.

      You must make your own decision as to whether to tender your shares and, if so, how many shares to tender. None of Brasilcel, TLE, Portugal Telecom, SGPS, S.A., PT Móveis, SGPS, S.A., Telefónica Móviles, S.A., any of their affiliates or any of their respective boards of directors or executive officers makes any recommendation as to whether you should tender your shares. If you are in any doubt as to the action you should take, contact your broker, lawyer, accountant or other professional advisor without delay.

      Questions or requests for assistance may be directed to the contact person set forth on the back cover of this offer to purchase. Additional copies of this offer to purchase may also be obtained from that contact.

TABLE OF CONTENTS

i

SUMMARY TERM SHEET

      This summary term sheet highlights selected information from this offer to purchase and may not contain all of the information that is important to you. To better understand Brasilcel’s offer to you and for a complete description of the legal terms of the tender offer, you should read this entire offer to purchase carefully. Questions or requests for assistance may be directed to the information agent set forth on the back cover of this offer to purchase.

      For your convenience, please find additional detail on the tender offer below in a question and answer format, including additional detail on the procedures for tendering your shares.

1

2

3

4

5

6

7

The Bank of New York

8

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

      Brasilcel has made forward-looking statements in this offer to purchase that are subject to risks and uncertainties. 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 Brasilcel’s current expectations. They 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. In light of the many risks and uncertainties surrounding this marketplace, you should understand that neither Brasilcel nor TLE can assure you that the forward-looking statements contained in this offer to purchase will be realized. You are cautioned not to put undue reliance on any forward-looking information.

9

To the Holders of Common Shares and Preferred Shares of Tele Leste Celular Participações S.A. and American Depositary Shares Representing Preferred Shares of Tele Leste Celular Participações S.A.:

INTRODUCTION

      Brasilcel hereby invites the shareholders of TLE to tender up to 16,723,247,000 common shares (ações ordinárias), no par value, and up to 92,499,407,000 preferred shares (ações preferenciais), no par value, of TLE to Brasilcel for purchase at a price of R$0.90 per 1,000 common shares and R$1.10 per 1,000 preferred shares in cash without interest, net of the fee described in the next paragraph, any applicable brokerage fees or commissions and applicable withholding taxes, upon the terms and subject to the conditions set forth in this offer to purchase.

      Each shareholder that tenders shares in the tender offer and each ADS holder for whom the receiving agent tenders preferred shares underlying ADSs must pay a combined fee to the São Paulo Stock Exchange and CBLC in a percentage equal to 0.035% of the purchase price received by that holder. This fee will be deducted from the proceeds received by that holder.

      A beneficial owner who has preferred shares registered in the name of a broker, dealer, commercial bank or other nominee must contact that entity if that beneficial owner desires to tender shares and may be charged a fee or commission by that person for tendering shares in the tender offer. In addition, the broker that tenders shares on behalf of any shareholder in the auctions described in Section 3 — “Acceptance for Payment and Payment for Shares” will most likely charge a fee or commission for doing so. Each shareholder should consult its broker or nominee to determine what fees or commissions apply. In addition, ADS holders participating in the tender offer by tendering their ADSs to the receiving agent must pay the fees, taxes and charges described in Section 4 — “Procedures for Accepting the Offer and Tendering Shares.”

      The purchase prices per 1,000 common shares and 1,000 preferred shares may be subject to applicable Brazilian withholding taxes. See Section 8 — “Material Tax Consequences — Material Brazilian Tax Consequences.”

      The tender offer is not conditioned on any minimum number of shares being tendered. The tender offer is, however, subject to other conditions. See Section 6 — “Conditions to the Tender Offer.”

      This offer to purchase contains important information that you should read before making any decision about the tender offer.

THE TENDER OFFER

     General

      Upon the terms and subject to the conditions of the tender offer, Brasilcel will purchase up to 16,723,247,000 common shares and up to 92,499,407,000 preferred shares of TLE, or such lesser numbers of shares as are properly tendered before the Expiration Date and not properly withdrawn, at a price of R$0.90 per 1,000 common shares and R$1.10 per 1,000 preferred shares in cash without interest, net of the fee described in the next sentence, any applicable brokerage fees or combined commissions and applicable withholding taxes. Each shareholder that tenders shares in the tender offer and each ADS holder for whom the receiving agent tenders preferred shares underlying ADSs must pay a combined fee to the São Paulo Stock Exchange and CBLC in a percentage equal to 0.035% of the purchase price received by that holder. This fee will be deducted from the proceeds received by that holder.

      The term “Expiration Date” means 11:00 a.m., New York City time, on October 8, 2004, unless and until Brasilcel, in its sole discretion, has extended the period of time during which the tender offer will remain open. On that date, brokers acting on behalf of shareholders that wish to participate in the tender offer will present

10

      ADS holders may participate in the tender offer by tendering their ADSs to The Bank of New York, as receiving agent, in accordance with the instructions set forth below under Section 4 — “Procedures of Accepting the Offer and Tendering Shares” and the accompanying letter of transmittal. For those ADSs tendered through the receiving agent, the receiving agent will tender the underlying preferred shares in the applicable auction described in Section 3 — “Acceptance for Payment and Payment for Shares,” and if the underlying shares are accepted for purchase in the auction, those ADSs will be cancelled. As an alternative to tendering its ADSs to the receiving agent, an ADS holder may also surrender its ADSs, withdraw the underlying preferred shares from the ADS program and participate directly in the tender offer like other holders of preferred shares. See Section 4 — “Procedures for Accepting the Offer and Tendering Shares.”

      The tender offer is not conditioned on any minimum number of shares being tendered. The tender offer is, however, subject to other conditions. See Section 6 — “Conditions to the Tender Offer.”

      Brasilcel will pay the purchase price for up to 16,723,247,000 common shares and up to 92,499,407,000 preferred shares properly tendered before the Expiration Date, and not properly withdrawn, on the third Brazilian business day following the auctions described in Section 3 — “Acceptance for Payment and Payment for Shares.” If the number of common shares or preferred shares properly tendered before the Expiration Date and not properly withdrawn is less than or equal to the applicable number in the preceding sentence, Brasilcel will, upon the terms and subject to the conditions of the tender offer, purchase all the properly tendered shares of that class.

      If, between the date of this offer to purchase and the date of the auctions described in Section 3 — “Acceptance for Payment and Payment for Shares,” there occurs any change in the number of shares into which TLE’s share capital is divided due to share dividends, share splits, reverse share splits or conversions, the maximum number of shares of each class to be purchased in the tender offer will be automatically adjusted in the same proportion. If such an event occurs, the São Paulo Stock Exchange will announce through its information system the new maximum number of shares of that class to be purchased in the tender offer.

     Proration

      In the event of over-subscription of the tender offer, shares tendered before the Expiration Date will be subject to proration. The proration period expires at the time of the applicable auction on the Expiration Date. If the number of common shares or preferred shares properly tendered and not properly withdrawn is greater than the maximum number of shares of that class that Brasilcel intends to purchase, as described in the preceding paragraph, Brasilcel will purchase shares of each class on a pro rata basis. If proration of tendered shares is required, the São Paulo Stock Exchange will determine the proration factor at the time of the auctions described in Section 3 — “Acceptance for Payment and Payment for Shares.” Subject to adjustment to avoid the purchase of fractional shares, proration for each shareholder that tenders shares will be based on the ratio of the total number of shares of that class that Brasilcel accepts for purchase to the total number of shares of that class properly tendered and not properly withdrawn by all shareholders.

      The receiving agent will, in turn, apply the proration factor to ADSs that have been properly tendered to the receiving agent before the ADS Qualification Date and not withdrawn. In applying the proration factor,

11

     Appraisal rights

      No appraisal rights for holders of TLE’s common shares or preferred shares, or ADSs representing TLE’s preferred shares, are available in connection with the tender offer.

      To the extent permitted by applicable Brazilian and U.S. securities laws and the terms of the tender offer, Brasilcel reserves the right, at any time and from time to time, in its sole discretion, (1) to extend the period of time during which the tender offer is open and thereby delay acceptance for payment of and payment for tendered shares, (2) to amend the tender offer in any respect and (3) to terminate the tender offer without purchasing any shares. In order to comply with the requirements of the U.S. Securities Exchange Act of 1934, as amended, or the “Exchange Act,” and the regulations thereunder, any such extension, delay, termination, waiver or amendment will be followed as promptly as practicable by public announcement thereof, such announcement in the case of an extension to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Share Qualification Date. Subject to applicable law (including Rule 14e-1 under the Exchange Act, which requires that material changes be promptly disseminated to shareholders in a manner reasonably designed to inform them of such changes) and without limiting the manner in which Brasilcel may choose to make any public announcement, Brasilcel will have no obligation to publish, advertise or otherwise communicate any such public announcement in the United States other than by issuing a press release to the Dow Jones News Service, the Public Relations Newswire or Business Wire.

      If Brasilcel makes a material change in the terms of the tender offer or the information concerning the tender offer, Brasilcel will extend the tender offer to the extent required by Rule 14e-1 under the Exchange Act and to the extent permitted under applicable Brazilian laws and regulations. If Brasilcel decides to increase the consideration being offered in the tender offer for the common shares or the preferred shares, the increase in the consideration being offered will be applicable to all shareholders of that class whose shares are accepted for payment under the tender offer. Furthermore, if at the time notice of any such increase in the consideration being offered is first published, sent or given to holders of those shares, the tender offer is scheduled to expire at any time earlier than the period ending on the tenth business day from and including the date that such notice is first so published, sent or given, the tender offer will be extended at least until the expiration of that ten-business-day period to the extend permitted under applicable Brazilian laws and regulations. Brasilcel does not expect to increase the amount of consideration currently available through this tender offer.

      To the knowledge of Brasilcel and TLE, no director, executive officer or affiliate of TLE intends to tender common or preferred shares in the tender offer.

      This offer to purchase will be mailed by Brasilcel to any record holder of common shares or preferred shares of TLE resident in the United States, and any registered or beneficial holder of ADSs who requests a copy of this offer to purchase. Any U.S. resident broker, dealer, commercial bank, trust company and similar person whose name, or the name of whose nominee, appears on the shareholder lists of CBLC or Banco ABN Amro Real or who is listed as a participant in the security position listing of The Depository Trust Company, as the clearing agency for ADSs of TLE, may request additional copies of this offer to purchase for subsequent transmittal to beneficial owners of common shares, preferred shares or ADSs. Brokers, dealers, commercial banks and trust companies will be reimbursed by Brasilcel for customary handling and mailing expenses incurred by them in forwarding material to their customers.

12

      For purposes of this offer to purchase:

      Brasilcel is undertaking this tender offer to increase its ownership of the common shares and preferred shares of TLE, of which it is the controlling shareholder. Brasilcel and its affiliates currently own 98,087,171,296 common shares of TLE, or 58.7% of TLE’s common shares, and 35,823,856,625 preferred shares of TLE, or 11.4% of TLE’s preferred shares. If the tender offer is successful and Brasilcel purchases 16,723,247,000 common shares and 92,499,407,000 preferred shares, Brasilcel will own 114,810,418,296 common shares of TLE, or 68.7% of TLE’s common shares, and 128,323,263,625 preferred shares of TLE, or 40.9% of TLE’s preferred shares.

      Brasilcel believes that the tender offer also provides an efficient means to provide value to shareholders of TLE. The tender offer allows those TLE shareholders desiring to receive cash for their shares the opportunity to do so. The tender offer offers holders of TLE common shares and preferred shares the opportunity to sell shares at a 20% premium over the volume weighted average prices of shares of that class on the São Paulo Stock Exchange over the 30 trading days up to and including August 24, 2004, the date of announcement of the tender offer. The volume weighted average price is calculated by multiplying the average share price for each day during the period by the volume traded on that day and dividing the product by the total volume traded over the 30 trading-day period.

      None of Brasilcel, TLE, Portugal Telecom, PT Móveis, SGPS, S.A., Telefónica Móviles, any of their affiliates or any of their respective boards of directors or executive officers makes any recommendation as to whether holders should tender their shares. None of these persons has authorized any person to make any recommendation on its behalf as to whether a holder should tender or refrain from tendering its shares in the tender offer. If you are in doubt as to the action you should take, contact your broker, lawyer, accountant or other professional advisor without delay.

      In particular, TLE, its board of directors and executive officers are not making a recommendation regarding the tender offer and are expressing no opinion of, and are remaining neutral toward the tender offer because (1) the tender offer is being made by the controlling shareholder of TLE and (2) the tender offer is a cash offer for only a portion of the common shares and preferred shares of TLE and TLE, its board of directors and its executive officers therefore believe that each investor should make its own decision as to the consideration being offered in the tender offer and whether to tender or refrain from tendering shares.

      Concurrently with this tender offer, Brasilcel has commenced tender offers for a portion of the common shares and preferred shares of its subsidiaries Tele Sudeste Celular Participações S.A. and Celular CRT Participações S.A. in order to increase its ownership of those classes of shares.

      The common shares and preferred shares purchased in the tender offer will be purchased through separate auctions on the São Paulo Stock Exchange. Both auctions are currently scheduled to occur after 2:05 p.m., New York City time, on October 8, 2004. Brokers acting on behalf of shareholders that wish to tender their shares must present sales orders on behalf of tendering shareholders by 11:00 a.m., New York City time, on October 8, 2004, which is the Expiration Date, through the São Paulo Stock Exchange’s Mega

13

      Sales orders from brokers tendering common shares and preferred shares on behalf of tendering shareholders, including the broker selected by the receiving agent to tender preferred shares underlying ADSs on behalf of ADS holders participating in the tender offer must be submitted no later than 11:00 a.m., New York City time, on October 8, 2004, which is the Expiration Date. Sale orders for tendered shares that have not been withdrawn before the beginning of the applicable auction on the Expiration Date will be deemed accepted, subject to the proration provisions described in Section 1 — “Terms of the Tender Offer; Expiration Date and Qualification Dates,” and may not be withdrawn once the auction begins. All common shares and preferred shares purchased by Brasilcel in the tender offer will be acquired through buy orders at the prices set forth in this offer to purchase presented by BES Securities do Brasil, S.A. C.C.V.M., as broker for Brasilcel. BES Securities do Brasil, S.A. C.C.V.M. guarantees the settlement of the tender offer, except with respect to a competing offer from another offeror, as described below. BES Securities do Brasil, S.A. C.C.V.M. is controlled indirectly by a shareholder that holds 9.75% of the common shares of Portugal Telecom.

      Under Article 13 of Instruction No. 361, dated March 5, 2002, of the Brazilian Securities Commission, a third party is permitted to commence a competing tender offer for all or a portion of the shares of either class subject to this tender offer, so long as the competing offeror offers a price at least five percent greater than the price for that class offered in this offer to purchase and complies with other provisions of applicable Brazilian law, including the publication of offering materials in Brazil. In such an event, the auctions may be postponed or shareholders may be required to take such additional actions to participate in the tender offer as may be announced by Brasilcel. In the event of such a competing tender offer,

      Brasilcel may, in its sole discretion, but subject to Brazilian law and regulations and the Exchange Act and the rules and regulations thereunder (including without limitation, the requirement under Rule 14e-1 that Brasilcel extend the tender offer if it increases the consideration offered), submit a higher counteroffer for the shares sought by the competing offeror. In the event that the date of the auctions is extended or Brasilcel otherwise modifies the terms of the tender offer, Brasilcel will make an announcement of that fact in the manner described in Section 1 — “Terms of the Tender Offer; Expiration Date and Qualification Date.”

      Brasilcel reserves the right to transfer or assign, in whole at any time or in part from time to time, to one or more of its affiliates, the right to purchase common shares or preferred shares in the tender offer, but any such transfer or assignment will not relieve Brasilcel of its obligations under this offer to purchase or prejudice the rights of tendering holders to receive payments for shares validly tendered and accepted for payment pursuant to the offer to purchase.

      Brasilcel will pay for shares accepted in the tender offer promptly after the Expiration Date on the third Brazilian business day following the auction, in accordance with the rules established by CBLC for net settlement. Under no circumstances will interest on the purchase price be paid by Brasilcel regardless of any delay in making that payment.

      To tender common shares or preferred shares in the tender offer, including preferred shares underlying ADSs, a shareholder or ADS holder must qualify for the tender offer no later than the dates indicated below. The steps the shareholder or ADS holder must follow in order to qualify differ according to whether it holds ADSs representing TLE preferred shares or whether it holders common shares or preferred shares directly in Brazil.

      If a holder of ADSs wishes to participate in the tender offer, the holder may tender its ADSs to The Bank of New York, as receiving agent, no later than 5:00 p.m., New York City time, on October 1, 2004, which is the ADS Qualification Date, in accordance with the instructions set forth below and in the accompanying

14

      Any holder of ADSs that wishes to tender ADSs to the receiving agent must, no later than the ADS Qualification Date, either:

Delivery of documents to the Book-Entry Transfer Facility will not constitute delivery to the receiving agent.

      The letter of transmittal accompanying this offer to purchase is to be completed by ADS holders if ADRs are to be forwarded therewith. An agent’s message must be used if delivery of ADSs is to be made by book-entry transfer to an account maintained by the receiving agent at the Book-Entry Transfer Facility pursuant to the procedures for book-entry transfer. ADRs evidencing ADSs or confirmation of any book-entry transfer into the receiving agent’s account at the Book-Entry Transfer Facility of ADSs delivered electronically, as well as a properly completed and duly executed letter of transmittal (or an originally signed facsimile thereof) with any required signature guarantees or, in the case of a book-entry transfer, an agent’s message and any other documents required by the letter of transmittal, must be delivered to the receiving agent at one of its addresses set forth in the letter of transmittal prior to the ADS Qualification Date. If ADSs are forwarded to the receiving agent in multiple deliveries, a properly completed and duly executed letter of transmittal (or an originally signed facsimile thereof) must accompany each such delivery.

      Except as otherwise provided below, all signatures on the letter of transmittal must be guaranteed by a financial institution (including most banks, savings and loan associations and brokerage houses) that is a participant in the Securities Transfer Agents Medallion Program (STAMP), the New York Stock Exchange Medallion Program (MSP), or the Stock Exchanges Medallion Program (SEMP) or any other “eligible guarantor institution” (as defined in Rule 17Ad-15 under the Exchange Act, which are referred to collectively as “Eligible Institutions.” Signatures on the letter of transmittal need not be guaranteed (1) if the letter of transmittal is signed by the registered holder of the ADSs tendered therewith and that holder has not completed either Box 2: “Special Issuance Instructions” or Box 3: “Special Delivery Instructions” on the letter of transmittal or (2) if those ADSs are tendered for the account of an Eligible Institution.

      The term “agent’s message” means a message transmitted by means of the Book-Entry Transfer Facility to, and received by, the receiving agent and forming a part of a book-entry confirmation which states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the system of the Book-Entry Facility tendering ADSs that are the subject of such book-entry confirmation that such participant has received and agrees to be bound by the terms of the letter of transmittal and that the purchaser may enforce such agreement against the participant.

      The method of delivery of ADRs and all other required documents is at the sole option and risk of the tendering holders of ADSs. ADRs will be deemed delivered only when actually received by the receiving agent. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

15

      No alternative, conditional or contingent tenders will be accepted, and no number of underlying preferred shares that would represent a fractional ADSs will be purchased. By executing the letter of transmittal, all tendering ADS holders waive any right to receive any notice of the acceptance of their ADSs for payment.

      All letters of transmittal, ADRs evidencing ADSs and other required documents delivered to the receiving agent by holders of ADSs will be deemed, without any further action by the receiving agent, to constitute acceptance by such holders of the tender offer with respect to the preferred shares represented by those ADSs, upon the terms and subject to the conditions set forth in this offer to purchase and the accompanying letter of transmittal.

      After acceptance by Brasilcel of the preferred shares underlying the ADSs tendered to the receiving agent (subject to any pro rata reduction of the shares purchased as described in this offer to purchase) and receipt of payment of the consideration for those shares, the receiving agent will pay to the applicable holders of ADSs the U.S. dollar equivalent (based on then prevailing exchange rates, net of expenses for converting reais to U.S. dollars) of R$1.10 per preferred shares, or R$55.00 per ADS, minus (1) a fee of U.S.$5.00 per 100 ADSs or portion thereof for the cancellation of the ADSs representing preferred shares purchased in the tender offer, (2) the combined fee of 0.035% of the purchase price payable to the São Paulo Stock Exchange and CBLC, as described in Section 1 — “Terms of the Tender Offer; Expiration Date and Qualification Dates,” and (3) the holder’s pro rata portion of the fee or commission charged by the broker selected by the receiving agent to tender preferred shares underlying ADSs on behalf of ADS holders participating in the tender offer. The ADS cancellation fee is payable to The Bank of New York, as depositary under the deposit agreement governing the TLE ADS program. In addition, any ADS holder that wishes to tender ADSs in the tender offer must pay any taxes or governmental charges payable in connection with the cancellation of ADSs representing preferred shares purchased in the tender offer. ADS holders for which preferred shares underlying those ADSs are purchased in the tender offer will receive the purchase price for the preferred shares purchased in the tender offer underlying the ADSs they tendered in cash by check or, in the case of ADSs held through the Book-Entry Transfer Facility, by means of delivery of funds to the account maintained at the Book-Entry Transfer Facility by the participant that has tendered the ADSs.

      If an ADS holder tenders ADSs but the underlying preferred shares are not accepted for payment for any reason (including, without limitation, any pro rata reduction of preferred shares accepted in the tender offer as described in Section 1 — “Terms of the Tender Offer; Expiration Date and Qualification Dates”), ADRs evidencing those ADSs will be returned promptly after the expiration or termination of the tender offer or the proper withdrawal of the ADSs, as applicable, or, in the case of ADSs transferred through the Book-Entry Transfer Facility, the unpurchased ADSs will be credited to the account at the Book-Entry Transfer Facility from which they were tendered as soon as practicable after the expiration or termination of the tender offer or the proper withdrawal of the ADSs, as applicable.

      A tender of ADSs to the receiving agent can be made only by the holder of record of the ADSs. Any beneficial owner of ADSs that wishes to participate in the tender offer must instruct the broker, dealer, commercial bank, trust company or other nominee that is the record holder of those ADSs to tender the ADSs by completing, executing, detaching and returning to that broker, dealer, commercial bank, trust company or other nominee the accompanying instruction form. If a beneficial owner authorizes the tender of its ADSs, all those ADSs will be tendered unless otherwise specified in the instruction form. The instruction form must be forwarded to that broker, dealer, commercial bank, trust company or other nominee in ample time to permit that nominee to submit a tender of ADSs to the receiving agent on the beneficial owner’s behalf before the ADS Qualification Date.

      If an ADS holder desires to tender ADSs pursuant to the offer and cannot deliver those ADSs and all other required documents to the receiving agent by the ADS Qualification Date or that holder cannot complete the procedure for delivery by book-entry on a timely basis, those ADSs may nevertheless be tendered if all of the following conditions are met:

16

      The Notice of Guaranteed Delivery may be delivered by hand or transmitted by telegram, facsimile transmission or mail to the receiving agent and must include a guarantee by an Eligible Institution in the form set forth in that Notice.

      As an alternative to tendering its ADSs to the receiving agent, an ADS holder may also surrender its ADSs, withdraw the underlying preferred shares from the ADS program and participate directly in the tender offer like other holders of preferred shares. If a holder of ADSs wishes to participate directly in the tender offer in this manner, that ADS holder must first:

      If an ADS holder surrenders ADSs and receives the underlying preferred shares, the preferred shares so received will be registered at CBLC, and the holder will need to obtain its own foreign investor registration under Resolution No. 2,689/00 of the National Monetary Council. See Section 14 — “Certain Legal and Regulatory Matters — Registering Under Resolution No. 2,689/00” for more information on obtaining a foreign investor registration.

      After the holder appoints a Brazilian representative for purposes of Resolution No. 2,689/00, the holder must make arrangements for that representative to tender the preferred shares on its behalf in the same manner as any other direct holder of shares whose shares are registered at CBLC. The Brazilian representative must follow all the steps set forth below under “— Direct Holders of Common Shares or Preferred Shares.” The holder will need to take these steps in sufficient time to allow its Brazilian representative to qualify for the tender offer on its behalf no later than the Share Qualification Date in the manner described in “— Direct Holders of Common Shares or Preferred Shares.”

      Tendering the preferred shares underlying the ADSs and participating directly in the tender offer allows holders to benefit from withdrawal rights as to the tender offer until the beginning of the applicable auction on the Expiration Date, as described in Section 5 – “Withdrawal Rights.” However, withdrawal of the preferred shares underlying the ADSs from the ADS program requires payment of the ADS cancellation fee described above to the depositary without any assurance that the preferred shares withdrawn from the ADS program will not be subject to proration. In addition, upon the redeposit of preferred shares into TLE’s ADS program, an additional fee of up to U.S.$5.00 per 100 ADSs or portion thereof will be payable to the depositary.

17

      Questions by an ADS holder regarding procedures and requirements for tendering ADSs in the tender offer may be directed to:

The Bank of New York

      A holder of common shares or preferred shares must, no later than 4:00 p.m., New York City time, on October 7, 2004, which is the Share Qualification Date, either personally or by means of a duly appointed proxy, contact any broker authorized to conduct trades on the São Paulo Stock Exchange, present the documentation listed below and ask the broker to tender its shares in the auction on its behalf. To tender a holder’s shares, the holder’s broker must, no later than 11:00 a.m., New York City time, on the Expiration Date, (1) transfer the shares to Account No. 7105-6 at CBLC, which is an account opened in the name of every shareholder and maintained at CBLC for the purpose of the tender offer and (2) present a sale order on behalf of the holder through the São Paulo Stock Exchange’s Mega Bolsa electronic trading system using the codes set forth in Section 3 — “Acceptance for Payment and Payment for Shares.” Shareholders must pay any fee or commission charged by their broker.

      Common shares or preferred shares held directly in Brazil are generally held either through CBLC or through Banco ABN Amro Real, TLE’s transfer agent. CBLC is the custodian for common shares and preferred shares of TLE that are traded on the São Paulo Stock Exchange, and settlement of the tender offer will occur through the facilities of CBLC. Shareholders that have invested in TLE shares under Resolution No. 2,689/00 of the National Monetary Council, for example, hold their shares through CBLC. These shareholders should ask their Brazilian representatives for purposes of Resolution No. 2,689/00 to contact such a broker on their behalf.

      Holders of common shares or preferred shares through Banco ABN Amro Real should ask the broker they contact to request the transfer of their shares to the custody of CBLC in order to enable the broker to tender the shares on their behalf. Before it will accept an order to transfer shares to a broker, Banco ABN Amro Real will generally check the personal information for that holder in its records against the personal information the holder has provided to the broker through the documentation listed below to make sure they are the same. If there are inconsistencies between the records, Banco ABN Amro Real will not transfer the shares. It is the responsibility of any shareholder through Banco ABN Amro Real to ensure that the information it provides to its broker is consistent with that in Banco ABN Amro Real’s records. It is also the shareholder’s responsibility to contact a broker sufficiently in advance of the Share Qualification Date to ensure that Banco ABN Amro Real can transfer the shareholder’s shares to the custody of CBLC for deposit in the account specified above before the Share Qualification Date.

      Any holder that does not know whether it holds its shares through CBLC or Banco ABN Amro Real S.A. should ask its custodian, representative, broker or other nominee. In addition, any holder that has invested directly in common shares or preferred shares in Brazil other than through Resolution 2,689/00 of the National Monetary Council should consult its custodian, representative, broker, lawyer or other professional advisor without delay regarding the steps it would need to follow in order to participate in the tender offer. Such a holder may need to change the form of its investment under applicable Brazilian laws and regulations to participate in the tender offer, and Brasilcel cannot guarantee whether the holder would be able to make that change in time to participate in the tender offer.

      Shares deposited in the CBLC account specified above may not be traded until the date of settlement of the tender offer, which is three Brazilian business days after the Expiration Date. If the shareholder wishes to

18

      In order to qualify for the tender offer, shareholders must present the following documents and any additional information or documents that may be requested by Brasilcel, CBLC, Banco ABN Amro Real or their broker:

      Representatives of estates, minors, incapacitated persons and proxies must also present:

      Questions or requests for assistance may be directed to the information agents set forth on the back cover of this offer to purchase. Additional copies of this offer to purchase may also be obtained from that contact person.

      All questions as to the form of documents and the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of common shares or preferred shares will be determined by Brasilcel in its sole discretion, which determination shall be final and binding on all parties. Brasilcel reserves the absolute right to reject any and all tenders determined by it not to be in proper form. Brasilcel also reserves the absolute right to waive any defect or irregularity in the tender of any shares of any particular shareholder, whether or not similar defects or irregularities are waived in the case of other shareholders. No tender of shares will be deemed to have been validly made until all defects and irregularities have been cured or waived. Neither Brasilcel nor any of its affiliates or assigns or other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. Brasilcel’s interpretation of the terms of the tender offer will be final and binding.

      The tender of shares pursuant to any of the procedures described above will constitute the tendering shareholder’s acceptance of the terms of the tender offer, as well as the tendering shareholder’s representation and warranty to Brasilcel that:

19

5. Withdrawal Rights.

      Shareholders or ADS holders that have qualified for the tender offer may withdraw from the tender offer, but they may do so only as described in this section. For a withdrawal to be effective, the broker who has been instructed to tender shares in the auctions described in Section 3 — “Acceptance for Payment and Payment for Shares,” including the broker selected by the receiving agent to tender preferred shares underlying ADSs, must withdraw the order to sell those shares before the beginning of the applicable auction on the Expiration Date. If a shareholder wishes to withdraw the tender of its shares, it is the responsibility of the shareholder to ensure that the broker who has been instructed to tender its shares receives instructions to withdraw the tender of those shares before that time. In order to allow the broker selected by the receiving agent to withdraw those shares underlying ADSs held by ADS holders who wish to withdraw, a written notice of withdrawal from any ADS holder participating in the tender offer through the receiving agent must be received by the receiving agent no later than 5:00 p.m., New York City time, on October 6, 2004. In order to withdraw from the tender offer, shareholders and ADS holders should follow the instructions below.

      If an ADS holder is participating in the tender offer by tendering its ADSs to the receiving agent, its originally signed written notice of withdrawal must be received by the receiving agent no later than 5:00 p.m., New York City time, on October 6, 2004 at the address below or, in the case of Eligible Institutions, at the facsimile number below.

By Facsimile Transmission (for Eligible Institutions Only):

      Any such notice of withdrawal must:

      If an ADS holder withdraws ADSs from the tender offer, the ADRs evidencing those ADSs will be returned promptly after the proper withdrawal of the ADSs or, in the case of ADSs transferred through the Book-Entry Transfer Facility, the properly withdrawn ADSs will be credited promptly into the receiving agent’s account at the Book-Entry Transfer Facility pursuant to book-entry transfer procedures and such ADSs will be credited promptly to an account maintained with the Book-Entry Transfer Facility for the ADSs after the proper withdrawal of the ADSs. Properly withdrawn ADSs may be retendered by following the

20

      Please note that any ADS holder that wishes to preserve its effective right to withdraw up until the beginning of the applicable auction on the Expiration Date must surrender its ADSs, withdraw the underlying preferred shares from the ADS program and participate directly in the tender offer like other holders of preferred shares. See Section 4 — “Procedures for Accepting the Offer and Tendering Shares — Holders of ADSs — Direct Participation in the Tender Offer.”

      If a shareholder directly holds common shares or preferred shares, the shareholder or its representative in Brazil must contact the broker that it has instructed to tender shares on its behalf in sufficient time to enable the broker to withdraw the order to sell those shares before the beginning of the applicable auction on the Expiration Date and must provide any documentation required by the broker. Shareholders who wish to withdraw from the tender offer are strongly advised to contact their brokers well before the beginning of the applicable auction.

      In addition, in accordance with Section 14(d)(5) of the Exchange Act, shareholders that have tendered shares may withdraw those shares at any time after October 30, 2004 if the auctions have not occurred before that date by communicating their request to withdraw their shares in the manner described above.

      Even if Brasilcel extends the tender offer, is delayed in accepting shares for payment pursuant to the tender offer for any reason or is unable to accept shares for payment pursuant to the tender offer for any reason, elections to tender may be withdrawn only as described in this section, subject to Rule 14e-1(c) under the Exchange Act. Any such delay will be by an extension of the tender offer to the extent required by law. See Section 1 — “Terms of the Offer; Expiration Date and Qualification Dates.”

      All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by Brasilcel, in its sole discretion, whose determination will be final and binding. Neither Brasilcel nor any other person will be under any duty to give any notification of any defects or irregularities in any withdrawal or incur any liability for failure to give any such notification.

      Withdrawals of tendered shares may not be rescinded. Any shares properly withdrawn will thereafter be deemed not to have been validly tendered for purposes of the tender offer. However, holders of common shares and preferred shares that have properly withdrawn tendered shares may re-qualify those shares for the tender offer at any time before the Share Qualification Date by following the procedures described in Section 4 — “Procedures for Accepting the Offer and Tendering Shares.” ADS holders that have properly withdrawn their ADSs from the tender offer may retender those ADSs to the receiving agent at any time before the ADS Qualification Date by following the procedures described in that section.

      Notwithstanding any other provisions of this offer to purchase and in addition to any rights Brasilcel may have to terminate or modify the terms of the tender offer set forth in the last paragraph of this section, Brasilcel will not be required to accept for payment or pay for any TLE common shares or preferred shares, subject to the rules under the Exchange Act and applicable Brazilian laws and regulations, if, at any time on or

21

22

      This tender offer is not subject to any conditions other than those specified above.

      Brasilcel is entitled to waive on or more of these conditions, in whole or in part, at any time and from time to time until 8:00 a.m., New York City time, on the Expiration Date, to the extent permitted by law. If any of the conditions is triggered, Brasilcel will publish a Notice of Material Fact clarifying whether it will continue the tender offer (if Brasilcel waives the condition) or whether the tender offer will have no more effect.

      In addition, under Brazilian law, Brasilcel is permitted to terminate or modify the terms of the tender offer if a substantial and unforeseeable change in the facts and circumstances existing on the date of this offer to purchase has occurred that materially increases the risks assumed by Brasilcel in connection with the tender offer. If such an event occurs, Brasilcel will issue a Notice of Material Fact clarifying whether the tender offer is to continue, and on what conditions, or whether the tender offer will have no more effect.

      The total amount of funds required by Brasilcel to purchase the maximum number of common shares and preferred shares subject to the tender offer, before fees and expenses, is estimated to be approximately R$117 million. The total amount of funds required by Brasilcel to purchase the maximum number of common shares and preferred shares subject to the tender offers relating to TLE, Tele Sudeste Celular Participações S.A. and Celular CRT Participações S.A., before fees and expenses, is estimated to be approximately R$615 million. Brasilcel intends to pay this amount from funds obtained from intercompany loans from its controlling shareholders Telefónica Móviles and Portugal Telecom but has not yet signed a loan agreement with these shareholders. Telefónica Móviles intends to obtain its portion of the funds to be provided to Brasilcel from borrowings from its subsidiary Telefónica Móviles España, S.A., or “TME.” Under a line of credit agreement, dated June 28, 2004, TME has granted Telefónica Móviles a line of credit in the maximum amount € 2.0 billion. Under the agreement, Telefónica Móviles may draw down on the line of credit one or more times until June 30, 2005, and amounts borrowed under the line of credit mature on June 30, 2011. Amounts drawn under the line of credit bear interest at the three-month EURIBOR rate plus 0.58% per annum, payable every three months unless TME elects to capitalize the interest for any three-month period. The agreement is unsecured and is not subject to conditions. Telefónica Móviles believes it will have sufficient availability under this agreement to obtain the funds necessary for the tender offer. A copy of the loan agreement is filed as an exhibit to the Schedule TO to which this offer to purchase is also an exhibit. TME, in turn, will obtain the funds provided to Telefónica Móviles from cash on hand. Portugal Telecom intends to obtain its portion of the funds to be provided to Brasilcel from cash on hand. There are no conditions to any of the loans described above, and there are currently no alternative financing arrangements or plans in the event these loans are not funded. There are no current plans or arrangements to refinance these loans. The tender offer is not conditioned upon the receipt of financing by any party.

      The following summary describes the material U.S. federal income tax consequences of the tender offer for common shares and preferred shares of TLE. The discussion set forth below is only applicable to U.S. Holders (as defined below) who tender common shares or preferred shares of TLE (including preferred

23

      If a partnership holds common shares or preferred shares of TLE, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If a U.S. Holder is a partner of a partnership holding such common shares or preferred shares, the holder is urged to consult its tax advisors regarding the tax consequences of the tender offer.

      As used in this subsection “— Material United States Federal Income Tax Consequences,” the term “U.S. Holder” means a beneficial holder of common shares or preferred shares of TLE that is (i) an individual citizen or resident of the United States, (ii) a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source or (iv) a trust (X) that is subject to the supervision of a court within the United States and the control of one or more United States persons as described in Section 7701(a)(30) of the Code or (Y) that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.

      The receipt of cash in exchange for common shares or preferred shares of TLE pursuant to the tender offer will be a taxable transaction for U.S. federal income tax purposes. A U.S. Holder of common shares or preferred shares of TLE will generally recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the amount of cash received and the U.S. Holder’s tax basis in the common shares or preferred shares exchanged. Gain or loss must be calculated separately for each block of common shares or preferred shares exchanged by the U.S. Holder. Subject to the discussion under “— Passive Foreign Investment Company Rules,” such gain or loss generally will be capital gain or loss. Capital gains of individuals derived with respect to capital assets held for more than one year at the time the common shares or preferred shares are exchanged are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations.

      The amount of any cash paid in reais will equal the U.S. dollar value of the reais received, calculated by reference to the exchange rate in effect on the date the cash is received by the U.S. Holder, regardless of whether the reais are converted into U.S. dollars. If the reais received are not converted into U.S. dollars on the date of receipt, a U.S. Holder will have a basis in the reais equal to its U.S. dollar value on the date of receipt. Any gain or loss realized on a subsequent conversion or other disposition of the reais will be treated as ordinary income or loss.

      If a U.S. Holder tenders common shares or preferred shares that qualify as “Section 306 stock” as defined in Section 306 of the Code, such holder’s tax consequences may be different than those described above. Such holders should consult their own tax advisors with respect to their common shares or preferred shares of TLE and the application of the rules thereto under Section 306 of the Code.

24

      Based on the projected composition of its income and valuation of its assets, including goodwill, Brasilcel does not believe that TLE will be in the current year, or has been in 1998 or any subsequent taxable year, a passive foreign investment company (“PFIC”), although there can be no assurance in this regard. PFIC status, moreover, is a factual determination that is made annually. Accordingly, it is possible that TLE may have been a PFIC in prior taxable years or may become a PFIC in the current taxable year due to changes in valuation or composition of its income or assets. If TLE is or was a PFIC, U.S. Holders could be subject to certain adverse U.S. federal income tax consequences as more fully described below.

      In general, a company is considered a PFIC for any taxable year if either (i) at least 75% of its gross income is passive income, or (ii) at least 50% of the value of its assets is attributable to assets that produce or are held for the production of passive income.

      The asset test is based on the average of the value of TLE’s assets for each quarter during the taxable year. If TLE owns at least 25% by value of another company’s stock, it will be treated, for purposes of the PFIC rules, as owning its proportionate share of the assets and receiving its proportionate share of the income of that company.

      In determining that Brasilcel does not believe that TLE is a PFIC in the current year, Brasilcel is relying on TLE’s projected capital expenditure plans and projected revenue for the current year. In addition, Brasilcel’s determination is based on a current valuation of TLE’s assets, including goodwill. In calculating goodwill, Brasilcel has valued TLE’s total assets based on TLE’s total market value, which, in turn, is based on the market value of TLE’s shares and is subject to change. In addition, Brasilcel has made a number of assumptions regarding the amount of this value allocable to goodwill. Brasilcel believes its valuation approach is reasonable. However, it is possible that the U.S. Internal Revenue Service, or “IRS,” may challenge the valuation of TLE’s goodwill, which may also result in it being classified as a PFIC. Because Brasilcel has valued TLE’s goodwill based on the market value of TLE’s shares, a decrease in the price of its shares may also result in TLE becoming a PFIC.

      If TLE is or was a PFIC for any taxable year during which a U.S. Holder holds its TLE common shares or preferred shares, such U.S. Holder will be subject to special tax rules with respect to any gain realized from the tender offer. Under these special tax rules (i) the gain will be allocated ratably over the U.S. Holder’s holding period for the TLE common shares or preferred shares, (ii) the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which TLE was a PFIC, will be treated as ordinary income, and (iii) the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

      If a U.S. Holder holds TLE common shares or preferred shares in any year in which TLE is classified as a PFIC, such holder would be required to file IRS Form 8621.

      In certain circumstances, a U.S. Holder, in lieu of being subject to the special tax rules discussed above, may make an election to include gain on the stock of a PFIC as ordinary income under a mark-to-market method provided that such stock is regularly traded on a qualified exchange. If a valid mark-to-market election was made by a U.S. Holder in the current or any prior taxable year (and such election remains in effect), the special tax rules discussed above do not apply. Any gain recognized pursuant to the tender offer will be treated as ordinary income in the current taxable year. U.S. Holders are urged to consult their tax advisors about the mark-to-market election and whether any such election would be applicable with respect to their particular circumstances.

      U.S. Holders are urged to consult their tax advisors concerning the U.S. federal income tax consequences of holding TLE common shares or preferred shares if TLE is or has been considered a PFIC in any taxable year.

25

      In general, information reporting requirements will apply to the cash payments received pursuant to the tender offer paid within the United States (and in certain cases, outside of the United States) to U.S. Holders other than certain exempt recipients (such as corporations), and backup withholding may apply to such amounts if the U.S. Holder fails to provide an accurate taxpayer identification number or to report dividends or interest required to be shown on its U.S. federal income tax returns. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a refund or a credit against the U.S. Holder’s U.S. federal income tax liability provided the required information is provided to the IRS.

      The following discussion summarizes the material Brazilian tax consequences of the disposition of TLE’s common shares or preferred shares by a U.S. holder not deemed to be domiciled in Brazil for Brazilian tax purposes, or a “U.S. holder” for purposes of this subsection “— Material Brazilian Tax Consequences,” including a disposition of common shares or preferred shares in the tender offer. This discussion does not address all the Brazilian tax considerations that may be applicable to any particular non-Brazilian holder, and each non-Brazilian holder should consult its own tax advisor about the Brazilian tax consequences of disposing of TLE shares in the tender offer.

      According to Law No. 10,833, enacted on December 29, 2003, the disposition of assets located in Brazil by a non-resident to either a Brazilian resident or a non-resident may be subject to taxation in Brazil, regardless of whether the disposition occurs outside or within Brazil.

      Gains realized outside Brazil or in Brazil by a U.S. holder or a non-Brazilian holder on disposition of TLE’s common shares or preferred shares or by an ADS holder on the disposition of ADSs representing TLE’s preferred shares may be taxed at 25%, 20% or 15%, or be free of Brazilian tax, depending on the circumstances:

      The “gain realized” as a result of a transaction on a Brazilian stock exchange is the difference between the amount in reais realized on the sale or exchange and the acquisition cost measured in reais, without any correction for inflation. Despite the fact that the legislation is not entirely clear, the acquisition cost of shares registered as an investment with the Central Bank has been historically calculated on the basis of the foreign

26

      Other Brazilian Taxes. There are no Brazilian stamp, issue, registration or similar taxes or duties payable by holders of shares.

      A financial transaction tax, or the “IOF tax,” may be imposed on a variety of transactions, including the conversion of Brazilian currency into foreign currency (e.g., for purposes of paying dividends and interest). The IOF tax rate on such conversions is currently 0%, but the minister of finance has the legal power to increase the rate to a maximum of 25%. Any increase would be applicable only prospectively. The IOF tax may also be levied on transactions involving bonds or securities, or “IOF/ Títulos tax,” even if the transactions are effected on Brazilian stock, futures or commodities exchanges. The rate of the IOF/ Títulos tax with respect to TLE’s shares is currently 0%. The minister of finance, however, has the legal power to increase the rate to a maximum of 1.5% of the amount of the taxed transaction per each day of the investor’s holding period, but only to the extent of gain realized on the transaction and only on a prospective basis.

      In addition to the IOF tax, a second, temporary tax that applies to the removal of funds from accounts at banks and other financial institutions, or the “CPMF tax,” will be imposed on distributions in respect of shares in the event that these distributions are converted into U.S. dollars and remitted abroad by the applicable custodian. The CPMF will be in effect until December 31, 2007 at the rate of 0.38%. From July 13, 2002, transactions conducted through the Brazilian stock exchanges in current accounts specified for stock exchange transactions and the related remittance of funds abroad are exempt from the CPMF tax.

9. Accounting Treatment of the Tender Offer.

      Under Brazilian accounting practices, the acquisition of common shares and preferred shares of TLE in the tender offer will be recorded by Brasilcel at the book value of the shares acquired. The difference between the purchase price and the book value of this minority interest, if any, will be recorded as goodwill. Goodwill is generally amortized over a five- to ten-year period on a straight-line basis, based on the estimated future profitable operations of the underlying entity.

      Under U.S. generally accepted accounting principles, or “U.S. GAAP,” the acquisition of common shares and preferred shares of TLE in the tender offer will be recorded using the purchase method of accounting pursuant to Statement of Financial Accounting Standards No. 141, “Business Combinations,” and the related interpretations. Under the purchase method of accounting, the purchase price of this minority interest is allocated to the proportional amount of the underlying assets acquired, including identifiable intangible assets, and liabilities assumed based on their estimated fair values on the date of acquisition. The excess of the cost of the minority interest over the net amount assigned to assets acquired and liabilities assumed, if any, is recognized as goodwill. Under U.S. GAAP, goodwill is not subject to amortization over its estimated useful life but is subject to assessment for impairment at least annually by applying a fair value-based test.

10. Certain Information About the Shares.

      The principal market on which the common shares and the preferred shares of TLE are traded is the São Paulo Stock Exchange, where they are listed under the ticker symbols “TLCP3” and “TLCP4,” respectively. ADSs representing preferred shares of TLE are traded on the New York Stock Exchange under the ticker symbol “TBE.” Each ADS represents 50,000 preferred shares of TLE. As of July 31, 2004, there were 167,232,478,151 common shares, 313,436,994,532 preferred shares (including preferred shares underlying ADSs) and 3,407,800 ADSs issued and outstanding.

27

      The following table sets forth, for the calendar quarters indicated, the low and high sales prices for lots of 1,000 common shares and 1,000 preferred shares and for the ADSs.

Source: São Paulo Stock Exchange, New York Stock Exchange (through Reuters)

28

      The following chart shows the parent companies of TLE, including Brasilcel, as of the date of this offer to purchase. The percentages in bold italics refer to voting share capital, and the percentages not in bold italics refer to total share capital.

      Brasilcel. Brasilcel is a joint venture of Telefónica Móviles, Portugal Telecom and PT Móveis and is managed on an equal basis by those companies. Brasilcel was created pursuant to a strategic agreement signed by Portugal Telecom and Telefónica Móviles in January 2001 to create a cellular services company in Brazil that would aggregate all of the parties’ investments in cellular telecommunications businesses in Brazil to the extent permitted under Brazilian law. After receiving regulatory approval, the Telefónica group and the Portugal Telecom group contributed the shares of several cellular communications companies to Brasilcel in December 2002. See Section 12 — “Interests of Directors, Executive Officers and Certain Controlling Persons; Transactions and Arrangements — Transactions and Arrangements Concerning Common and Preferred Shares — Joint Venture Arrangement.” Brasilcel holds controlling interests in several Brazilian telecommunications companies, including TLE, Telesp Celular Participações S.A., Tele Sudeste Celular Participações S.A., Celular CRT Participações S.A. and Tele Centro Oeste Celular Participações S.A. Brasilcel is incorporated under the laws of The Netherlands under the name Brasilcel N.V. Its corporate domicile is located at Strawiskylaan, 3105, 1077 ZX, Amsterdam, The Netherlands.

      Iberoleste Participações S.A. Iberoleste Participações is incorporated under the laws of Brazil under the name Iberoleste Participações S.A. The principal business of Iberoleste Participações is as a holding company for a portion of Brasilcel’s interest in TLE. Its principal executive offices are located at Rua Martiniano de Carvalho, 851, 20th Floor, São Paulo, SP, Brazil, 01321-001. Its telephone number is (55) 11 3549-7422.

29

      Portugal Telecom. Portugal Telecom is a limited liability holding company, organized as a Sociedade Gestora de Participações Sociais under the laws of the Republic of Portugal under the name Portugal Telecom, SGPS, S.A. The principal business of Portugal Telecom is, through its subsidiaries, the provision of wireline services, including fixed lines, data and business solutions and internet related services; cellular telecommunications services in Portugal and Brazil; multimedia services including TV programming, film distribution and screening, newspaper publishing and distribution, radio programming and provision of cable internet; and the sale of telecommunications equipment. Its principal executive offices are located at Avenida Fontes Pereira de Melo, 40, 1069-300, Lisbon, Portugal. Its telephone number is (351) 21 500-1701.

      PT Móveis. PT Móveis is a limited liability holding company, organized as a Sociedade Gestora de Participações Sociais under the laws of the Republic of Portugal under the name PT Móveis, SGPS, S.A. PT Móveis is a subsidiary of TMN. The principal business of PT Móveis is as a holding company for Portugal Telecom’s investment in Brasilcel and in Medi Telecom, which provides cellular telecommunications services in Morocco. Its principal executive offices are located at Avenida Álvaro Pais, 02, 1649-041, Lisbon, Portugal. Its telephone number is (351) 21 791-4400.

      Tagilo Participações Ltda. Tagilo Participações is incorporated under the laws of Brazil under the name Tagilo Participações Ltda. The principal business of Tagilo Participações is as a holding company for a portion of Brasilcel’s investment in TLE and Tele Sudeste Celular Participações S.A. Its principal executive offices are located at Rua Roque Petroni Jr., 1464, 6th Floor — Morumbi, São Paulo, SP, Brazil, 04583-110. Its telephone number is (55) 11 5105-1155.

      Telefónica. Telefónica is incorporated under the laws of Spain under the name Telefónica, S.A. The principal business of Telefónica is, through its subsidiaries, the provision of fixed line and cellular telecommunications services, data transmission services and audiovisual content and media services in Spain, Latin America and other regions. Its principal executive offices are located at Gran Vía, 28, 28013, Madrid, Spain. Its telephone number is (34) 91 584-0306.

      Telefónica Internacional. Telefónica Internacional is incorporated under the laws of Spain under the name Telefónica Internacional S.A. Telefónica Internacional is a subsidiary of Telefónica S.A.. The principal business of Telefónica Internacional is, through its subsidiaries, the provision of fixed line telecommunications services in Latin America. Its principal executive offices are located at Gran Via 28, 7th Floor, Madrid, Spain, 28013. Its telephone number is (34) 91 362-6607.

      Telefónica Móviles. Telefónica Móviles is incorporated under the laws of Spain under the name Telefónica Móviles, S.A. Telefónica Móviles is a subsidiary of Telefónica, S.A.. Telefónica Móviles, S.A. is a holding company that provides cellular telecommunications services through subsidiaries and investments in Spain, Morocco and Latin America. Telefónica Móviles manages all the cellular assets of the Telefónica Group. Its principal executive offices are located at C/ Goya, 24, 28001, Madrid, Spain. Its telephone number is (34) 91 423-4400.

      TLE. TLE is a holding company engaged, through its subsidiaries, in cellular telecommunications businesses in Brazil. Its wholly owned subsidiary Telebahia Celular S.A. provides cellular telecommunications services in the state of Bahia, and its wholly owned subsidiary Telergipe Celular S.A. provides cellular telecommunications services in the state of Sergipe. TLE is incorporated under the laws of the Federative Republic of Brazil under the name Tele Leste Celular Participações S.A. Its principal executive offices are located at Rua Silvera Martins 1036, Cabula, Salvador, Bahia, Brazil 41150-000. Its telephone number is (55) 71 387-7620.

      TMN. TMN is a limited liability holding company, organized under the laws of the Republic of Portugal, under the name TMN — Telecomunicações Móveis Nacionais S.A. TMN is a subsidiary of Portugal Telecom. The principal business of TMN is the provision of cellular telecommunications services in Portugal. Its principal executive offices are located at Avenida Álvaro Pais, 02, 1649-041 Lisbon, Portugal. Its telephone number is (351) 21 791-4400.

      Directors and Executive Officers. The name, business address and business telephone number of the directors and executive officers of these companies are set forth in Schedule 1 hereto.

30

      During the last five years, Brasilcel, Iberoleste Participações and Tagilo Participações have not, and, to the knowledge of Brasilcel, none of Telefónica Móviles, Telefónica, Telefónica Internacional, TMN, PT Móveis, Portugal Telecom or any of the persons listed on Schedule 1 hereto has been (1) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (2) a party to any judicial or administrative proceeding (excluding matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, U.S. federal or state securities laws, or a finding of any violation of U.S. federal or state securities laws.

      Where You Can Find More Information About TLE. TLE files annual reports on Form 20-F and furnishes reports on Form 6-K to the SEC. You may read and copy any of these reports at the SEC’s public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site at http://www.sec.gov that contains reports and other information regarding issuers that file electronically with the SEC.

      TLE is also subject to the informational requirements of the Brazilian Comissão de Valores Mobiliários, or the “Brazilian Securities Commission,” and the São Paulo Stock Exchange and files reports and other information relating to its business, financial condition and other matters with the Brazilian Securities Commission and the São Paulo Stock Exchange. Brasilcel and TLE have also made certain information relating to the transaction available on the Internet site http://www.vivo.com.br/ri, but that information is not incorporated by reference into this offer to purchase.

      Each of Brasilcel, Telefónica Móviles, Telefónica, TMN, PT Móveis and Portugal Telecom may be deemed to be beneficial owners pursuant to the Exchange Act of the 5,265,273,319 common shares of TLE, or approximately 3.1% of TLE’s common shares, and 10,934,219,376 preferred shares of TLE, or approximately 3.5% of TLE’s preferred shares, held directly by Brasilcel. Each of Brasilcel, Telefónica Móviles, Telefónica, TMN, PT Móveis, Portugal Telecom and Iberoleste Participações may be deemed to be beneficial owners pursuant to the Exchange Act of the 90,432,403,486 common shares of TLE, or approximately 54.1% of TLE’s outstanding common shares, and the 15,699,537,789 preferred shares of TLE, or approximately 5.0% of TLE’s preferred shares, held by Iberoleste Participações. Each of Brasilcel, Telefónica Móviles, Telefónica, TMN, PT Móveis, Portugal Telecom and Tagilo Participações may be deemed to be beneficial owners pursuant to the Exchange Act of the 2,389,494,491 common shares of TLE, or approximately 1.4% of TLE’s outstanding common shares, and the 9,190,099,460 preferred shares of TLE; or approximately 2.9% of TLE’s outstanding preferred Shares held by Tagilo Participações.

      The management of TLE holds an aggregate of approximately 70,262 common shares of TLE, or 0.0% of TLE’s common shares, and approximately 4,600,800 preferred shares, or 0.0% of TLE’s preferred shares. These shares may be held by directors and executive officers of Brasilcel, Telefónica Móviles, Telefónica, Telefónica Internacional, TMN, PT Móveis, Portugal Telecom, Iberoleste Participações or Tagilo Participações to the extent such persons are also members of management of TLE. See Schedule 1 to this offer to purchase. In addition, directors and executive officers of Brasilcel, Telefónica Móviles, Telefónica, Telefónica Internacional, TMN, PT Móveis, Portugal Telecom, Iberoleste Participações and/or Tagilo Participações own an additional 88,414 common shares and 67,556 preferred shares. Other than as described in the preceding sentences, to Brasilcel’s knowledge, none of the directors or executive officers of Brasilcel, Telefónica Móviles, Telefónica, TMN, PT Móveis, Portugal Telecom, Iberoleste Participações or Tagilo Participações, or any associate of these companies or their directors and executive officers, beneficially owns any common shares or preferred shares of TLE. None of Brasilcel’s subsidiaries, other than Iberoleste Participações and Tagilo Participações, beneficially owns any common shares or preferred shares of TLE, except that TLE itself holds

31

      Brasilcel has sole power to vote or to dispose of the common shares and preferred shares of TLE it holds directly. Brasilcel and Iberoleste Participações each may be deemed to have sole power to vote or to dispose of common shares and preferred shares of TLE held directly by Iberoleste Participações, and Brasilcel and Tagilo Participações each may be deemed to have sole power to vote or to dispose of the common shares and preferred shares of TLE held directly by Tagilo Participações. Pursuant to the joint venture arrangement described below under “— Transactions and Arrangements Concerning Common and Preferred Shares — Joint Venture Arrangement,” Telefónica Móviles, on one hand, and Portugal Telecom and PT Móveis, on the other hand, have equal voting rights in Brasilcel. Telefónica Móviles, Telefónica, TMN, PT Móveis and Portugal Telecom therefore each may be deemed to share the power to vote or to dispose of preferred shares of TLE held directly and indirectly by Brasilcel. Brasilcel, Telefónica Móviles, Telefónica, TMN, PT Móveis and Portugal Telecom disclaim membership in a group within the meaning of Section 13(d)(3) of the Exchange Act.

      None of Brasilcel or any of its subsidiaries (including TLE, Iberoleste Participações and Tagilo Participações) has effected any transaction in the common shares or preferred shares of TLE in the past 60 days. To Brasilcel’s knowledge, none of Telefónica, Telefónica Internacional, Telefónica Móviles, Portugal Telecom, TMN or PT Móveis, any director or executive officer of Brasilcel, Brasilcel’s subsidiaries (including TLE, Iberoleste Participações and Tagilo Participações), Telefónica, Telefónica Internacional, Telefónica Móviles, Portugal Telecom, TMN or PT Móveis, or any associate of Brasilcel or TLE, has effected any transactions in the common shares or preferred shares of TLE in the past 60 days.

      Except as described below, Brasilcel and its subsidiaries (including TLE, Iberoleste Participações and Tagilo Participações) are not, and to Brasilcel’s knowledge, none of Telefónica, Telefónica Internacional, Telefónica Móviles, Portugal Telecom, TMN, PT Móveis or any of the directors or executive officers of Brasilcel, Brasilcel’s subsidiaries (including TLE, Iberoleste Participações and Tagilo Participações), Telefónica, Telefónica Internacional, Telefónica Móviles, Portugal Telecom, TMN or PT Móveis is, a party to any agreement, arrangement, understanding or relationship with any other person relating, directly or indirectly, to any of TLE’s securities (including any agreement, arrangement, understanding or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies, consents or authorizations).

      On January 23, 2001, Telefónica Móviles, Portugal Telecom and PT Móveis agreed to create a joint venture to consolidate Telefónica Móviles’ cellular businesses in Brazil with those of Portugal Telecom. Under this joint venture framework agreement, each of the Telefónica group and the Portugal Telecom group agreed to contribute to a 50:50 joint venture certain of its cellular businesses in Brazil, including interests in operating companies and holding companies that own cellular licenses in Brazil, such as TLE, as well as other assets or business that are operated for the benefit of those companies. This joint venture resulted in the formation of Brasilcel, the controlling shareholder of TLE.

      On October 17, 2002, Telefónica Móviles, on the one hand, and Portugal Telecom and PT Móveis, on the other, entered into the definitive stockholders’ agreement and subscription agreement that implemented the joint venture framework agreement signed in January 2001. In accordance with these definitive agreements, Telefónica Móviles and the Portugal Telecom group have the same voting rights in Brasilcel. This equality in voting rights will continue to exist even if either party’s economic and voting interest is diluted below 50%, but not lower than 40%, as a consequence of a capital increase. The equality in voting rights will cease to exist if the percentage of ownership of one of the parties falls below 40% during an uninterrupted period of six months. In this event, if the group with the reduced interest were the Portugal Telecom Group, it would be entitled to

32

      Also, in accordance with the definitive agreements, the Portugal Telecom group would be entitled to sell to Telefónica Móviles, which would be obligated to buy, all of Portugal Telecom’s ownership interest in Brasilcel should there be a change in control at Telefónica, Telefónica Móviles or any subsidiary of the latter that holds a direct or indirect ownership interest in Brasilcel. Similarly, Telefónica Móviles would be entitled to sell to the Portugal Telecom group, which would be obliged to buy, its ownership interest in Brasilcel if there is a change of control at Portugal Telecom, PT Móveis or any other subsidiary of either company that holds a direct or indirect ownership interest in Brasilcel.

      The definitive agreements established that the parties to the agreements shall transfer to Brasilcel all of their direct or indirect ownership interests in equity securities, whether voting or non-voting, in cellular properties in Brazil, including any such interests obtained from future acquisitions of Brazilian cellular properties by those parties.

      On December 27, 2002, following the agreements entered into on October 17, 2002 and after having obtained the necessary authorization from the Brazilian authorities for the contribution, Telefónica Móviles and PT Moveis contributed to Brasilcel all the shares held directly or indirectly by the two groups in their cellular communications companies in Brazil.

      Communication Agreements. TLE has entered into transactions with other companies controlled by Brasilcel or by Telefónica for the use of their networks and long distance (roaming) cellular communications technology, technical assistance, general corporate services and to provide call centers. The counterparties to these various agreements are:

      The terms of the roaming agreements and of the agreements for network use are regulated by the Agência Nacional de Telecomunicações — ANATEL, the Brazilian telecommunications regulatory agency.

      Consulting Service Agreement. TLE has entered into a Consulting Service Agreement with Telefónica Móviles pursuant to which TLE receives marketing, technical and business development advice. Under the Consulting Services Agreement, TLE is obligated to make annual payments to Telefónica Móviles of up to 2% of net operating revenues. TLE and its subsidiaries made payments of R$3.8 million in 2003 and R$3.4 million in 2002.

33

      Other Service Arrangements. The following services are rendered by companies controlled by Portugal Telecom and Telefónica:

      Certain of the members of the board of directors and executive officers of TLE are also board members and/or executive officers of Brasilcel, the controlling shareholder of TLE, or its affiliates. See Schedule 1 to this offer to purchase.

      The number of shares that Brasilcel is offering to acquire has been determined to allow Brasilcel to increase its participation in TLE without suppressing the liquidity of the remaining shares of those classes for purposes of Brazilian laws and regulations, in particular Instruction No. 361 dated March 5, 2002 of the Brazilian Securities Commission. The purchase of common shares and preferred shares of TLE by Brasilcel in the tender offer will reduce the number of shares that might otherwise be traded publicly and may reduce the number of TLE shareholders. These reductions may reduce the volume of trading in TLE common shares and preferred shares and ADSs representing TLE preferred shares after completion of the tender offer. Shareholders may be able to sell non-tendered common shares and preferred shares in the future on the São Paulo Stock Exchange or otherwise at a net price higher or lower than the purchase price in the tender offer, and holders of ADSs may be able to sell ADSs in the future on the New York Stock Exchange at a net price higher or lower than they might obtain by participating in the tender offer.

      However, Brasilcel anticipates that there will be a sufficient number of common shares and preferred shares of TLE and ADSs representing preferred shares of TLE outstanding and publicly traded after completion of the tender offer to ensure a continued trading market for those shares. Based on the regulations of the Brazilian Securities Commission and the New York Stock Exchange, Brasilcel does not believe that its purchase of common shares or preferred shares in the tender offer will cause the remaining outstanding common shares and preferred shares to be delisted from the São Paulo Stock Exchange or to cause the remaining ADSs to be delisted from the New York Stock Exchange.

      The TLE ADSs are now “margin securities” under the rules of the Board of Governors of the U.S. Federal Reserve System. This classification has the effect of, among other things, allowing brokers to extend credit to their customers using the ADSs as collateral. Brasilcel believes that, after the purchase of preferred shares under the tender offer (including preferred shares received upon the surrender of ADSs), the ADSs remaining outstanding will continue to be margin securities for purposes of the U.S. Federal Reserve Board’s margin rules and regulations.

      The TLE preferred shares are registered under the Exchange Act, which requires, among other things, that TLE furnish certain information to its shareholders and the SEC. Brasilcel believes that its purchase of

34

      There will be no change in the rights of holders of common shares or preferred shares as a result of the tender offer.

      General. Brasilcel is not aware of (1) any license or other regulatory permit that appears to be material to the business of Brasilcel or any of its subsidiaries, including TLE, that might be adversely affected by the purchase of common and preferred shares by Brasilcel in the tender offer or (2) any approval or other action by any domestic (federal or state) or foreign governmental authority which would be required before the purchase of common and preferred shares by Brasilcel in the tender offer. Should any such approval or other action be required, it is Brasilcel’s present intention to seek that approval or action. Brasilcel does not currently intend, however, to delay the purchase of common and preferred shares pursuant to the tender offer pending the outcome of any such action or the receipt of any such approval. However, Brasilcel may be required to delay the acceptance for payment of or payment for shares tendered in the tender offer until the outcome of that process, if necessary, is known. Any such approval or other action, if needed, might not be obtained or might be obtained only with substantial cost or conditions, and adverse consequences might result to the business of Brasilcel, TLE or their respective subsidiaries.

      Antitrust. The purchase of the common and preferred shares by Brasilcel pursuant to the tender offer is not subject to the approval of Brazilian antitrust authorities.

      Registering Under Resolution No. 2,689/00. The right to convert dividend payments and proceeds from the sale of Brazilian securities into foreign currency and to remit those amounts outside Brazil is subject to restrictions under foreign investment regulations, which generally require, among other things, the electronic registration of the relevant investment with the Central Bank. The depositary under TLE’s ADS program holds an electronic registration for the preferred shares underlying the TLE ADSs.

      Any ADS holder that wishes to participate directly in the tender offer, as described in Section 4 — “Procedures for Accepting the Offer and Tendering Shares — Holders of ADSs — Directo Participation in the Tender Offer,” rather than tendering ADSs through the receiving agent must withdraw the preferred shares it wishes to tender from the TLE ADS program. That holder must then obtain its own electronic registration by registering its investment in the preferred shares as a foreign portfolio investment under Resolution 2,689/00 of the National Monetary Council.

      Under Resolution No. 2,689/00, foreign investors may invest in almost all financial assets and engage in almost all transactions available in the Brazilian financial and capital markets, provided that certain requirements are met. Resolution 2,689/00 affords favorable tax treatment to foreign portfolio investors who are not residents of a tax haven jurisdiction as defined by Brazilian tax laws (meaning a country that does not impose taxes, a country where the maximum income tax rate is lower than 20% or a country that restricts the disclosure of shareholder composition or the ownership of investments). See Section 8 — “Material Tax Consequences — Material Brazilian Tax Consequences.” Nevertheless, securities trading is restricted to transactions carried out on the stock exchanges or organized over-the-counter markets licensed by the Brazilian Securities Commission.

      A foreign portfolio investor under Resolution No. 2,689/00 must:

35

      Securities and other financial assets held by foreign investors pursuant to Resolution No. 2,689/00 must be registered or maintained in deposit accounts or under the custody of an entity duly licensed by the Central Bank or the Brazilian Securities Commission.

      If a holder of ADSs wishes to withdraw the preferred shares underlying those ADSs and convert its investment into a foreign portfolio investment under Resolution No. 2,689/00, it should begin the process of obtaining its own foreign investor registration in advance of surrendering the ADSs and withdrawing the preferred shares. If the holder of ADSs does not timely complete this process, the custodian for the depositary will neither effect the exchange nor deliver the underlying preferred shares, and will instruct the depositary to cancel the exchange and return the ADSs to the holder.

      Instruction No. 361. Public tender offers in Brazil are regulated under Instruction No. 361, dated March 5, 2002, of the Brazilian Securities Commission. Under Instruction 361, if the Brazilian Securities Commission determines that a tender offer by a controlling shareholder or a person acting with a controlling shareholder leads to a suppression of the liquidity of the shares of the applicable class, the offeror may be required to launch a tender offer for all remaining publicly held shares or to sell the excess within the period set forth in the Instruction.

      Brasilcel will not pay any fees or commissions to any broker, dealer or other person for soliciting the tendering of common or preferred shares to Brasilcel pursuant to the tender offer.

      Brokers, dealers, commercial banks and trust companies will be reimbursed by Brasilcel for customary handling and mailing expenses incurred by them in forwarding material to their customers.

      Although the tender offer is open to all holders of TLE common and preferred shares, this offering document is intended solely for holders of TLE common shares and preferred shares who are residents in the United States and holders of ADSs representing TLE preferred shares. Separate offering materials in Portuguese are being simultaneously made available to holders of common shares and preferred shares who are not residents of the United States through publication in Brazil as required by Brazilian law. Brasilcel is not aware of any jurisdiction where the making of the tender offer or the election to tender common or preferred shares in connection therewith would not be in compliance with the laws of that jurisdiction. If Brasilcel becomes aware of any jurisdiction in which the making of the tender offer or the election to tender common or preferred shares in connection therewith would not be in compliance with applicable law, Brasilcel will make a good faith effort to comply with any such law. If, after such good faith effort, Brasilcel cannot comply with any such law, the tender offer will not be made to (nor will elections to tender shares be accepted from or on behalf of) the holders of common or preferred shares in that jurisdiction. In any jurisdiction where the securities, blue sky or other laws require the tender offer to be made by a licensed broker or dealer, the tender offer will be deemed to be made on behalf of Brasilcel by one or more registered brokers or dealers licensed under the laws of such jurisdiction.

      If, within a period of one year from the date of the auctions:

36

      Brasilcel has agreed to pay in reais to each holder of the applicable class of shares of TLE whose shares were purchased in this tender offer the difference, if any, between:

      In addition, in the event that TLE carries out a corporate transaction whereby its shareholders receive shares of another public company within one year from the date of the auctions, Brasilcel has agreed to pay to the holders of outstanding shares of the applicable class of TLE whose shares were purchased in this tender offer the difference, if any, between:

      No person has been authorized to give any information or make any representation on behalf of Brasilcel not contained in this offer to purchase, and if given or made, such information or representation must not be relied upon as having been authorized.

      Brasilcel has filed with the SEC a Schedule TO, together with exhibits, furnishing certain additional information with respect to the tender offer. You may read and copy the Schedule TO and any amendments thereto, including exhibits, at the SEC’s public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site at http://www.sec.gov that contains reports and other information regarding issuers that file electronically with the SEC.

37

INFORMATION ABOUT THE DIRECTORS AND EXECUTIVE

1. Directors and Executive Officers of Brasilcel.

      The following table sets forth the name and position of each director and executive officer of Brasilcel. The current business address of each person is at Strawiskylaan, 3105, 1077 ZX, Amsterdam, The Netherlands, except where otherwise indicated below. Each position set forth opposite an individual’s name refers to a position with Brasilcel unless otherwise indicated.

S-1

S-2

S-3

S-4

S-5

      The following table sets forth the name and position of each director and executive officer of TLE. The current business address of each person is Rua Silvera Martins 1036, Cabula, Salvador, Bahia, Brazil, 41150-000, except where otherwise indicated below. Each position set forth opposite an individual’s name refers to a position with TLE unless otherwise indicated.

S-6

S-7

S-8

S-9

      The following table sets forth the name and position of each director and executive officer of Iberoleste Participações. The current business address of each person is Rua Martniano de Carvalho, 851, 20th Floor, São Paulo, SP, Brazil, 01321-001, except where otherwise noted below. Each position set forth opposite an individual’s name refers to a position with Iberoleste Participações unless otherwise indicated. Each person listed below is a citizen of Brazil.

S-10

      The following table sets forth the name and position of each director and executive officer of Tagilo Participações. The current business address of each person is Rua Roque Petroni Jr., 1464, 6th Floor — Morumbi, São Paulo, SP, Brazil, 04707-000, except where otherwise noted below. Each position set forth opposite an individual’s name refers to a position with Tagilo Participações unless otherwise indicated.

S-11

5. Directors and Executive Officers of Telefónica.

      The following table sets forth the name and position of each director and executive officer of Telefónica. The current business address of each person is Gran Via, 28, 28013, Madrid, Spain, except where otherwise indicated below. Each position set forth opposite an individual’s name refers to a position with Telefónica unless otherwise indicated. Each person listed below is a Spanish citizen except Miguel Horta e Costa and Antonio Viana Baptista, who are Portuguese citizens.

S-12

S-13

S-14

S-15

      The following table sets forth the name and position of each director and executive officer of Portugal Telecom. The current business address of each person is Avenida Fontes Pereira de Melo, 40, 1069-300, Lisbon, Portugal, except where otherwise indicated below. Each position set forth opposite an individual’s name refers to a position with Portugal Telecom unless otherwise indicated. Each person listed below is a citizen of Portugal, except Fernando Abril-Matroell Hernandez, who is a Spanish citizen, Pedro Sampaio Malan, who is a Brazilian citizen, and Gerald S. McGowan and Peter Eugene Golob, who are United States citizens.

S-16

S-17

S-18

S-19

S-20

S-21

S-22

S-23

S-24

S-25

      The following table sets forth the name and position of each director and executive officer of Telefónica Internacional. The current business address of each person is at Gran Via 28, 7th Floor, Madrid, Spain, 28013, except as otherwise indicated below. Each position set forth opposite an individual’s name refers to a position with Telefónica Internacional unless otherwise indicated. Each person listed below is a citizen of Spain, except as otherwise indicated below.

S-26

      The following table sets forth the name and position of each director and executive officer of Telefónica Móviles. The current business address of each person is C/ Goya, 24, 28001 Madrid, Spain, except where otherwise indicated below. Each position set forth opposite an individual’s name refers to a position with Telefónica Móviles unless otherwise indicated. Each person listed below is a Spanish citizen, except as otherwise indicated below.

S-27

S-28

S-29