Telefonica Hires 2nd Legal Adviser In Arbitration Proceedings

Telefonica SA (TEF) has hired a second law firm, Dewey & Leboeuf LLP, to advise it in the arbitration proceedings it has instituted in an Amsterdam court to break up the Brazilian venture with Portugal Telecom SGPS SA (PT) through which it controls Vivo Participacoes SA (VIV), a Telefonica spokesman said Wednesday.

Telefonica said one of the apsects of the case the U.S. law firm will focus on is whether PT's failure to provide information on how the Portuguese government could use its so-called golden share constituted a breach of the company's commitments toward investors.

The Portuguese government last month used its golden share--a mechanism European governments have used to thwart hostile takeovers of companies they consider strategically important--to block Telefonica's EUR7.15 billion offer for PT's half of the companies' joint venture.

Telefonica said Monday it had hired Dutch law firm De Brauw Blackstone Westbroek to explore how to dissolve the Netherland's registered joint venture, Brasilcel.

-By Jonathan House, Dow Jones Newswires, 34 913958127, [e-mail]