21 May 2014 12:59
GRUPO CLARIN S.A.
Board of Directors Accepts Offer Subject to Shareholder Approval
On 20 May 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 day, in which the Board had considered an offer to purchase 60% of the second company to be spun off Cablevisión S.A. and had accepted the offer subject to shareholder approval.
Attached below is a free translation of the minutes of the meeting of the Board of Directors of 20 May 2014.
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. 266: In the City of Buenos Aires, on the 20th day of the month of May 2014, at 17.00 hours, the Board of Directors of Grupo Clarín S.A. meets at the Company's headquarters on calle Piedras 174, Federal Capital, with the presence of Messrs. Directors Jorge Carlos Rendo, Alejandro Alberto Urricelqui, Pablo César Casey, Saturnino Lorenzo Herrero Mitjans, Héctor Mario Aranda, Ignacio Rolando Driollet, Lorenzo Calcagno, Alberto César Menzani, Sebastián Salaber, Luis María Blaquier, and of the undersigned members of the Supervisory Committee. The Chairman opens the meeting and submits the following point of the agenda to the consideration of those present: Consideration of the Irrevocable Offer received by the Company in connection with the purchase of the shares of spun-off company 2 of Cablevisión S.A. The Chairman states that, as presented at the meeting of the board of last 13 May, the Task Force has held business discussions with national and international prospective [investors] with experience and recognition in the different industries. In the framework of such discussions, on the 16th day of this month, at 18.51hs., the Company received an irrevocable offer (interchangeably, the "Irrevocable Offer" and/or the "Offer"), a copy of which was given to the Directors prior to this meeting for their due analysis, made by Messrs. Gerardo Martí Casadevall and Christophe DiFalco (the "Investors"), for the acquisition, on the Closing Date (as defined below), from one or more companies controlled by the Company, of a given number of shares of Cablevisión S.A. such that, upon consummation of the spin-off of Cablevisión S.A., the Investors will be entitled to receive 60% of the shares to be issued by spun-off company 2 of Cablevisión S.A. ("Spun-Off Company 2") as such company is described in the Cablevisión S.A. prospectus attached to the Irrevocable Offer. Consequently, the Chairman hands over to Mr. Urricelqui so that he may describe the main terms and conditions of the Irrevocable Offer. Mr. Urricelqui speaks and describes the main terms and conditions of the Irrevocable Offer and points out that the Offer is subject to the condition that it also include minority equity participations in (1) La Capital Cable S.A., Tres Arroyos Televisora Color S.A., Teledifusora San Miguel Arcángel S.A. and AVC Continente Audiovisual S.A. currently owned by Inter Radios S.A, and (2) Televisora Privada del Oeste S.A. (currently owned by Sergio Borrelli). In that respect, the Board states for the record that it has learned that Cablevisión S.A. in negotiating with such minority shareholders to obtain the right to purchase such holdings. Simultaneously with this Irrevocable Offer, the Investors have sent Fintech Advisory Inc. or "FAI" (together with the Company, the "Sellers") an irrevocable offer in terms substantially similar to those of the Offer, for the Investors to acquire all of the membership interests of a new limited liability company to be organised in the State of Delaware, United States of America, that will own approximately 40% of the shares to be issued by Spun-Off Company 2 (the "FAI Sale"). The Closing Date of the Offer is the date that occurs 10 business days immediately following the date on which all of the Conditions Precedent set forth under the Irrevocable Offer have been fulfilled. Such Closing Date must occur on or before 31 December 2014. Spun-Off Company 2 must at least have the assets and liabilities detailed in the Cablevisión S.A. Spin-Off Prospectus. Mr. Urricelqui continues to speak and says that the implementation and effective closing of the transaction described under the Irrevocable Offer-including the payment of the offered price and the transfer of the shares of Cablevisión S.A. to the Investors-is subject to the following conditions, denominated as "Conditions Precedent": i) the final approval of the spin-off, the way in which it will take place, its form and implementation conditions, by the shareholders of Cablevisión S.A. at a general shareholders' meeting to be called and held, and that such approval remain in force and effective. Ii) obtaining the Prior Regulatory Authorisations, as such term is defined in the Spin-Off Prospectus of Cablevisión S.A., and that such authorisations remain in force and effective, relating to (ii.a) the spin-off, including the prior merger whereby Cablevisión S.A. absorbed Multicanal S.A., Delta Cable S.A., Holding Teledigital Cable S.A., Teledigital Cable S.A., Televisora La Plata S.A., Construred S.A., Pampa TV S.A. and Cablepost S.A. (ii.b) the reorganisation of the LIcenses and their transfer to spun-off company 1 and to Spun-Off Company 2 in the terms described in the Prospectus and, (ii.c) the admissibility of the Investors as owners of Spun-Off Company 2 by AFSCA and, if applicable, by the Secretariat of Domestic Trade, the National Telecommunications Commission and the National Antitrust Commission. (iii) the effective implementation of the spin-off of Cablevisión S.A. and of the acts that Cablevisión S.A. must carry out pursuant to the Plan to Conform the Company to the Audiovisual Communication Services Law, in the manner, form and conditions approved by the shareholders at a meeting of the shareholders of Cablevisión S.A. held for such purpose. (iv) the inexistence of any court order or administrative or legislative regulation that directly or indirectly, and/or in whole or in part, suspends, alters, restricts, orders, prohibits the transaction or its effective implementation in the manner, form and conditions approved by the shareholders at a meeting of the shareholders of Cablevisión S.A. held for such purpose, or renders such transaction illegal and (v) that the closing of the FAI Sale occur on or before the Closing Date. The purchase price set on the Irrevocable Offer is of USD 28,200,000, which as of today equals approximately Ps. 228,138,000. If this Offer is accepted, the price will be paid as follows: a) USD 8,460,000 on the Closing Date, in United States Dollars (the "Initial Payment") and b) a promissory note issued by the Investors and to be delivered on the Closing Date, for USD 19,740,000 under the terms that are described in Annex III of the Offer. The Irrevocable Offer will expire on 26 May 2014. Mr. Urricelqui points out that, if this Board considers that the terms of the Irrevocable Offer are admissible, on or before that date and accepts it, subject to the subsequent approval of the shareholders, the Offer will be deemed extended automatically for an additional term that will expire on the tenth business day counted as from the date on which the Shareholders' Meeting is finally closed. In that case the Investors shall be irrevocably bound to create a guarantee in favour of the Sellers with a top tier international financial institution satisfactory to the latter in guarantee of the payment of the Initial Price, and to evidence to the Sellers its issuance by delivering to the Sellers an original guarantee document. Finally, the Irrevocable Offer provides that in the event of its acceptance by the Board of Directors, the Investors will have, during the period between the acceptance of the Offer and the date of the meeting of the shareholders of the Company that considers the Offer, the right to equal he best offer that the Company could receive from third parties for the Spun-Off Company 2 and other assets included in the Offer. In light of what was just presented, the Chairman states that this Board must devote itself to the analysis of the terms and conditions of the Offer, to determine whether or not they are commercially acceptable so that the Offer may be submitted to the subsequent approval of the shareholders of the Company. After a long debate, and taking into account that, (i) as explained before by this Board of Directors, the value of assets in Argentina are negatively affected by country risk, by the restrictions to access to the currency exchange market, by the regulatory limitations that cause competitive disadvantages and limitations to investment and financing as well as by the contingencies caused by the various oversight agencies over the assets under consideration; (ii) according to the appraisal carried out by the Company, to the Fairness Opinion of the transaction issued by Banco de Itaú BBA on 14 May of this year (a copy of which was delivered to the Directors before this meeting for their due analysis), the regulatory context in which Spun-Off Company 2 will operate and the current trading values of the share of Grupo Clarín S.A., the price offered is a fair market value and (iii) among the conditions that were negotiated [the parties] include (x) a purchase option, transferrable to third parties over the assets sold for a term of seven years, (y) a percentage of the sale price upon the occurrence of any liquidity event and (z) a transferrable preferential purchase right, that will allow [the Company] to equal any offer that the purchasers might receive in the future-conditions that will allow the shareholders to recover value in the future-, the Board decides unanimously to accept the Irrevocable Offer, subject to the final approval of the shareholders at a Shareholders' Meeting that is to be called. Additionally, [the Board] authorises the Chairman and/or the Vice Chairman, so that, on behalf of the Company, they may deliver to the Investors the acceptance letter according to the form attached as Exhibit IV to the Irrevocable Offer and to communicate their acceptance ot the market under the terms that were decided by the Board on 13 May. Finally, and taking into account that the offer is subject, among other things, to the Prior Regulatory Authorisations described above, and that both the Company and Cablevisión S.A. haved received from the CNV and from the Ministry of Economy, notes that indicate that the filings made in connection thereto shall not be decided upon until AFSCA has informed about who will be the "new owners proposed for the licenses." The Directors also decide unanimously to make the filings that are necessary in order to obtain, promptly, the administrative approval of the previous merger, whereby Cablevisión S.A. absorbed Multicanal S.A., Delta Cable S.A., Holding Teledigital Cable S.A., Teledigital Cable S.A., Televisora La Plata S.A., Construred S.A., Pampa TV S.A. and Cablepost S.A., and the repeal of Resolution 113, issued by the Ministry of Economy. The Board states for the record that if it does not obtain such approvals, the Company will be prevented, in the case that the shareholders of the Company approve the irrevocable Offer, from implementing and closing the transaction within the pressing implementation term set forth under the Plan to Conform the Company ot the Audiovisual Communication Services Law. With no further items to discuss, the meeting is adjourned at 19.00 hours.