8 Dec 2016 11:36
UNOFFICIAL TRANSLATION
Report 29/2016: Information of Powszechny Zakład Ubezpieczeń S.A. on conclusion of a transaction of the purchase of a significant holding of shares in Bank Polska Kasa Opieki S.A by PZU SA acting in a consortium with Polski Fundusz Rozwoju S.A. from UniCredit S.p.A.
The Management Board of Bank Polska Kasa Opieki S.A. with its registered office in Warsaw ("Bank", the "Company"), acting on the basis of Art. 17 sec. 1 of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse 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 (Official Journal of the European Union L of 2014, No. 173, p. 1, as amended, hereinafter referred to as the "MAR"), hereby informs that on 8 December, 2016 Powszechny Zakład Ubezpieczeń ("PZU") announced by current report No 82/2016:
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Conclusion of negotiations with UniCredit S.p.A., obtaining of corporate authorisations for acquisition of shares in Bank Pekao S.A. and Pioneer Pekao Investment Management S.A. (and through this, indirectly, Pioneer Pekao TFI S.A.), Pekao Pioneer PTE S.A. and Dom Inwestycyjny Xelion Sp. z o.o., and entering into consortium agreement and shareholders' agreement with PFR S.A. along with conclusion of share purchase agreement regarding Bank Pekao S.A. and consortium agreement with PFR S.A.
Legal basis: Art. 17 section 1 of MAR - confidential information
The Management Board of Powszechny Zakład Ubezpieczeń Spółka Akcyjna with its registered office in Warsaw ("PZU SA", the "Company"), acting on the basis of Art. 17 sec. 1 of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse 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 (Official Journal of the European Union L of 2014, No. 173, p. 1, as amended, hereinafter referred to as the "MAR"), hereby informs that negotiations aimed at the conclusion of a transaction of the purchase of a significant holding of shares in Bank Polska Kasa Opieki S.A. (the "Bank") by PZU SA acting in a consortium with Polski Fundusz Rozwoju S.A. ("PFR") from UniCredit S.p.A. (the "Seller", "UniCredit", PZU SA, PFR and the Seller are jointly referred to as the "Parties"), about the conducting of which the Company informed in current report No. 68/2016, were concluded.
At the same time, the Management Board and Supervisory Board of PZU SA granted consents to the conclusion of an agreement on the sale of a block of the Bank's shares (the "SPA") and other agreements required to carry out the planned transaction.
Subsequently, on 8 December 2016, PZU SA and PFR concluded the SPA with UniCredit.
The substance of the transaction provided for in the SPA is the acquisition by PZU SA and PFR, acting in concert, of a significant (ultimately covering approx. 32.8% of the total number of votes) block of the Bank's shares. The transaction will be completed in two stages. In the first stage PZU SA will acquire from the Seller 100% of the shares in a special purpose company (the "SPV") which will be the owner of the Bank's shares in a number representing approx. 20% of the total number of votes, and simultaneously, PFR will directly acquire a block of shares representing approx. 10% of the total number of votes. In the second stage, implemented not sooner than 60 days after the first acquisition, PFR will directly acquire the
remaining block of the Bank's shares covered by the SPA representing approx. 2.8% of the total number of votes (jointly, the "Transaction").
The price agreed by the Parties is PLN 123 (one hundred twenty three zloty) per share, which implies a total price of PLN 10 589 091 156 (ten billion five hundred eighty nine million ninety one thousand one hundred fifty six zloty) for the entire block of shares being acquired by PZU SA and PFR, including a price of PLN 6 456 762 861 (six billion four hundred fifty six million seven hundred sixty two thousand eight hundred sixty one zloty) for the block of shares being acquired by PZU SA. As a rule, SPA does not provide for an adjustment of the purchase price, save for an automatic reduction of the total sale price by the value of the dividends paid to the Seller.
The completion of the Transaction is conditional on fulfilment of certain conditions precedent provided for in the SPA which include, in particular: (i) obtaining of the consents of the antimonopoly authorities in Poland and Ukraine and (ii) also obtaining by the Seller and PZU SA and PFR of the relevant consents or decisions from the PFSA. Pursuant to the SPA, the conditions must be fulfilled prior to the long stop date, which has been agreed, as a rule, for the first anniversary of signing of the SPA, i.e. 8 December 2017. In the event the conditions are not fulfilled or waived in accordance with the SPA, each of the Parties will have the right
to rescind the SPA, which will result in withdrawal from the Transaction on the terms set out in the SPA.
PZU SA will publicly disclose information about the fulfilment or failure to fulfil the above indicated conditions of the Transaction in current reports.
The SPA contains a certain list of representations and warranties on the part of the Seller with respect to the shares being sold and with respect to the business situation and condition of the Bank and other entities from the Bank's capital group. Moreover, the SPA provides for the indemnification of PZU SA and PFR against any losses arising due to regulatory changes that affect the Bank's existing credit portfolio denominated in CHF. The Parties agreed that the above indemnification will not exceed an agreed amount and will in general be available for PZU SA and PFR for a period of 3 years following the acquisition of the Bank's shares by PZU SA and PFR in the first stage of the Transaction.
In the SPA, PZU SA and PFR agreed with the Seller the terms of the non-compete prohibition applicable to the Seller and entities from the Seller's capital group, as well as the principles of non-solicitation of the Bank's key employees.
Given the need to ensure a seamless spin-off of the Bank from the Seller's capital group, the Parties anticipate concluding an agreement regulating the basic rules of the spin-off (in the context of IT) of the Bank from the Seller's capital group. This agreement will specify the rules, in particular with regard to ensuring continuity of processes based on the IT systems possessed by the Bank, and will also regulate the rules and costs associated with ensuring the Bank's self-sufficiency after the Transaction is completed in thecontext of access to services and rights to software.
Moreover, the Parties agreed that their intention is that Pioneer Pekao Investment Management S.A. (and through this, indirectly, Pioneer Pekao TFI S.A.), Pekao Pioneer PTE S.A. and Dom Inwestycyjny Xelion Sp. z o.o. will fully belong to the Bank's capital group. As a result, the SPA contains general, term sheet terms of the acquisition of the shares of the above-mentioned entities, which at the date of singing of the SPA belong to the Seller (or entities from the Seller's group) and not to the Bank.
It was agreed that maximum purchase price for the above-mentioned shares of Pioneer Pekao Investment Management S.A., Pekao Pioneer PTE S.A. and Dom Inwestycyjny Xelion Sp. z o.o. will not exceed a total of PLN 634 000 000 (six hundred thirty four million zloty), and these shares will be acquired for this price either by the Bank or PZU SA or an entity indicated by PZU SA. As a rule, it is not provided for an adjustment of the purchase prices, save for an automatic reduction of the total sale prices by the value of the dividends paid to the Seller or entities from the its group. PZU SA will publicly disclose information about realization of the acquisition transaction of the above-mentioned entities in current reports.
In connection with the SPA, on 8 December 2016 PZU and PFR concluded a consortium agreement. The consortium agreement sets out the mutual rights and obligations of PZU SA and PFR regarding the conducting and closing of the Transaction and the mutual cooperation between PZU and PFR in connection with the SPA and the Transaction (the "Consortium Agreement").
In turn, before the acquisition of the Bank's shares in the first stage, PZU SA and PFR will conclude a shareholders' agreement setting out the principles of cooperation of PZU SA and PFR after the completion of the Transaction and the parties obligations as the Bank's shareholders, in particular with respect to the joint exercising of the voting rights attached to the Bank's shares held (the "SHA").
The Sale Agreement, the Consortium Agreement and the SHA are governed by Polish law.
Legal basis: art. 17 section 1 of MAR - confidential information. "