18 Aug 2014 07:53
GRUPO CLARIN S.A.
Board of Directors considers AFSCA Resolution
On 15 august 2014, Grupo Clarín S.A. (the "Company") informed the Argentine Securities Commission and the Buenos Aires Stock Exchange that the Board of Directors of the Company had held a meeting on that date June 2014, in which the Board of Directors had acknowledged receipt of Resolution No. 902 AFSCA/2014, issued by the Audiovisual Communication Services Law Federal Enforcement Authority; considered a note received from 34 South Media LLC in connection with its firm and irrevocable offer dated 26 June 2014 to purchase the shares and signals that make up Unit No. 4 under the Plan to Conform the Company [to the Audiovisual Communication Services Law]; and called an extraordinary shareholders' meeting.
Attached hereto is a free translation of the minutes of said meeting of the Board of Directors.
Enquiries:
In Buenos Aires:
Alfredo Marín/Agustín Medina Manson
Grupo Clarín
Tel: +5411 4309 7215
Email: investors@grupoclarin.com
In London:
Alex Money
Jasford IR
Tel: +44 20 3289 5300
Email: alexm@jasford.com
In New York:
Melanie Carpenter
I-advize Corporate Communications
Tel: +1 212 406 3692
Email: clarin@i-advize.com
FREE TRANSLATION
Minutes of the Meeting of the Board of Directors No. 282 : In the City of Buenos Aires, on the 15th day of the month of August 2014, at 18.00 hours, the Board of Directors of Grupo Clarín S.A. meets at the Company's headquarters on calle Piedras 1743 of this City, with the presence of Messrs. Directors Jorge Carlos Rendo, Pablo César Casey, Héctor Mario Aranda, Ignacio Rolando Driollet, Lorenzo Calcagno, Alberto César Menzani, Luis María Blaquier and Sebastián Salaber and of the undersigned members of the Supervisory Committee. The Chairman, Jorge Carlos Rendo opens the meeting and submits the first point of the agenda to the consideration of those present: 1) Acknowledgment of Resolution No. 902 AFSCA/2014 (the "Resolution") issued under File No. 3002 AFSCA/2013. The Chairman, Dr. Jorge Carlos Rendo states that, as the Directors know, on 13 August 2014 the Company was served notice of Resolution No. 902 / AFSCA / 2014, whereby that authority decided to reject the filing made by the Company together with its subsidiary Arte Radiotelevisivo Argentino S.A. (ARTEAR) and to compel ARTEAR, Cablevisión S.A., Radio Mitre S.A. and the Company to ratify within the following ten business days their intent to fulfil the proposal to conform [to the Audiovisual Communication Services Law] that was declared formally admissible pursuant to Resolution No. 193/AFSCA/2014 (the "Plan"), or else become subject to Section 21 of Law No. 19,549, which provides that the Administration may declare unilaterally the lapsing of an administrative act when the interested party does not fulfil the conditions set forth under such act, provided that the Administration shall have previously declared the interested party delinquent and granted a reasonable supplementary term to remedy its non-compliance. The Chairman states that the Resolution is clearly contrary to the decision of the Argentine Supreme Court, which on 29 October 2013, in re "Grupo Clarín and others v. National State re/ declarative action" stated that in order to fulfil the purposes of Law No. 26,522 (the "ACSL"), the application of this law must be carried out by an independent technical agency, in equal conditions for all the subjects that fall under the scope of the law, highlighting that these [equal conditions] were crucial to safeguard the constitutional rights of equality and freedom of the press and of expression. The Resolution is manifestly inapplicable and is part of the scandalous harassment campaign instrumented by the National Government against the Company, which has no purpose other than to silence the critical editorial opinions of the Company's media towards official policies, and results in an evident violation of the Company's right to freedom of the press and of expression, which the Company has repeatedly denounced before the administration and the courts. The threat contained in the Resolution, to apply ex officio the implementation of the Plan when the term granted by Resolution No. 193/AFSCA/2014 for its execution has not yet expired, in addition to being legally inapplicable, will also worsen the economic damages that were already caused to the Company and its shareholders, which this Board-as well as the shareholders of the Company at the shareholders' meetings that were called and held for that purpose-have tried to mitigate through the presentation and implementation of the Plan. This Resolution is but another proof of the selective application that AFSCA makes of the ACSL with respect to the subjects that are required to undergo processes to conform to the ACSL, proving flagrantly and evidently the discriminatory and persecutory treatment that the Administration dispenses to the Company and its shareholders. This affects the principle of equality that has been consecrated in the National Constitution, with ostensible gravity. Having made his statement, the Chairman asks the Company's legal counsel to illustrate to the Board the scope of this Resolution. Dr. María de los Milagros Páez speaks and states that the Resolution is absolutely null and void and has serious vices and irregularities. In the first place, there is an essential error, which consists in the treatment that the Resolution gives to the transfer of the shares of Inversora de Eventos S.A. (IESA) to a trust, as approved by the shareholders of the Company at the shareholders' meeting of 30 June 2014, which was adjourned and reconvened on 11 July 2014. In fact, AFSCA confuses the purposes of the Company's filings. Under filing No. 13,291/AFSCA/2014, the Company expressed its desire to amend or rectify the Plan, in order to allow it not to divest of its participation in IESA, given that pursuant to certain precedents, the limitations to the ownership of closed television signals apply only to licensees, and not to their shareholders or related companies. Notwithstanding that, given that on 10 July the Company received Note No. 130/AFSCA/2014, which was considered by this Board of Directors on 11 July, the shareholders of the Company, when the shareholders' meeting resumed after its adjournment, decided to approve the alternative offer received from 34 South Media LLC, because this alternative offer allowed the Company to implement the Plan that had originally been filed and that was declared formally admissible pursuant to Resolution No. 193/AFSCA/2014, and also allowed the Company to safeguard its assets and rights. In connection with Unit No. 4, the Company had proposed to assign and transfer in favour of a third party with no corporate relationship with Grupo Clarín and/or any of its subsidiaries or related companies, 100% of its direct or indirect participation in the shares of IESA, indirect owner of the registered signals TyC Sports and TyC Max, and as a consequence of ARTEAR's divestment in favour of IESA, in turn the owner of the registered signals Volver, Magazine, Quiero Música en mi Idioma, El Trece Satelital, and a minority equity participation in the company that owns the signal Canal Rural. Consequently, the transfer of the property of the assets in favour of a trust managed by an independent trustee fully complies with the original commitment of the Company. Therefore, Dr. Páez points out, there is an essential or material error when this Administration holds that the transfer of the shares of IESA to the trust entails an amendment of the Company's Plan, and its rejection is a clearly arbitrary and illegitimate procedure by the Directors [of AFSCA] who approved it, if one adds to that the statements in connection with the implementation of the ex officio transfer procedure. Thus, AFSCA intends to justify its actions with a non-existent amendment to the Plan. AFSCA does not even attempt to sketch the legal reasons why a transfer of the shares of IESA to a trust would be contrary to the spirit and/or the letter of the ACSL, and/or a breach of the Plan submitted by the Company. This failure results in a nullity that may not be remedied. This way, AFSCA continues to give the Company a discriminatory treatment that does not respect the right to equality vis a vis other providers that are direct competitors of the Company, in clear disregard of the recommendations of the Supreme Court about the application of the ACSL. To this discrimination against the Company one must add the selective application of the law. Given Dr. Páez's presentation, the Chairman motions, specifically: (i) that the Board of Directors acknowledge the Resolution, (ii) that the Company's counsel make the necessary filings in order to safeguard the Company's rights and interests. The motion is submitted to a vote and approved unanimously. Next, the Chairman submits to the consideration of those present the second point of the agenda: 2) Consideration of the note received from 34 South Media LLC in connection with the Firm and Irrevocable Offer to Purchase the Shares and Signals that Make Up Unit No. 4, dated 26 June 2014. The Chairman states that, as the Directors know, the Company has continued conversations with 34 South Media LLC as a consequence of the decision of the shareholders when the shareholders' meeting reconvened on 11 July. As a consequence of that decision, when the Company informed 34 South Media LLC of the issuance by AFSCA of Resolution No. 902/AFSCA/2014, 34 South Media LLC sent the Company and GC Minor S.A., on this date, a note expressing that in light of its concerns with respect to the implementation of the alternative offer-which involves the creation of the trust-its desire is that the Company will accept the irrevocable offer to acquire Unit No. 4 of the Plan, ratifying its terms as per the original offer. Next, the Chairman asks Mr. Casey to speak. Mr. Casey states that he understands the concerns of 34 South Media LLC regarding the closing of the transaction, particularly taking into account the evident arbitrariness with which AFSCA decides and behaves, with a clear persecutory and harmful interest against the Company, as explained by the Chairman. Mr. Casey also states that, independently, and without prejudice to the legal actions that the Company may bring to safeguard and preserve its rights and interests, given the risk that 34 South Media LLC-only offeror for Unit No. 4 as a whole-may withdraw from the process, this Board of Directors should pay heed to the request of 34 South Media LLC, prioritising its permanence in the process as well as the implementation of the Plan. It is clear, at this point in time, that AFSCA seems to be searching for and invoking any excuse to obstruct the fulfilment of the Plan or to make it lapse in order to move against the Company and its subsidiaries with an ex officio procedure that, as was also already stated, only seeks to intensify the damages to the Company and its shareholders, and that is something that must be avoided. The preservation of the corporate interest so requires it, even in the face of manifest arbitrariness, such as that resulting from Resolution No 902/AFSCA/2014. Therefore, considering that this Board of Directors has already analysed and approved the commercial terms of the original offer submitted by 34 South Media LLC, in fulfilment of the mandate granted by the shareholders to the Board of Directors to carry out the implementation of the Plan within the term granted by AFSCA, and for the purposes indicated above, he motions that the Board of Directors approve the original firm and irrevocable offer to purchase the shares and signals that make up Unit No. 4 of the Plan received from 34 South Media LLC on 26 June 2014, and that the Board communicate its acceptance in writing today, without prejudice of the Company continuing with the actions that it may deem necessary to safeguard its rights and assets. The motion is submitted to a vote and is approved unanimously. The Board authorises any of its attorneys-in-fact and/or its Chairman to execute the corresponding acceptance of the original offer under the terms approved herein. Finally, the Chairman submits to the consideration of those present the last point of the agenda. 3) Calling of a General Extraordinary Shareholders' Meeting. As a consequence of the above decisions, the Chairman states that a General Extraordinary Shareholders' Meeting should be called in order for the shareholders to ratify the decision of the Board of Directors in connection with the acceptance of the original Firm and Irrevocable Offer to Purchase the Shares and Signals that make up Unit No. 4 of the Plan, received from 34 South Media Holding LLC on 26 June 2014 and its supplementary offer received today, and for them also to ratify the decision with respect to the approval of the Alternative Offer received by the same offeror. The motion is submitted to a vote an the Board of Directors unanimously decides to call a General Extraordinary Shareholders' Meeting for 22 September 2014 at 15.00 hours on first call, at the Company's headquarters located on Calle Piedras 1743, Autonomous City of Buenos Aires, in order to consider the following agenda: "1) Appointment of two shareholders to draft and sign the minutes of the meeting, 2) Report on, and ratification of, the actions of the Board of Directors with respect to the acceptance of the firm and irrevocable offer for the purchase of the shares and signals that make up Unit No. 4 of the Plan to Conform the Company [to the Audiovisual Communication Services Law] received from 34 South Media LLC. Pronouncement with respect to the decision of Point 5 of the Agenda of the General Extraordinary Shareholders' Meeting held on 30 June 2014 and reconvened on 11 July 2014 after its adjournment." The motion is submitted to a vote and approved unanimously. The Board of Directors also unanimously authorises the Chairman to sign the text of the call for the meeting for its publication. With no further items to discuss, the meeting is adjourned at 19.00 hours.