Date of preparation	24/03/2023
Current report no.	14/2023

 

With reference to current report no. 14/2023 dated 24 March 2023, the Management Board of TIM S.A. ‘Company’ informs that on 24 March 2023 it became aware that the Company’s shareholders – Krzysztof Folta, Piotr Nosal, Maciej Posadzy, Piotr Tokarczuk, Ewa Folta and Krzysztof Wieczorkowski ‘Shareholders’ or ‘Seller’ – entered into an investment agreement with FEGA Schmitt Elektrogroßhandel GmbH, a related entity ‘Investor’ Adolf Würth GmbH Co. KG ‘Würth’ regarding the Investor’s announcement of a tender offer for all shares in the Company ‘Tender Offer’ and the Shareholders’ commitment to sell all shares in the Company held by the Shareholders in response to the Tender Offer ‘Investment Agreement’.

The execution of this Investment Agreement represents the next stage of the review of various possible Strategic Option Overview with respect to the Company’s business operations, the commencement of which was announced by the Company in current report No. 23/2022 dated 22 August 2022.

Pursuant to the Investment Agreement:

1_The Investor has undertaken to provide the Polish Financial Supervision Authority with a notification of its intention to carry out a Tender Offer no later than on the first business day following the date of conclusion of the Investment Agreement and to announce the Tender Offer pursuant to Article 72a of the Act of 29 July 2005 on Public Offerings and Conditions for Introducing Financial Instruments to Organised Trading System and Public Companies ‘Act on Offerings’;

2_The Offeror shall be the sole Offeror and shall be the sole entity acquiring the Company’s shares in the Tender Offer;

3_The price of the Company’s shares in the Tender Offer shall be PLN 50.69 per share of the Company, the ‘Price’;

4_The Shareholders have undertaken to submit, in response to the Tender Offer, within 5 business days from the commencement of the subscription period under the Tender Offer, subscriptions for the sale of all the shares in the Company held by the Shareholders, i.e. as at the date of the Investment Agreement, a total of 8,604,681 shares in the Company representing 38.76% of the Company’s share capital and entitling to exercise 8,604,681 votes representing 38.76% of the total number of votes at the Company’s general meeting, of which: _i_ Krzysztof Folta undertook to subscribe for the sale of 4,600,000 shares in the Company representing 20.72% of the Company’s share capital and entitling to exercise 4,600,000 votes representing 20.72% of the total number of votes at the Company’s General Meeting, _ii_ Piotr Nosal undertook to subscribe for the sale of 14,241 shares in the Company representing 0.06% of the Company’s share capital and carrying 14,241 votes constituting 0.06% of the total number of votes at the Company’s General Meeting; _ii_ Maciej Posadzy undertook to subscribe for the sale of 183,626 shares in the Company, representing 0.83% of the Company’s share capital and entitling to exercise 183,626 votes representing 0.83% of the total number of votes at the Company’s General Meeting; _iv_ Piotr Tokarczuk undertook to subscribe for the sale of 202,000 shares in the Company, representing 0.91% of the Company’s share capital and conferring the right to 202,000 votes accounting for 0.91% of the total vote at the Company’s General Meeting; _v_ Ewa Folta undertook to subscribe for the sale of 604,814 shares in the Company representing 2.72% of the Company’s share capital and entitling to exercise 604,814 votes representing 2.72% of the total number of votes at the Company’s General Meeting; _vi_ Krzysztof Wieczorkowski undertook to subscribe for the sale of 3,000,000 shares in the Company representing 13.51% of the Company’s share capital and entitling to exercise 3,000,000 votes representing 13.51% of the total number of votes at the Company’s General Meeting,

5_The Shareholders, within the scope of their powers as Management Board members or Supervisory Board members of the Company or companies of the Company’s group of companies ‘Group Companies’ or shareholders of the Company, have undertaken to observe, during the period from the date of conclusion of the Investment Agreement until the closing date of the transaction ‘Transition Period’, not deviating from the market practice appropriate for this type of agreements, standard obligations not to undertake actions resulting in, for example: _i_ the disposal of the Company’s shares or the acquisition of the Company’s shares after the date of the Investment Agreement, excluding the disposal of the Company’s shares under the Company’s Management Board Incentive Scheme ‘Incentive Scheme’, _ii_ a change in the share capital of the Group Companies, except for a change in the share capital related to the Incentive Scheme or redemption of own shares held by the Company as at the date of the Investment Agreement, _iii_ cessation of their functions in the bodies of Group Companies, _iv_ merger, demerger or transformation of Group Companies, _v_ payment of benefits by the Group Companies to the Sellers or their related entities, except for benefits arising from obligations existing as at the date of the Investment Agreement or permitted under the Investment Agreement;

6_The Shareholders have agreed not to withdraw or waive the effect of subscriptions made in response to the Tender Offer, unless the Investor waives the Tender Offer;

7_The Tender Offer shall be announced subject to conditions including: _i_ the Investor obtaining the approval of the European Commission or any other competent antitrust authority for the concentration in connection with the potential acquisition of the Company’s shares under the Tender Offer; _ii_ subscription for shares under the Tender Offer entitling the Investor to at least 50% of the total number of votes at the Company’s general meeting; and _iii_ the adoption by the ordinary general meeting of the Company during the period of subscriptions for the shares in the Company covered by the Tender Offer of a resolution on the distribution of profit for the financial year 2022 on the basis of which it shall be decided that all profits shall be retained in the Company, except for the profits necessary to cover the dividend in the amount of PLN 29,968,920.00, which was paid to the Company’s Shareholders as an advance dividend pursuant to Management Board Resolution No. 1/Z/16.11.2022 dated 16 November 2022. The Investor, in accordance with the Agreement on Investment, shall be able to waive any or all of the conditions and acquire the Company’s shares in the Tender Offer despite the non-fulfilment of one or more of the aforementioned conditions;

8_In addition, the Investor and the Shareholders who are members of the Management Board of the Company have undertaken that in the event of settlement of the Tender Offer resulting in the Investor taking control of the Company, the Company shall, within 3 months from the settlement of the Tender Offer, settle the Incentive Scheme and offer all the shares covered by the Incentive Scheme, i.e. 1,100,800 shares of the Company to its Participants, in accordance with the rules of the Incentive Scheme, and the Shareholders and other Participants of the Incentive Scheme have undertaken that, in the event of settlement of the Incentive Scheme, they shall sell to the Investor all the shares subscribed for by them under the Incentive Scheme for the price specified in the Tender Offer;

9_The agreement contains the following statements the Sellers’ assurances customary for similar transactions.

The Agreement provides for the possibility of withdrawal from the Agreement, for example, in the event that the Investor fails to obtain the consent of the competent antitrust authority for the concentration by 31 December 2023 the possibility of withdrawal by either party to the Agreement; _ii_ failure by any of the Sellers to make a valid subscription for the sale of the Company’s shares in response to the Tender Offers the possibility of withdrawal by the Investor; and _iii_ the Investor’s failure to announce a Tender Offer within the time limit specified in the Investment Agreement or the announcement of a Tender Offer with a price lower than the Price the possibility of withdrawal by the Shareholders acting jointly.

Simultaneously with the conclusion of the Investment Agreement, the Management Board members of the Company, and the Management Board members of 3LP S.A. – a subsidiary of the Company, the ‘Declarants’ entered into a Management Warranty Deed Agreement with the Investor, in which the Declarants made certain representations and warranties to the Investor regarding the operations and situation of the Group Companies, and each of the Declarants individually undertook to the Investor not to take any actions during the Transition Period resulting in, for example:

1_distributions by the Group Companies to shareholders, payments in cash or in kind and other benefits to the Declarants, the Sellers, their related entities or family members, and benefits to or liabilities to other entities in connection with the transaction involving the acquisition of shares by the Investor under the Tender Offer;

2_significant changes in the management of the Group Companies, accounting rules, the use of reserves, changes in employment in a manner different from the previous practice,

3_the acquisition or disposal of securities and derivative instruments, as well as shares in companies;

4_increases or reductions in the share capital of Group Companies or changes in the form, entitlement or nominal value of the shares of Group Companies;

5_ demerger, merger, transformation or liquidation of Group Companies;

6_ issuance of bonds or issuance of debt instruments by Group companies;

7_material changes to the Articles of Association of Group companies;

8_disposing of, leasing or creating encumbrances on the businesses, organised parts thereof or material assets of the Group Companies;

9_the acquisition of significant assets by Group companies outside the normal course of business;

10_entering into or amending the terms of the existing financing agreements of the Group Companies, in each case except for such actions as are agreed by the Declarants and the Investor to be permissible during the Transition Period.

On 24 March 2023. The Company was also informed by the Investor that the Investor had entered into a commitment agreement with the Company’s shareholder Jan Walulik, the ‘Commitment Agreement’, in which Jan Walulik undertook to the Investor to subscribe, in response to the Tender Offer, within 5 business days from the commencement of the subscription period under the Tender Offer, for the sale of 710,400 shares in the Company representing 3.20% of the Company’s share capital and entitling the Investor to exercise 710,400 votes representing 3.20%. In the Commitment Agreement, Jan Walulik further undertook not to withdraw or waive the effect of subscriptions made in response to the Tender Offer, unless the Investor withdraws from the Tender Offer.

SIGNATURES OF THE COMPANY REPRESENTATIVES

24/03/2023, Krzysztof Folta – President of the Management Board 24/03/2023, Piotr Tokarczuk – Member of the Management Board