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Hicks, Muse Bets $700M on Latino CEI-nergy

A key motivation behind Dallas-based private-investment
firm Hicks, Muse, Tate & Furst Inc.'s investment in Argentina's CEI Citicorp
Holdings S.A. was to take advantage of the potential synergies in cable and telephony
technologies, an analyst said.

Last week, Hicks, Muse said it will take a $700 million
equity stake in CEI, giving it about 30 percent of the company.

"The only way for [Hicks, Muse] to play both the
telecommunications and media businesses in Argentina was through CEI. Right now, they are
the only ones that provide that synergy, which will start as soon as [telecommunications]
deregulation takes place in 1999," said Sandy Pique, a New York-based analyst with
Bear, Stearns & Co.

Mighty Spain-based telco Telefónica de España
Internacional S.A. (TISA) is a key strategic partner with CEI in investments such as
Argentine MSO CableVisión/TCI2. CEI also has investments in the country's
leading telco, Telefónica de Argentina S.A., which is managed by TISA's parent,
Telefónica de España.

CEI's media-group rival in Argentina, Grupo Clarín,
does not have a telecommunications-industry partner of its own.

Offering a telephony service over cable and vice versa is
not permitted under Argentine law, but it will be allowed once the telecommunications
sector is deregulated next year.

Through a memorandum of understanding, Hicks, Muse said it
will acquire CEI shares held by two major shareholders: Citibank N.A. of the United States
and Los W S.A., which is owned by Argentina's Wertheim family.

Hicks, Muse replaces what Pique described as "passive
investors," and it brings two other key ingredients to the table -- "knowledge
of the business, with financial muscle." Over the past year, Hicks, Muse has become a
major investor in the U.S. media industry, as well.

In the past 18 months, Pique estimated that CEI has
invested $2 billion on a shopping spree in Argentina across a extremely broad range of

CEI's power moves in the market won attention when it
took control of Cablevisión. It then went on to take over sports-acquisition and
production company Torneos y Competencias (TyC) S.A.