Execution of a conditional agreement creating an obligation to sell the shares in Telefonia DIALOG S.A. with KGHM Polska Miedź S.A. (45/2011)
The Agreement sets out the terms and conditions negotiated by the parties for Netia’s acquisition of the Shares from KGHM. The Shares will be acquired on the basis of a final agreement to be executed after the satisfaction of a condition precedent. Under the Agreement the purchase price for the Shares will amount to PLN 944 million. The purchase price for the Shares includes the Enterprise Value of PLN 890 million and the equivalent of the net cash balance of Dialog of PLN 54 million as at 31 May 2011 (the “locked-box” date). Based on the first six months of 2011, the annualised consolidated EBITDA of Dialog for 2011 is estimated at PLN 139 million. The price will be adjusted by the values specified in the agreement based on the “locked-box” price mechanism: (i) decreased by payments made by Dialog in favour of KGHM in the period between 31 May 2011 and the closing date; and (ii) increased by the interest accruing on the price at the rate of 4.76% per annum from 31 May 2011 until the transaction closing date.
The closing of the transaction is subject to the satisfaction of the condition precedent consisting of Netia obtaining the consent of the antimonopoly authority for the acquisition. The Agreement will be terminated if the condition precedent is not satisfied by 30 June 2012, unless the parties resolve otherwise.
The Agreement contains representations and warranties of KGHM customary for such types of transactions, and specifically regarding the title to the Shares and the condition of Dialog as well as the liability of KGHM for warranty inaccuracy. The terms of the Agreement comply with market practice and are in line with the terms generally applied in such types of agreements.
Dialog is a provider of fixed-line telephony and uses both its own and leased telecommunication networks, mostly in the region of the Lower Silesia voivodship, including fixed-line telephony, broadband internet access and television as well as, based on an MVNO agreement with Polkomtel, mobile telephony and mobile internet access. In consequence of the acquisition of the Shares, Netia will become an indirect owner of shares in two material subsidiaries of Dialog: Petrotel Sp. z o.o. – a provider of fixed-line telephony mostly in the city of Płock; and Avista Media Sp. z o.o. – a customer service centre.
The Agreement constitutes a material agreement for the purposes of the Regulation of the Minister of Finance dated 19 February 2009 regarding current and interim reports published by issuers of securities, and on conditions of considering as equivalent the information required by law of a non-member state (Journal of Laws No. 33, item 259), due to the fact that the estimated value of the agreement exceeds 10% of Netia’s equity.
Moreover, the Management Board of Netia informs that the disclosure of the information concerning the fact of the conduct of negotiations was delayed on September 6, 2011 in compliance with Article 57, section 1 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organized Trading, and Public Companies, because the disclosure thereof could violate the reasonable interests of the issuer since it would constitute the disclosure of information regarding negotiations conducted by the issuer or circumstances related therewith, the disclosure of which to the public could adversely impact the course or the outcome of the negotiations.
The financial and operating results forecast of Netia for the financial year 2011 remain unchanged and do not take account of an effect of a potential closing of the transaction as early as in 2011. The prevailing mid-term forecast of Netia remains unchanged until the closing of the transaction, whereafter this forecast will be revised. A pro forma effect of the transaction on the Netia group's operations is disclosed in a presentation available on Netia's website.
Legal basis: §5, section 1.3 and §9 of the Regulation of the Minister of Finance dated 19 February 2009 regarding current and interim reports published by issuers of securities, and on conditions of considering as equivalent the information required by law of a non-member state (Journal of Laws No. 33, item 259) and Article 56, section 1.2 and Article 57, section 3 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organized Trading, and Public Companies.
Teleconference regarding the take over of Telefonia Dialog
Netia will hold a teleconference regarding the transaction of acquisition of Telefonia Dialog on Monday, 3 October 2011, at 11.00 a.m. Warsaw time. The dial-in numbers for the teleconference are: (UK) +44 20 3003 2666 / (USA) +1 212 999 6659. A telephone record of the teleconference will be available soon after the completion thereof at: (UK) +44 20 8196 1998, dial-in code: 8271789#. The audio record of the teleconference will also be placed on Netia’s website dedicated to investors at www.inwestor.netia.pl. Additionally, a presentation concerning the above transaction is already available on Netia’s website at www.inwestor.netia.pl.