UPDATE 1-Spain's Telefonica bids to buy rest of Chile's CTC

(Adds offer amount per CTC share class, quotes, background)

SANTIAGO, Sept 11 (Reuters) - Spain's Telefonica (TEF.MC) on Thursday offered to buy all shares it does not own in Telefonica Chile (CTC) CTCa.SN, a deal it said was worth around $985 million.

Spain's Telefonica, which already has a controlling stake in the company, said in a statement it would launch a public offer within five days through its Chilean subsidiary to buy the 55.1 percent worth of outstanding shares it does not own.

Telefonica said it would offer 1,000 pesos per share for series A shares, and 900 pesos per share for series B shares.

The A shares closed down 3.49 percent at 801 pesos on Thursday before the offer was announced.

"It's business as usual. This operation does not change what we've been doing in fixed telephony with Telefonica Chile," Jorge Abadia, director of corporate development for Telefonica Latin America, told Reuters.

"It does give us a little more operational flexibility ... The operation in Chile is perhaps the only one in which Telefonica manages with minority partners," he added. "Having minority partners ... slows us down when it comes to making decisions."

Chile's Telefonica is the nation's largest fixed-line telecommunications company, but revenue has been pressured by the entry of competitors to the market and a boom in cellular phone usage. ($1 = 530 pesos) (Editing by Phil Berlowitz)