Exchange Offer Agrmt Signed

Telefonica SA
17 March 2000

                PROPOSED EXCHANGE OFFER BY TELEFONICA  
         FOR ENDEMOL ENTERTAINMENT HOLDING N.V. ('ENDEMOL')

In accordance with that set forth in the Stock Market Law, in Circular 2/93 of
the Madrid Stock Exchange's managing entity and in the Circular Letter of the
CNMV 14/98, of December 28th 1998 we announce that Telefonica S.A. has today
signed an agreement with the Dutch company Endemol Entertainment Holding BV and
Mr. J. de Mol and Mr J van den Ende, both of which are majority shareholders in
the aforementioned company.  Through this agreement, Mr de Mol and Mr van de
Ende will sell their majority in their entirety stakes in Endemol Entertainment
Holding BV to Telefonica S.A.

The aforementioned shares will be acquired by Telefonica S.A. through a public
share offer to be launched on the Dutch stock market, once the terms and
conditions of the transaction have been fulfilled, and prior to June 15th 2000.
This public offering (the Offer) will cover 100% of Endemol Entertainment
Holding BV's share capital (The Offer).  The Offer will be carried out through
the exchange of new shares issued by Telefonica S.A. for shares of the Offer
Company.

The drawing up of the public offering and the Offer itself will be subject to
the fulfilment of certain conditions, such as the carrying out of a judicial
audit, a fiscal and financial Due Diligence on Endemol Entertainment Holding BV
by Telefonica S.A., the approval by the Annual General Shareholders' Meeting of
Telefonica S.A. of the corresponding capital increase for the exchange of
Endemol Entertainment Holding BV shares, the acquisition in the Offer of not
less than 75% of the Company's total share capital and the obtaining of the
necessary authorisations by the national or community authorities.

The operation is foreseen to amount to euros 5,500 million with the price per
Endemol Entertainment Holding BV share set at euros 158.

The price of Telefonica shares is euros 28.30, although this could be lowered by
a maximum of 10% depending on the average weighted trading of Telefonica shares
on the Automated Quotation Market over the ten days previous to the launching of
the offer.

The capital increase corresponding to the issue of the Telefonica S.A. shares,
which will be exchanged for Endemol Entertainment Holding BV shares, will be
presented for approval at the next Telefonica S.A. Annual General Shareholders'
Meeting to be held at first call April 6th 2000 and at second call on April 7th
2000.

Madrid, March 17, 2000.