Czerska 8/10 Street
Numer KRS: 59944
February 20, 2019 / 15:51
The Management Board of Agora S.A. with its registered office in Warsaw (‘Company’ or ‘Agora’), in reference to Current Report No. 1/2019 dated January 25, 2019, hereby announces that on February 20, 2019 the Company closed negotiations on: (i) the acquisition of shares in Eurozet Sp. z o.o. with its registered office in Warsaw (‘Eurozet’) and (ii) the establishment of detailed rules for investment in Eurozet by SFS Ventures s.r.o. with its registered office in Prague (the Czech Republic) (‘SFS Ventures’) as a majority shareholder and the Company as a minority shareholder and the cooperation of both entities as shareholders of Eurozet.
As a result of the negotiations, on February 20, 2019, the following were concluded:
Preliminary Agreement and Final Agreement
Under the Final Agreement, the Company acquired 400 shares in the share capital of Eurozet with a nominal value of PLN 50 each, representing 40% of the share capital of Eurozet and entitling the holder to exercise 40% of the total number of votes at the shareholders' meeting of Eurozet in exchange for the initial consideration of PLN 130,754,689 million. The Preliminary Agreement provides for adjustment mechanisms concerning the initial consideration based on the Eurozet capital group’s („Group”) 2018 audited results and the final value of certain economic and financial parameters of the Group, as set forth in the Preliminary Agreement.
The detailed terms and conditions of the Preliminary Agreement and the Final Agreement (concerning in particular representations and warranties made by the Seller, the principles of liability and the terms and conditions for asserting potential claims by the parties) do not deviate from the market solutions used in agreements concluded for similar transactions.
In accordance with the provisions of the Shareholders' Agreement, with a view to protecting Agora’s investment in Eurozet and protecting the position of Agora as a minority shareholder of Eurozet, Agora is granted typical rights of a minority shareholder, including the right to appoint and dismiss one member of the supervisory board of Eurozet and the right to influence decisions on selected key issues concerning, in particular, the capital structure, amendment of the company deed, changes in the share capital or liquidation of the company. Those entitlements will be due to Agora as long as Agora and its related entities have at least 34% plus one shares / votes in the share capital of Eurozet / at the Eurozet shareholders' meeting. However, Agora, as a minority shareholder, will not influence, inter alia, the operational activities of Eurozet or the programme strategy of the radio station.
The Shareholders' Agreement also contains the following provisions governing the rules of the shareholders’ cooperation, should they exit their investment in Eurozet:
Agora is entitled (but not obliged) to exercise the Call Option during the period commencing after the lapse of 12 months and ending after the lapse of 36 months from the date of conclusion of the Final Agreement (‘Call Option Period’) or until June 20th, 2022 in case Agora submits to SFS Ventures a declaration of will to exercise the Call Option. In specific cases described in the Shareholders' Agreement concerning substantial reduction in the scope of the Group’s core activities, the Call Option Period may be shortened. Should Agora exercise the Call Option, the purchase price of the Callable Shares for Agora will be determined on the basis of the formula set out in the Shareholders' Agreement, which takes into account SFS Ventures’s achievement of certain financial indicates. In accordance with the Shareholders' Agreement, Agora will be able to exercise the Call Option, and thereby take control over Eurozet, after obtaining the legally required antitrust permission.
The Shareholders' Agreement provides for Agora’s and SFS Ventures’s obligation of lock up on shares of Eurozet in such a way that:
Furthermore, the Shareholders' Agreement provides for a mechanism whereby, in the event of sale of all shares of Eurozet by SFS Ventures in any shareholders’ exercise of, respectively, the Drag along right or the Tag along right at a price lower than the purchase price of the shares under the Final Agreement, SFS Ventures will have the right to obtain compensation for the shares sold (up to an amount not exceeding 20% of the price of SFS Ventures’s purchase of shares of Eurozet from the Seller under the Final Agreement). For the purposes of the above calculation of the compensation amount, the sale price of shares sold as a result of the Drag along right or the Tag along right will be increased, in particular, by dividends adopted or paid to SFS Ventures until the date of disposal of shares of Eurozet by SFS Ventures.
In order to secure the above-described rights of Agora and SFS Ventures, the Shareholders' Agreement provides for, in particular:
The Shareholders' Agreement does not provide for the possibility of imposing contractual penalties on Agora other than those specified in clause 2 above.
The Shareholders' Agreement has been concluded for a period of 10 years from the date of its conclusion; it will expire earlier in particular in the event of either shareholder’s transfer of all shares held by it in Eurozet to a third party (other than an affiliate of a given shareholder).
The Preliminary Agreement, the Final Agreement and the Shareholders' Agreement are governed by Polish law.
The transaction is in line with the long-term strategy of the Agora Group, in particular with the plan to strengthen the position of the Agora capital group in selected fields of its existing business. The transaction may affect the Agora’s capital group investment plans in non-media businesses.
The acquisition of 40% of shares in Eurozet was financed partially from Agora’s own resources and in the amount of PLN 75.0 million from the overdraft in the current account which will be converted into loan by DNB Bank Polska on the basis of Credit Line Agreement executed on May 27th, 2017 amended by Annex no. 1 executed on May 18, 2018.
Legal basis: Article 17(1) of the Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC – confidential information.