TDE.L Regulatory News (TDE)

23 Mar 2006 12:14

Telefonica SA23 March 2006 COMUNICATION OF RELEVANT FACT Telefonica, S.A., in compliance with the provisions in Article 82 of SecuritiesMarket Law 24/1988 and companion provisions, hereby reports that on March 17,its subsidiary Telefonica Moviles ("TEM") received a letter setting forth aproposed merger by Telefonica, S.A. ("TEF") in the terms revealed by TEF on theprevious day by way of a Relevant Fact. Notice is hereby given in this respect that the Delegate Committee (ComisionDelegada) of TEM, adopted, among others, the following resolutions: (i) To commence a period of strategic, financial and legal analysis of theproposed transaction from the standpoint of the corporate interests of TEM and,as the case may be, for negotiation of the economic and legal terms of themerger. (ii) To place on record that the nominee directors at the Company, namely, Mr.Corominas Vila, Mr. Lada Diaz, Mr. Alvarez-Pallete Lopez, Mr. Carpio Garcia, Mr.Goyenechea Fuentes, Mr. Massanell Lavilla, Mr. Burillo Azcarraga and Mr. AlmansaMoreno-Barreda, have a conflict of interest regarding the merger transactionmentioned above and, therefore, they shall not take part in any analysis anddecision-making related to the above-mentioned transaction, either by the Boardof Directors or the Delegate Committee. Mr. Viana Baptista, for his part, as theCompany's chief executive, has stated his decision to support and activelycooperate with the independent Directors in their work and discussions eventhough, in order to avoid any type of potential conflict of interest, or merelythe appearance of such, he will not to take part in the vote on the proposedmerger, without prejudice to his potentially adhering to the decisions adoptedby the independent directors on the merger. (iii)To set up an ad hoc committee (the "Merger Committee"), that will befostered and supported by Mr. Viana-Baptista, composed exclusively of TEMindependent directors, responsible for managing and leading the analysis andnegotiation work, the discussions on the proposed merger transaction, and forsubmitting to the Audit and Control Committee (Comision de Auditoria y Control),to the Delegate Committee or to the Board of Directors, as appropriate, theproposed decisions that it deems necessary or desirable. (iv) To call a meeting of the Board of Directors for March 29, 2006 in order forit, with the sole intervention of the independent directors and the adherence,should it be the case, of Mr. Viana Baptista, to discuss and adopt the decisionsit deems fit regarding the merger, without prejudice to the previous workcarried out and meetings held in this respect. It is hereby placed on record that the foregoing resolutions were adopted withthe affirmative vote of all of the independent directors who are members of theDelegate Committee, namely, Mr. Mas Millet, Mr. Canalejo Larrainzar, Mr. Merrydel Val Gracie and Mr. Echenique Landiribar, and that Mr. Viana Baptista adheredto the decision of the independent directors, although Mr. Corominas Vila, Mr.Alvarez Pallete, Mr. Almansa Moreno-Barreda and Mr. Lada Diaz were absent fromthe discussions and vote on the same, since, as mentioned above, they have aconflict of interest arising from the fact that they are nominee directorsappointed at the request of TEF. This information is provided by RNS The company news service from the London Stock Exchange