Telefonica offers to buy out remainder of Chile unit

SANTIAGO, Dec 1 (Reuters) - Spain's Telefonica SA (TEF.MC) said on Monday it offered to buy out 31.1 million shares of Telefonica Chile CTCa.SN for an estimated $50.4 million, in a bid to gain 100 percent control of its Chilean unit.

The company last month increased its stake to 96.75 percent from 44.9 percent after shareholders agreed in October to modify bylaws to allow the acquisition, valued at more than $1 billion, to go through.

The company offered on Monday to buy around 28 million series 'A' shares for 1,100 pesos each and around 3 million series 'B' shares for 990 pesos each, an offer it said would be valid for 30 days beginning on Dec. 2.

Telefonica shares surged 8.3 percent to 1,085 pesos per share in afternoon trading following news of the offer.

Telefonica Chile, the nation's leading fixed-line service provider, saw profits fall 26 percent in the first nine months of the year on flat sales growth and rising operating costs. (Reporting by Manuel Farias; Writing by Lisa Yulkowski; Editing by Brian Moss)