Telefonica Brasil S.a. · BMFBOVESPA:VIVT3
Telefonica Brasil — Telesp Holding — Merger or Acquisition (October 2009)
15 slides from Telefonica Brasil's merger presentation, Oct 7, 2009
Slide 1: Spirit of Progress
Spirit of PROGRESS
Slide 2: Disclaimer
Disclaimer This document contains statements that constitute forward-looking statements in its general meaning and within the meaning of the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this document and include statements regarding the intent, b
Slide 3: Index
Index O41 Key terms of Telesp Offer O2 Rationale: GVT perfect fit with Telesp 03 Summary conclusions 3 Telefonica
Slide 4: Key terms of the Telesp Offer
O11 Key terms of the Telesp Offer = Oferta Publica Voluntaria de Agoes (“Offer”) key terms: © R$ 48,00 in cash for each GVT share = OPA for up to 100% of GVT's shares = 100% of GVT's shares valued at R$ 6,5 billion = Conditions to the Tender Offer: © Acceptance of at least 51% of shares © Waiver of
Slide 5: Rationale: value creation opportunity for Telesp shareholders
Rationale: value creation opportunity for Telesp shareholders «© Allows nationwide footprint: very limited overlap = Accelerates Telesp’s plan outside Sao Paulo ® Successful challenger with leading broadband offering ® Focus on high-end users with first class-services ® Strong execution skills and e
Slide 6: Rationale: GVT has geographic fit with Telesp
O2 Rationale: GVT has geographic fit with Telesp GVT is present in 82 cities with 2.7 MM GVT coverage area Homes-Passed (30% of the GDP outside Sao Paulo) The market outside Sao Paulo represents c. 25% of the LATAM fixed telecom market Target market: 7.7 MM households (ABC) + relevant SME potential
Slide 7: Rationale: GVT has a complementary business model
Rationale: GVT has a complementary business model © Innovative product offering and pricing © Investment in own network - accelerated profitability © Quality as a differential factor = 66% of new adds of retail lines in service are broadband connections + © 73% of broadband penetration? of retail se
Slide 8: Rationale: GVT has a strong financial profile and track record
O2 Rationale: GVT has a strong financial profile and track record Net Revenues (R$ MM) EBITDA (RS MM) CAGR 06-08 ‘—+* EBITDA Margin CAGR 06-08 2006 2007 2008 2009E 2006 2007 2008 == 2009E CAPEX (R$ MM)* OCF (EBITDA - Capex) (R$ MM) ¢— Capex / Net Revenues 58% 55% 2006 2007 2008 2009E Source: Public
Slide 9: Rationale: GVT has best-in-class growth
Rationale: GVT has best-in-class growth Revenues EBITDA Growth in R$ ‘2008 / 2007) ‘2008 / 2007) <r koa 2.2% 4.0% Brositielecorn @ 6.5% -7.0% =I Telesp o 8.5% 4.6% Q jo} — 3 Embratel 13.4% 13.6% vivo 14.2% 37.3% Gm 5.1% 2.1% a —— Q =r 27.2% 22.3% Ea oO ——a Filefnica (1) organic Growth (without Geade
Slide 10: Rationale: fit and enhancement of Telesp's growth
O2 Rationale: fit and enhancement of Telesp’s growth Telesp + GVT 1HO9 pro-forma - all figures in R$ MM. Revenues EBITDA Impact on 1Ho9 SE” Telesp's growth OCF (EBITDA-Capex) <p 3,334 2,184 | | 1HO9 1HO9 1HO09 © Total transaction value is c. 1.0x Telesp annualized EBITDA = Ample financial flexibilit
Slide 11: Value: in-market consolidation advantages
Value Rationale -market consolidation advantages GVT’s illustrative valuation framework Value drivers of in-market consolidation «Cross-selling: Improvement of nationwide corporate offering =Backbone synergies =Commercial efficiencies GVT standalone A Value from Valuetonew —_in market value belongin
Slide 12: Compelling offer to GVT shareholders
O2 Compelling offer to GVT shareholders ®= 100% cash-offer ® Targeting ALL shareholders © OPA already filled = 14.3% premium over Vivendi’s intention to offer = 32.4% premium over pre-Vivendi’s announcement (Sep 8, 2009) «© Fully values GVT growth prospects GVT stock market performance YTD - October
Slide 13: Summary conclusions
03 Summary conclusions «= GVT and Telesp, a perfect fit «A combination that delivers in-market consolidation benefits © Full commitment of Telefénica to Brazil «Increased scale to boost business potential =Telesp’s all-cash tender offer is filled and superior to Vivendi’s proposal «= Expected rapid
Slide 14: Contact Details Investor Relations
O 3 Contact Details Investor Relations Gilmar Roberto Pereira Camurra - CFO Norair Ferreira do Carmo — Investor Relation Director Maria Tereza Ali Pelicano David Carolina Fernandes Pontes Mada Marina Barbosa Garbi Luciana Nori de Souza (55 11) 3549-7200 ritelefonicabr@telefonica.com.br www.telefonic
Slide 15: Signature
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TELESP HOLDING COMPANY Date: October 7, 2009 By: /s/ Norair Ferreira do Carmo Name: Norair Ferreira do C
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