STATEMENT OF THE BOARD OF DIRECTORS OF RCS MEDIAGROUP S.P.A.

Transcription

1 STATEMENT OF THE BOARD OF DIRECTORS OF RCS MEDIAGROUP S.P.A. pursuant to Article 103, paragraphs 3 and 3-bis, of Legislative Decree No. 58 of 24 February 1998, as subsequently amended and supplemented, and Article 39 of the Consob Regulation adopted by Resolution No of 14 May 1999, as subsequently amended and supplemented, relating to the VOLUNTARY PUBLIC TAKEOVER OFFER ON ALL OUTSTANDING SHARES (PTO) LAUNCHED BY INTERNATIONAL MEDIA HOLDING S.P.A. pursuant to Articles 102 and 106, paragraph 4, of Legislative Decree No. 58 dated 24 February 1998, as subsequently amended and supplemented 1

2 Table of contents DEFINITIONS... 3 INTRODUCTION Description of the meeting of the Board of Directors of June Attendees of the meeting of the Board of Directors Specification of own or third party interest relating to the PTO Documents examined Outcome of the meeting of the Board of Directors Useful data and elements for understanding the PTO Evaluations of the Board of Directors of the PTO and the fairness of the PTO Price Evaluations of a business and corporate nature Evaluation on the fairness of the PTO Price The Condition for the Repayment of Loans, the Condition for Change of Control and their waiver Inaccuracies contained in the PTO Offer Document Independent Directors' Opinion on the PTO Indication regarding the participation of members of the Board of Directors in negotiations for completing the transaction Update of information available to the public and disclosure of significant events pursuant to Article 39 of the Issuers Regulations Information on significant events subsequent to the approval of the last financial statements or the last periodic interim accounting statements published Information on recent performance and outlooks of the Issuer, when not reported in the PTO Offer Document Restructuring the RCS Group debt arising from the Loan Agreement Effects of the PTO s successful outcome on the employment levels of RCS and on the location of production sites Conclusions of the Board of Directors

3 DEFINITIONS Co-Investment Agreement The agreement called the Co-Investment Agreement signed on 16 May 2016 by and between DI. VI. Finanziaria, Diego Della Valle & C., Mediobanca, UnipolSai Assicurazioni (including on behalf of UnipolSai Finance), Pirelli and International Acquisitions Holding, communicated to the market via joint press release of 16 May Independent Directors The independent directors of RCS, pursuant to Article 147-ter, paragraph 4, of the Consolidated Finance Act (TUF) and Article 3 of the Corporate Governance Code of listed companies in force at the Issuer s Statement Date who have contributed to the preparation of the Independent Directors' Opinion on the PTB. Current Shareholders DI. VI. Finanziaria, Diego Della Valle & C., Mediobanca, UnipolSai Assicurazioni, UnipolSai Finance and Pirelli. Delegated Capital Increase The share capital increase of RCS, for payment and divisible and up to a maximum of EUR 200,000,000, object of the mandate granted by the Issuer s extraordinary shareholders meeting on 16 December 2015 to the Board of Directors, to be performed by 30 June Shares of Current Shareholders The 117,927,168 RCS Shares corresponding, at the date of the PTO Offer Document, to approximately 22.60% of the share capital of the Issuer which, as specified in the PTO Offer Document, are held by the Current Shareholders and will be subject to contribution in kind in International Media Holding in the event of a successful PTO. Shares Covered in the PTO A maximum of 403,937,789 RCS shares covered in the PTO (including the 4,575,114 treasury RCS Shares in the RCS Portfolio, corresponding, on the date of the PTO Offer Document, to approximately 0.877% of the share capital of the Issuer), which, on the date of the PTO Offer Document, is about 77.40% of the share capital of the Issuer, and therefore equal to all the RCS shares net of the Shares of the Current Shareholders. RCS Shares The 521,864,957 RCS ordinary shares, with no par value, listed on the Mercato Telematico Azionario, corresponding to the entire share capital of the Issuer on the date of the Issuer s Statement. Financing Banks Intesa Sanpaolo S.p.A., BNP Paribas Italian Branch, Banca Popolare Commercio e Industria S.p.A., Banca Popolare di Bergamo S.p.A., UniCredit S.p.A., Banca Popolare di Milano S.c. a r.l. and Mediobanca, as parties of the Loan Agreement. 3

4 Cairo Communication Cairo Communication S.p.A., incorporated under Italian law, with registered office in Milan, at via Tucidide 56, tax code, VAT number and registration in the Business Register of Milan number , whose ordinary shares are listed on the MTA STAR Segment. Citi Citigroup Global Markets Limited, with registered office at Citigroup Centre, Canada Square, London E14 5HS, appointed on 22 April 2016 as financial advisor for RCS, for the purposes of preparing the Issuer s Statement on the PEO and later also for the purposes of the Issuer s statement by integration of the mandate on 8 June Issuer s Statement This statement prepared pursuant to Article 103, paragraphs 3 and 3-bis of Consolidated Financial Act and Article 39 of the Issuers Regulations, approved by the Board of Directors at a meeting held on 16 and 17 June Statement on the PTO The announcement made by the IMH Shareholders on 16 May 2016, according to Article 102, paragraph 1 of Consolidated Financial Act and Article 37, paragraph 1, of the Issuers Regulations concerning the agreement reached between them to launch the PTO through a company incorporated under Italian law at that time in the process of being established, later identified as International Media Holding. Statement on the PEO The announcement made by Cairo Communication on 8 April 2016, according to Article 102, paragraph 1 of Consolidated Financial Act and Article 37, paragraph 1, of the Issuers Regulations concerning the decision to launch the PTO. Condition for Change of Control The Condition for Effectiveness of the PTO described in paragraph A.2ii.(a) Section A of the PTO Offer Document. Condition for the Repayment of Loans The Condition for Effectiveness of the PTO described in paragraph A.2ii.(b) Section A of the PTO Offer Document. Conditions for Effectiveness of the PTO Each of the conditions to which the effectiveness of the PTO is subject as indicated in Paragraph A.2, of the PTO Offer Document. Loan Agreement The loan agreement signed by RCS, on 14 June 2013, with the Lender Banks, as subsequently amended on 11 August PTO Price The price offered by International Media Holding in the PTO, equal to EUR 0.70 for each Share Covered in the PTO which will be acquired in the accession to the PTO and purchased by International Media Holding, minus the amount of any dividend per RCS Share for which the relevant corporate bodies of RCS must approve the distribution and actually pay after the Date of the PTO Offer Document but before the 4

5 date of paying the PTO Price (i.e., 22 July 2016, unless extended). Date of the Issuer s Statement 17 June 2016, date of approval of the Issuer s Statement by the Board of Directors. Date of the Statement on the PTO 16 May 2016, date of the announcement of the Statement on the PTO by the IMH Shareholders to the public and to Consob. Date of the Statement on the PEO 8 April 2016, date of the announcement of the Statement on the PEO by Cairo Communication to the public and to Consob. PTO Offer Document Date 11 June 2016, the publication date of the PTO Offer Document pursuant to Article 38 of the Issuers Regulations. DCF The methodology for evaluating the intrinsic value of a share based on the value of future estimated discounted cash flow (discounted cash flow). Delisting The delisting of RCS Shares from the Stock Market (MTA). Diego Della Valle & C. Diego Della Valle & C. S.r.l., an Italian company with registered office in Sant Elpidio a Mare (FM), Strada Settecamini 116, registration number in the Business Register of Fermo, Tax ID and VAT No DI. VI. Finanziaria DI. VI. Finanziaria di Diego Della Valle & C. S.r.l., Italian company with registered office in Sant Elpidio a Mare (FM), Strada Settecamini 116, registration in the Business Register of Fermo, tax code and VAT number PTO Offer Document The offer document prepared by International Media Holding pursuant to Article 102 of Consolidated Financial Act and the implementation provisions in the Issuers Regulations Issuer or RCS RCS MediaGroup S.p.A., a company under Italian law, with its registered office located in Milan, at via Angelo Rizzoli 8, tax code, VAT code and registration in the Business Register of Milan number , whose RCS Shares are listed on the Stock Market (MTA). Independent Expert Professor Roberto Tasca, appointed on 13 May 2016, as the independent expert of the Board of Directors, pursuant to Article 39, paragraph 1, section d), of the Issuers Regulations, for the purpose of preparing the fairness opinion on the price for the PEO and subsequently instructed, on 20 May 2016, also to issue the fairness opinion on the PTO Price. 5

6 Trading Day Each day of trading on the Italian regulated markets according to the trading calendar set annually by Borsa Italiana S.p.A. RCS Group RCS and companies directly or indirectly controlled thereby. International Acquisitions Holding International Acquisitions Holding S.à r.l., incorporated under Luxembourg law, having its registered office in Luxembourg (Grand Duchy of Luxembourg), Avenue J.F. Kennedy 51, registered in the Registre de Commerce et des Sociétés of Luxembourg under number B 206,234, indirectly controlled by Investindustrial Fund VI L.P., a fund managed by the company incorporated under English law Investindustrial Advisors Limited authorised by, and subject to the supervision of, the Financial Conduct Authority of the United Kingdom. International Media Holding or IMH International Media Holding S.p.A., a company under Italian law, with registered office in Milan, at Via Mascagni 14, tax code, VAT number and registration in the Business Register of Milan number , formed by the IMH Shareholders to launch the PTO under Articles 102 and 106, paragraph 4, of Consolidated Financial Act as well as the applicable provisions contained in the Issuers Regulations. Mediobanca Mediobanca Banca di Credito Finanziario S.p.A., a company incorporated under Italian law, with registered office in Milan, at Piazzetta Enrico Cuccia 1, registration in the Business Register of Milan, tax code and VAT number Mercato Telematico Azionario or MTA The Mercato Telematico Azionario organised and managed by Borsa Italiana S.p.A. PTO The voluntary public takeover offer for all outstanding Shares Covered by the PTO launched by International Media Holding pursuant to Articles 102 and 106, paragraph 4, of Consolidated Financial Act as well as the applicable provisions contained in the Issuers Regulations, as described in the PTO Offer Document. In the PTO Offer Document, IMH stated that the PTO qualifies as a competing offer against the PEO under Articles 103, paragraph 4, letter d) of Consolidated Financial Act and 44 of the Issuers Regulations. PEO The voluntary public exchange offer for all outstanding RCS Shares launched by Cairo Communication under Article 102 and 106, paragraph 4, of the Consolidated Financial Act as well as the applicable provisions contained in the Issuers Regulations, as described in the offer document prepared by Cairo Communication according to Article 102 of the Consolidated Financial Act and implementing provisions contained in the Regulations, published on 28 May

7 Independent Directors' Opinion on the PTO The reasoned opinion containing the evaluations on the PTO and the fairness of the PTO Price, approved on 16 June 2016, prepared by the Independent Directors, pursuant to Article 39-bis of the Issuers Regulations. Shareholders Agreement The shareholders agreement annexed to the Co-Investment Agreement that, as stated in the PTO Offer Document, will be entered into by and between DI. VI Finanziaria, Diego Della Valle & C., Mediobanca, UnipolSai Assicurazioni, UnipolSai Finance, Pirelli and International Acquisitions Holding if the PTO is successful. RCS Business Plan The RCS business plan approved by the Board of Directors on 18 December 2015 and disclosed to the market on 21 December Pirelli Pirelli & C. S.p.A., a company incorporated under Italian law, with registered office in Milan, at Viale Piero e Alberto Pirelli 25, registration in the Business Register of Milan, tax code and VAT number , with sole shareholder and subject to the direction and coordination of Marco Polo International Italy S.p.A. Procedure The Procedure regarding the execution of relevant transactions or where a director has an interest in relation thereto adopted by RCS in January IMH Shareholders DI. VI. Finanziaria, Diego Della Valle & C., Mediobanca, UnipolSai Assicurazioni (including on behalf of UnipolSai Finance), Pirelli and International Acquisitions Holding. RCS Refinancing Terms and Conditions The main terms and conditions of the term sheet relating to the restructuring of the Loan Agreement, as disclosed to the market by the RCS statement on 18 May UniCredit UniCredit S.p.A., with headquarters in Milan, at Piazza Gae Aulenti 3, appointed on 26 April 2016 as financial advisor for RCS, for the purposes of drafting the Issuer s Statement on the PEO and later also for the purposes of the Issuer s Statement by integration of the mandate on 9 June UnipolSai Assicurazioni UnipolSai Assicurazioni S.p.A., a company incorporated under Italian law, with registered office in Bologna, at Via Stalingrado 45, registration in the Business Register of Bologna, tax code and VAT number UnipolSai Finance UnipolSai Finance S.p.A., incorporated under Italian law, with registered office in Bologna, at Via Stalingrado 45, registration in the Business Register of Bologna, tax code and VAT number

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9 INTRODUCTION A. The PTO launched by International Media Holding On 16 May 2016, pursuant to Article 102, paragraph 1 of Legislative Decree No. 58 of 24 February 1998 as subsequently amended and supplemented, ( Consolidated Finance Act ) and Article 37 paragraph 1 of the Consob Regulation adopted by Resolution No of 14 May 1999, as subsequently amended and supplemented (the Issuers Regulations ), by the Statement on the PTO, the IMH Shareholders notified Consob and the market that they had reached an agreement to launch a voluntary a voluntary takeover offer, pursuant to Articles 102 and 106, paragraph 4, of Consolidated Financial Act, concerning all the outstanding RCS Shares in the amount of 521,864,957, minus the total of 117,927,168 RCS Shares which, on the basis of the Statement on the PTO, were held by the Current Shareholders on the date of the Statement on the PTO, through an Italian company at that time in the process of being established, and later identified as International Media Holding. In the Statement on the PTO, IMH stated that the PTO is configured as a competing offer against the PEO under Articles 103, paragraph 4, letter d) of Consolidated Financial Act and 44 of the Issuers Regulations. The Statement on the PTO was sent to representatives of the Issuer s employees, pursuant to Article 102, paragraph 2, of Consolidated Financial Act. The Statement on the PTO, announced, among other things, the signing of the Co-Investment Agreement by and between the IMH Shareholders, with the annexed Shareholders Agreement that, as indicated in the PTO Offer Document, will be signed by the Current Shareholders and International Acquisitions Holding if the PTO is successful. As stated in the PTO Offer Document (see Introduction), the provisions set forth in the Co-Investment Agreement and in the Shareholders Agreement which qualify as shareholding agreements were notified to Consob and the market pursuant to Article 122 of Consolidated Financial Act and its implementing rules in the Issuers Regulations dated May On 20 May 2016, the IMH Shareholders filed the PTO Offer Document with Consob pursuant to Article 102, paragraph 3, of Consolidated Financial Act and Article 37-ter of the Issuers Regulations. On 10 June 2016, Consob approved the PTO Offer Document pursuant to Article 102, paragraph 4, of Consolidated Financial Act and, on 11 June 2016, International Media Holding published the PTO Offer Document. According to what is indicated in the PTO Offer Document: - the PTO covers a maximum of 403,937,789 RCS Shares (including 4,575,114 treasury shares in the RCS portfolio, corresponding as of the date of the PTO Offer Document to approximately 0.877% of the Issuer s share capital) representing approximately 77.40% of the share capital of RCS, and therefore representing all the ordinary shares of the company net of the Shares of the Current Shareholders; - the number of Shares Covered in the PTO could decrease if, during the PTO accession period, IMH, the Current Shareholders, or International Acquisitions Holding were to acquire Shares Covered in the PTO outside the PTO, in accordance with the provisions of Article 41, paragraph 2 and Article 42, paragraph 2 of the Issuers Regulations; - The Shares Covered in the PTO must be freely transferable to IMH and must be free from any in rem, mandatory or personal restrictions and encumbrances whatsoever; - the PTO is addressed to all the shareholders of the Issuer, without discrimination and under equal conditions; - the PTO is launched exclusively in Italy, as the Shares Covered in the PTO are listed on the MTA; - the PTO has not been, nor will be, either launched or circulated in the United States of America, Canada, Japan or Australia, or any other country in which the PTO is not permitted on account of the lack of authorisation from the competent authorities, or using means of international or national communication or trade in those countries (including, by way of 9

10 example, the postal network, fax, telex, , telephone and internet) or any structure of any of the financial intermediaries in these countries, or through any other means; - the PTO Offer Document does not constitute, nor may it be construed as, an offer of financial instruments addressed to persons residing in the United States of America, Canada, Japan or Australia, as well as any other country in which the PTO is not permitted without the authorisation of the competent authorities or other requirements to be fulfilled by IMH. * * * * * B. The PEO launched by Cairo Communication On 8 April 2016, pursuant to Article 102, paragraph 1 of Consolidated Financial Act and Article 37, paragraph 1 of the Issuers Regulations, by the Statement on the PEO, Cairo Communication notified Consob and the market of its decision to launch a voluntary exchange offer pursuant to Articles 102 and 106, paragraph 4, of Consolidated Financial Act, for all the outstanding RCS Shares at a price of 0.12 newly issued ordinary shares of Cairo Communication offered in exchange for each RCS Share tendered to the PEO. On 28 April 2016, Cairo Communication filed the PEO Document with Consob pursuant to Article 102, paragraph 3, of Consolidated Financial Act and Article 37-ter of the Issuers Regulations. On 28 May 2016, Consob approved the Offer Document relating to the PEO pursuant to Article 102, paragraph 4, of Consolidated Financial Act and, on the same date, Cairo Communication published the offer document relating to the PEO. On 9 and 10 June 2016, the RCS Board of Directors (the Board of Directors ) met to examine the PEO and approve the statement prepared pursuant to Article 103, paragraphs 3 and 3-bis, of Consolidated Financial Act, and Article 39 of the Issuers Regulations relating to the PEO. In that statement, published on 10 June 2016, the Board of Directors issued a non-favourable opinion with respect to the PEO and considered the price offered in the PEO for RCS Shares not fair. Please refer to the aforementioned statement of the Board of Directors published, together with the annexes, on the Issuer s website at the address for further observation of the Board of Directors regarding the PEO. * * * * * Given that, (i) as explained in Paragraph 1.2, one of the administrators of RCS is both a non-executive and independent director of Mediobanca (one of the IMH Shareholders) and (ii) according to Article 101-bis, paragraph 4-bis, letter d) of Consolidated Financial Act, in any case, a company and its directors qualify as a person acting in concert, the PTO falls within the scope of application of Article 39-bis, paragraph 1, letter a), point 4) of the Issuers Regulations and, are therefore subject to that provision. Therefore, on 16 June 2016, before approval of the Issuer s Statement, the Independent Directors issued a reasoned opinion containing the evaluations of the PTO and the fairness of the PTO Price as described infra (Paragraph 4). On 16 and 17 June 2016, the Board of Directors met to review the PTO and approve the Issuer s Statement which, in accordance with Article 103, paragraphs 3 and 3-bis of Consolidated Financial Act and Article 39 of the Issuers Regulations, contains all the relevant information for assessing the PTO and the evaluation thereof by the Board of Directors together with the assessment of the effects that the possible successful outcome of the PTO will have on the interests of the enterprise and on the employment levels and the location of production sites. For a complete and full understanding of the prerequisites, terms and conditions of the PTO, reference must be exclusively made to the PTO Offer Document. This Issuer s Statement, thus, may not in any way be meant as replacing the PTO Offer Document and does not constitute in any way, nor can it be construed as, a recommendation to accede or not to accede to the PTO and is not a substitute for each shareholder s judgement in connection therewith. 1. Description of the meeting of the Board of Directors of June

11 1.1 Attendees of the meeting of the Board of Directors The meeting of the Board of Directors begun on 16 June 2016 and continued after suspension on 17 June 2016, which examined the PTO and approved the Issuer s Statement according to Article 103, paragraphs 3 and 3-bis of Consolidated Financial Act and Article 39 of the Issuers Regulations, was attended in person or by conference call, the following Board members: Laura Cioli * Chief Executive Officer Gerardo Braggiotti * Independent Director Paolo Colonna ** Independent Director Teresa Cremisi * Independent Director Dario Frigerio ** Independent Director Mario Notari *** Independent Director * Appointed from the list presented by the Mediobanca Banca di Credito Finanziario S.p.A. shareholders, filed also on behalf of the other parties to the agreement executed and communicated to the market on 27 March 2015 (Fiat Chrysler Automobiles N.V., DI. V.I.. Finanziaria Diego Della Valle & C. S.r.l. and Diego Della Valle & C. S.r.l., Pirelli & C. S.p.A. and Intesa Sanpaolo S.p.A.). ** Appointed from the list presented jointly by certain institutional investors. *** Appointed by the shareholders of RCS on 16 December 2015 following the proposal of the Board of Directors in place of Mr. Peter Scott Iovane, who had been appointed from the list sub note 1 and who later ceased holding office. Mr Thomas Mockridge s absence was excused. The Chairman of the Board of Directors, Maurizio Costa, and Director Stefano Simontacchi did not take part in the aforementioned meeting of the Board of Directors for the reasons set out in Paragraph 1.2. Therefore, in accordance with Article 12, second paragraph, of the RCS Articles of Association, the meeting was chaired by the oldest director from time to time present. All the Statutory Auditor were present by conference call (having the Statutory Auditor Gabriella Chersicla attended the meeting from the restarting of the meeting on 17 June 2016). 1.2 Specification of own or third party interest relating to the PTO During the meetings of the Board of Directors of 13 and 21 April 2016, Director Stefano Simontacchi declared to have an indirect interest in connection with the PEO, reminding the attendees that he is a partner in the Bonelli Erede law firm, which acts as General Counsel to Cairo Communication in the PEO. The Board of Directors meeting held on 21 April 2016 therefore approved the application of the Procedure, according to which the director having a personal interest or acting in a third party s interest, even potentially or indirectly, must leave the Board meetings during the discussion of the matters concerning such interest. During the Board Meeting held on 20 May 2016, following the announcement of the PTO, the Chairman of the Board of Directors, Maurizio Costa, stated that he was a member of the Board of Directors of Mediobanca, one of the IMH Shareholders, holding the office of non-executive and independent director. The Chairman of the Board of Directors noted and recorded, according to the Procedure, the requirement of absentia at the board meetings during the examination of the PTO as 11

12 well as the PEO. At the same board meeting on 20 May 2016, Director Stefano Simontacchi stated that he was also continuing in abstaining from board meetings during the examination of the PTO. On 20 May 2016, the Board of Directors therefore acknowledged the statements of Chairman Costa and Director Simontacchi and resolved that (i) the Procedure applied with regard to them in relation to both public offers concerning the RCS shares, and (ii) pursuant to Article 12, paragraph two, of the RCS Articles of Association, during the examination of the public offers concerning the RCS shares, the meeting of the Board of Directors should be chaired by Teresa Cremisi or, in the case of her absence or impediment, by the oldest board member. During the meeting of the Board of Directors on 1 June 2016, the Chief Executive Officer Laura Cioli stated that, on 22 December 2015, she had purchased 400,000 RCS Shares on the market at a price per share of EUR , pointing out that this purchase - disclosed to the market under Article 152-octies of the Issuers Regulations - was made as a gesture of good faith with regard to RCS and as proof of her commitment and exclusive interest in carrying out her duties as CEO for the valuation of the Issuer, a gesture fully aligned with the interests of the Issuer and all its shareholders. On 1 June 2016, having taken note of the declaration of the CEO, the Board of Directors decided that the Procedure should not apply, having established there was no conflict of interest with that of RCS and to avoid having to examine and evaluate the offers launched for the Issuers shares without the contribution of the CEO. It should also be noted that on 22 December 2015, with the same intention as the CEO, the Chairman of the Board of Directors, Maurizio Costa, bought on the market 400,000 RCS shares on the market at a price per share of EUR , as disclosed to the market pursuant to Article 152-octies of the Issuers Regulations. 1.3 Documents examined In its evaluation of the PTO and the PTO Price for the purpose of approving the Issuer s Statement, the Board of Directors examined the following documents: - the Statement on the PTO, in which the IMH Shareholders announced the decision they had reached to launch the PTO through a company incorporated under Italian law, which at that time was still in the process of being established and later identified as International Media Holding. pursuant to Articles 102 and 106, paragraph 4, of Consolidated Financial Act; - The Co-Investment Agreement and annexed Shareholders Agreement; - the PTO Offer Document, as approved by Consob on 10 June 2016 and sent to RCS on 11 June 2016; - the fairness opinion issued on 16 June 2016 by the Independent Expert, pursuant to Article 39, paragraph 1, letter d), of the Issuers Regulations; - the PTO Opinion of the Independent Directors in accordance with Article 39-bis of the Issuers Regulations; - the fairness opinion issued on 17 June 2016 by Citi; - the fairness opinion issued on 17 June 2016 by Unicredit. The Board also has taken into account the documentation related to the PEO reviewed for the purposes of preparing the statement under Article 103, paragraphs 3 and 3-bis of Consolidated Financial Act and Article 39 of the Issuers Regulations concerning the PEO, published on 10 June Outcome of the meeting of the Board of Directors On 17 June 2016, the Board of Directors unanimously approved this Issuer s Statement. 12

13 2. Useful data and elements for understanding the PTO As explained in the PTO Offer Document, the PTO is a voluntary public takeover offer launched by International Media Holding, in accordance with Articles 102 and 106, paragraph 4, of Consolidated Financial Act, for the Shares Covered by the PTO. According to Section E of the PTO Offer Document, the PTO Price is equal to 0.70 Euros, minus the amount of any dividend per RCS Share for which the relevant corporate bodies of RCS might approve the distribution and approve payment thereof after the date of the PTO Offer Document, but before the date on which the PTO Price is paid (i.e., 22 July 2016, save for possible extensions thereof), and will be paid according to the schedule and procedures set out in Paragraphs F.5 and F.6, Section F of the PTO Offer Document. As stated in the PTO Offer Document (see Paragraph F.5, section F), no payment of interest on the PTO Price will be made between the PTO subscription date and the respective payment date. The effectiveness of the PTO is subject to certain conditions specified in Paragraph A.2, Section A, of the PTO Offer Document being met (the Conditions for Effectiveness of the PTO ), which IMH has reserved the right to waive (or, depending on the case, in relation to which it declared its intention to waive them upon occurrence of certain conditions). Also, International Media Holding may modify the terms of these conditions, within the limits and under the conditions laid down in the Issuers Regulations. In this regard, reference is made to Section A, Paragraphs A.2 and A.2-bis and Section F, Paragraphs F.1.2 and F.1.2-bis of the PTO Offer Document; As indicated in Paragraph A.9 of the PTO Offer Document, the PTO is not aimed at Delisting. For a complete and full understanding of the PTO terms and conditions, reference must be made to the PTO Offer Document, and, in particular, to the Paragraphs indicated below in the same PTO Offer Document: - Section A Warnings ; - Section B, paragraph B.1 Information concerning the Offeror ; - Section C Classes and quantities of financial instruments which are the subject of the Offer ; - Section D Issuer s financial instruments held by the Offeror, including via trust companies or third parties ; - Section E Unit price for securities and related rationale ; - Section F Procedures and conditions for subscription to the Offer, Price payment dates and methods and the return of Shares ; - Section G Methods for financing, guarantees of correct performance and future plans of the Offeror ; - Section H Possible agreements and transactions between the Offeror, persons acting in concert with it and the Issuer or the major shareholders or members of the management and control bodies of the same Issuer ; - Section K, Paragraph K. 2 Essential information under Article 130 of the Issuers Regulations relating to the Co-Investment Agreement and Shareholders Agreement. 3. Evaluations of the Board of Directors of the PTO and the fairness of the PTO Price 3.1. Evaluations of a business and corporate nature The Board took note of the reasons for the PTO and the future programs of IMH described in Section G.2 of the PTO Offer Document. In this regard, the Board considered it necessary to point out to the RCS shareholders the following. 13

14 As stated in Paragraph G.2.1, Section G, of the PTO Offer Document, IMH has launched a PTO with a strong strategic value which, thanks to the major financial resources dedicated to organic growth of the Issuer achieved through external business lines, will enable RCS to resume a positive path of growth. As stated in Paragraph G.2.1, Section G, of the PTO Offer Document, this transformation will take place upon the Issuer maintaining, at the same time, the status of a listed company, and will leverage the quality and leadership of the products and editorial content of the RCS Group to create a media platform of major importance at the European level. Specifically, the Board of Directors noted that in the PTO Offer Document (see Paragraph G.2.1, Section G), IMH has indicated that it intends to support and accelerate the restructuring process positively initiated by the current management of the Issuer, as well as support the management in pursuing the objectives of long-term value creation. More specifically, IMH referred to the main features of the RCS business plan and namely: a) efficiency; b) digital revenue development; c) reinforcement of business news; and d) disposal of noncore activities, as better identified in the RCS business plan, which are consistent with the RCS business plan and constitutes an incremental opportunity. In this regard, the Board of Directors noted that IMH has proposed a boost for development through a significant investment policy in order to accelerate the growth process of the RCS Group, also through external business lines (see Paragraph G.2.1, section G), in the following activities: - Sport business: in addition to developing new formats internally, IMH has also referred to the acquisition of international companies engaged in handling events or sports rights; - adjacent business: i.e., the exploitation of expertise gained in the relevant sector, content production, relations with advertisers and communication to be made available to the organisation and promotion of professional events such as conferences, exhibitions and fairs, including through the acquisition of companies operating in this field; - business News consolidation: in light of the dynamics of the sector (for example the sharp reduction in disseminating printed product and the resulting excess capacity), IMH considers that the Issuer may represent a centre of aggregation both in Italy and abroad, and that further expansion of business News, even in regions not currently penetrated by the Group, such as the English-speaking countries, could be pursued through the development of editorial content focused on Made-in-Italy to promote Italian excellence in the world. The Board of Directors considered the proposals and elements mentioned above consistent with the strategy already undertaken with the strategic positioning of the RCS Group, and pointed out that the RCS Business Plan already provides, in the medium term, the evaluation of further strategic development opportunities, even if such investments are not included in the economic and financial projections for In this regard, the Board of Directors took note of what is specified in the PTO Offer Document (see Paragraph G.2.1, Section G) and, with respect to the Co-investment Agreement, of what is specified in Paragraph G.2.3, Section G, of the PTO Offer Document, according to which the Current Shareholders and International Acquisitions Holding: (aa) with reference to the aforementioned growth policies, committed to furnish IMH with additional financial resources to underwrite its share of the Delegated Capital Increase up to 150 million Euros; and (bb) may also consider investing more financial resources, in any case depending on any proposals of the Board of Directors, in order to allow the creation of one of the major international media groups. These plans of IMH and the commitments undertaken may give the Issuer a concrete opportunity to search and pursue new strategic investments with a view to increasing value in the interest of all the shareholders. * * * The Board of Directors took note of IMH s decision to maintain, irrespective of the outcome of the PTO, RCS's status as a listed company, taking the necessary steps to re-establish the free float. 14

15 The Board of Directors is of the opinion that the above decision must be supported because maintaining the status of listed company would represent a great asset to the RCS Group. The Board of Directors took note of the provisions under the Shareholders Agreement on the governance provisions indicated therein. In this regard, the Board of Directors noted that, based on the Shareholders Agreement, the IMH Shareholders, in the event of successful outcome of the PTO, will submit for approval to the Shareholders Meeting certain amendments to the Articles of Association, which among other things would result in the first minority list being represented in the Board by one director only, while under the current Articles of Association, one third of the directors must represent, pro quota, the minority list (see Paragraph G.2.6., Section G of the PTO Offer Document) Evaluation on the fairness of the PTO Price Main information on the PTO Price contained in the PTO Offer Document The Board of Directors noted that, according to Section E of the PTO Offer Document, the PTO Price is equal to 0.70 Euros, minus the amount of any dividend per RCS Share for which the relevant corporate bodies of RCS might approve the distribution and approve payment thereof after the date of the PTO Offer Document, but before the date on which the PTO Price is paid (i.e., 22 July 2016, save for possible extensions thereof). The PTO Offer Document (see Paragraph E.1, Section E.) then pointed out that, if the payment date of the PTO Price should fall after the date of the actual payment of dividends that might be approved by the relevant corporate bodies of RCS, the PTO Price that IMH will pay on that payment date will be reduced by the amount of the dividend per share paid. As stated in the PTO Offer Document (see Paragraph E.1, Section E), the PTO Price was determined by the Current Shareholders and International Acquisitions Holding through an evaluation conducted autonomously, without the aid of expert opinions or specific documents, also taking into account the following elements: a) the official price per RCS Share on the Trading Day prior to the Date of the Statement on the PTO; b) the PEO Price; c) the daily weighted average price per RCS Share, on the basis of the official price, at intervals of 1 month, 3 months, 6 months and 12 months before the date of the Statement on the PTO; d) the official price per RCS share on the Trading Day prior to the Date of the PEO announcement; As indicated in Paragraph E.1.1, Section E, of the PTO Offer Document, the official price per RCS Share at the close of 13 May 2016 (last Trading Day prior to the Date of the Statement on the PTO) was EUR and, with respect to that amount, the PTO Price incorporates a premium equal to 17.0%. Moreover, as indicated in Paragraph E.1.2, Section E, of the PTO Offer Document, based on the official price of the ordinary shares of Cairo Communication recorded on 13 May 2016 (last Trading Day prior to the Date of the Statement on the PTO), the PEO Price expresses a value of approximately EUR for each RCS Share, and therefore, on the same reference date, the PTO Price incorporates a 31.6% premium compared to the PEO price. As indicated in Paragraph E.2, Section E, of the PTO Offer Document, the total maximum value of the PTO, in the event that all 403,937,789 Shares Covered in the PTO are tendered to the PTO, amounts to EUR 282,756, For more information about the prices provided by IMH with reference to the PTO Price, please refer to the Paragraphs from E.1 to E.6, Section E, of the PTO Offer Document Main observations of the Board of Directors 15

16 The Board acknowledges what is reported in the PTO Offer Document and the comments made by the Independent Expert, by Citi and UniCredit in relation to the methods used in evaluating the fairness of the PTO Price and, preliminarily, with reference to the content of Paragraph E.1., Section E of the PTO Offer Document, with reference to the determination of the PTO Price, it specifies that on the Issuer's Statement Date no payment of dividends has been resolved upon or scheduled between the PTO Offer Date and the currently scheduled date of payment of the PTO Price (i.e., 22 July 2016). The Board of Directors wants to further point out the following considerations. a) RCS assessment according to the DCF method As noted, the Issuer has presented the RCS Business Plan to the market; this business plan provides extensive information and based thereupon the market has been provided with the basic elements for formulating an assessment based on the DCF method. In this regard, the Board stressed the importance for the market of information on the RCS value determined using the DCF method, based on the financial and economic outlooks of the Issuer, referring to the fairness opinion of the Independent Expert, of Citi and UniCredit for its considerations on the Issuer s value resulting from applying this method. b) Limits on the use of the method of stock prices in light of certain factors that have influenced RCS stock performance It should be noted that the average stock prices shown for the different time intervals on the date of the Statement on the PTO discounted the effects: of the PEO announcement; of the announcement on 2 March 2016 of the distribution of RCS Shares held by Fiat Chrysler Automobiles; and the perceived uncertainty over the debt renegotiation at that time in progress with the Lender Banks. This is reflected in the fact that the market price of the RCS Shares (i) went down 27.4% between 3 March 2016 (the day after the abovementioned announcement) and 7 April 2016 (the day before the Date of the Statement on the PEO), included, based on the closing prices; during the same period on the Italian market (FTSE Italy All-Share index) there was a reduction of 7.5%; (ii) from 7 April 2016 to 13 May 2016 (last Trading Day prior to the Date of the Statement on the PTO) the RCS Share price increased by 45.8%, based on the closing prices; during the same period the Italian market (FTSE All- Share Italy) recorded a 5% increase. c) Control Premium prices in assessing the RCS Shares As already indicated in the press release published on 20 May 2016, the Board of Directors stressed that the PTO was not agreed with RCS and, in light of the condition on the minimum quantity of accessions referred to in Paragraph A.2, section A, of the PTO Offer Document and the terms of waiver described therein (see Paragraphs A.2 and A.2bis Section A and Paragraphs F.1.2 and F.1.2bis, Section F, of the PTO Offer Document), also believes that the same is legitimately aimed at acquiring control (at least de facto) of RCS. The Board of Directors endorsed the considerations of the financial advisors from Citi and UniCredit and those of the Independent Expert (referred to in Paragraphs and of the Issuer s Statement) regarding the opportunity to assess the fairness of the PTO Price also in relation to a control premium. The payment of a control premium in line with what pointed out in connection with the sample of takeover offers taken into account by the Independent Expert would be all the more justified taking into account the fact that, if the PTO is successful, the competitiveness of the Issuer would disappear or, in any event, it would be considerably reduced. Referring to the description of the fairness opinion of the Independent Expert, Citi and UniCredit contained in subsequent Paragraphs and 3.2.4, the Board noted that the PTO Price incorporates a premium compared to the weighted average for traded volumes in the different time intervals considered for the assessment, (except for the twelve-month period before the Date of the Statement 16

17 on the PEO considered by Citi) the extent of which is generally lower than the average premiums recognised in previous public offers. d) Target Price The PTO Price matches the target price set by the one of the equity research analysts on 7 April 2016 (day before the Date of the Statement on the PEO), while on that date five analysts set a target price for RCS above the PTO Price. It should also be mentioned that on 7 April 2016 the average of six equity research analysts covering the RCS stock equalled EUR 0.81 and the maximum EUR 0.96 per RCS Share. e) Multiples method applied to RCS The Board of Directors, with the support of the financial advisors from Citi and UniCredit, analyzed the results of the multiples analysis of the market prepared by IMH and noted the following: the calculation of multiples of comparable companies, in line with the common market practice, should be carried out in light of future estimates and not on the basis of historical data that do not necessarily reflect the expected future developments, especially in the case of RCS whose performance, considering the minor non-recurring expenses foreseen and the measures of the RCS Business Plan, could be considered significant starting in 2017; additionally, having the figure for the first quarter of 2016 available, which for RCS shows a noticeable improvement over the first quarter 2015 (i.e., EBITDA before non-recurring income and expenses from the period 1 April March 2016 equal to approximately EUR 84 million compared to about EUR 71.8 million for the entire 2015 financial year), the multiples based on the period 1 April March 2016 could have been used; therefore, other conditions being equal, the RCS multiples for that period would be lower than what was reported by IMH; the multiples method of comparable companies does not, in any case, allow considering the control premium; additionally, the comparison of RCS multiples to the multiples of comparable companies should take into account the significant expected growth in RCS performance and its significant tax assets Methods and summary of the findings of the Independent Expert On 20 May2016, RCS, appointed Professor Roberto Tasca, who had already been tasked with issuing the fairness opinion on the PEO price, as the independent expert pursuant to Article 39, paragraph 1, letter d), of the Issuers Regulations to issue the fairness opinion of the Independent Expert on the PTO Price. The Independent Expert was identified following a selection procedure performed by the Issuer on the basis of predetermined criteria including professional skills, fee required and absence of economic, capital and financial relationships (current or held in the last three years) that might affect their independence with respect to: (i) RCS and the companies or other entities controlled thereby, (ii) the IMH Shareholders, Cairo Communication and its financial advisors in, respectively, the PTO and PEO, as well as the parties that control them, the companies or other entities controlled by them and companies or other entities under common control and (iii) the directors of the company or other entities referred to in points (i) and (ii) above. The Independent Expert issued a fairness opinion on 16 June The Independent Expert has based his fairness opinion on a multi-stage process. First, the Independent Expert determined the range of fundamental values through the unlevered discounted cash flow method (the DCF ), based on the business plan disclosed by RCS 17

18 to the market on 21 December 2015 (the RCS Business Plan ). According to the Independent Expert, this range represents the main method on which the fairness opinion is based. The Independent Expert has indicated that, based on RCS Business Plan, on an average weighted capital cost of 8.89% (considering a +/- range of 0.50%), and on a g growth rate of 0% (considering a +/- range of 0.50%), the use of the DCF method has yielded a range of values per share between a minimum of EUR 0.80 and a maximum of EUR 1.13, with an average value of EUR The Independent Expert has found that the Offer Price is discounted both with respect to the minimum (- 12.5%) and maximum (-38%) value of the range of values determined through the DCF method. The Independent Expert compared the results obtained through the DCF method with the following evaluation methods: - A first comparison was made between the trade multiples implicitly obtained with the DCF method with respect to the intermediate value and the trade multiples obtained from a sample of comparables selected by the Independent Expert. The Independent Expert has observed that: (i) the trade multiples that are implied in the intermediate value of the DCF method valuation of the RCS business plan are aligned with the multiples calculated with reference to average values of comparables as far as the EBITDA variable is concerned, while a minor value of the volumes and a higher value of the profitability is shown in 2016, which then returns to normal levels over 2018, the end of the RCS Business Plan; and (ii) the implied multiples on revenues and EBITDA net of recurring cost obtained through the DCF method fall within the range of the minimum and maximum multiples of the comparables. The Independent Expert has found that these results support the results obtained applying the main method selected; - Again for control purposes, the Independent Expert has observed that, based on the reference time period for the target price indicated by the analysts and gathered by the Bloomberg database, i.e., from 14 May 2015 to 13 May 2016, the RCS Share range of values obtained with the DCF method represents the minimum and maximum point with reference to the observations of the analysts over the time period of 3, 6 and 12 months. The Independent Expert has also observed that the intermediate value of the DCF corresponds with the target price over a 12 month period. - Finally, also in order to verify what IMH indicated in Section E ( Unit price for financial instruments and explanation thereof ) of the Offer Document, based on the historical stock market data for the period between 14 May 2015 and 13 May 2016 (which can be identified as the Historical series of market prices weighted for volumes of securities traded preannouncement ), the Independent Expert has determined the RCS share s weighted average price over a time span of 12, 6, 3 1 month and 1 day. The values determined for each time period were then controlled based on the historical series of weighed average prices in the period between 30 January 2015 and 29 January 2016 (which can be identified as the Historical series of market prices weighted for non-influenced volumes of securities traded ). This second timeframe has been identified by the Independent Expert based on statistical tests conducted over the daily returns of RCS Ordinary shares in the period 1 January May 2016, in order to identify a period from which to observe prices that were non-influenced by anomalous trends of the RCS share normal returns, based on a market model which uses to the FTMIB 30 Total Return index. This was done in order to identify a time period on which the returns of the RCS shares showed extreme performances, which can be explained in light of price-sensitive events and, on the contrary, to validate the average weighted prices in the non-influenced historical series for each of the time spans indicated in the pre-announcement period. The Independent Expert has then evaluated the weighted average prices determined for each of the time periods defined based on the two historical series of prices indicated above compared to the Price of EUR 0.70, so as to determine the implicit premium (discount) between the two data. This premium (discount) was then compared with the data emerging from a sample of public takeover bids launched in Italy from January 2010 to February 18