17th Aug 2016 07:30
GRUPO CLARIN S.A.
Board Approves Reorganisation
On 16 August 2016, Grupo Clarín S.A. (the "Company") informed the Argentine Securities Commission and the Buenos Aires Stock Exchange that its Board of Directors had approved a corporate reorganisation whereby certain Argentine subsidiaries of the Company that hold shares of Cablevisión S.A. will be merged into the Company, and certain equity of the Company will be subsequently spun off to create a new holding company under the name Cablevision Holding S.A.
Attached as Exhibit A is a free English language translation of the minutes of the meeting of the Board of Directors held on 16 August 2016.
Enquiries:
In Buenos Aires:
Agustín Medina Manson / Patricio Gentile
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
Exhibit A
FREE TRANSLATION
Minutes of the Meeting of the Board of Directors No. 365: In the City of Buenos Aires, on the 16th day of the month of August 2016, at 17.00 hours, the Board of Directors of Grupo Clarín S.A. meets at the Company's headquarters on calle Piedras 1743, City of Buenos Aires, with the presence of Messrs. Directors Jorge Carlos Rendo, Alejandro Alberto Urricelqui, Pablo César Casey, Héctor Mario Aranda, Horacio Eduardo Quiros, Ignacio Rolando Driollet, Lorenzo Calcagno, Alberto César José Menzani, and Sebastián Salaber and of the members of the Supervisory Committee who sign below. The Chairman, Mr. Jorge C. Rendo, submits the first point of the agenda to the consideration of those present: 1) Consideration of the conclusion and recommendations of the Working Group to proceed with a specialization of the business portfolio of the Company and its subsidiaries. The chairman speaks and states that the Working Group that was created in order to analyse various alternatives to proceed the specialisation of the business portfolio of the Company and its subsidiaries and to propose courses of action to follow, has explored various options that tend to bolster the growth of the media, cable television, internet and telecommunications segments of the Company and its subsidiaries. In the course of its research, it has analysed (i) international precedents and the trends in an industry and has observed that frequently media conglomerates have at been reformulating their dimension to face the challenges and investments that each that each of the segments in which they are involved demands, with the aim of strengthening the value of each investment for the audience, the clients and the shareholders, and (ii) the characteristics of each industry. That is the case for example of Time Warner Inc., which spun off its telecommunications business (Time Warner Cable) and its editorial unit (Time Inc.) and News Corporation, which spun off most of its television and film assets into a new company, 21st Century Fox. The Working Group has also taken into account the growth perspectives and the capital needs of each business: telecommunication companies operate in a convergence market that requires strong investment of capital for infrastructure, while media face the challenge of their digital transformation and the development of a new business model without giving up their journalistic independence and the quality of their content in a mature market. Therefore, Chairman Dr. Jorge C. Rendo gives the floor to Director Mr. Alejandro A. Urricelqui so that, on behalf of the directors that form the Working Group, he may present the conclusions of such Group and consequently motion in favour of the alternative for which this Board of Directors should pronounce itself. Mr. Urricelqui speaks and states that the Working Group focused on the development of the alternative of a corporate reorganisation process that will allow the Company and its subsidiaries to achieve the specialisation of the existing asset portfolio, and thus fulfil the mandate given by the shareholders at the extraordinary shareholders meeting of 12 January 2016. Such reorganisation process will be implemented in two successive steps: (i) first the merger into the company of the Argentine holding companies through which the Company maintains an indirect participation in Cablevisión S.A. - Southtel Holdings S.A. ("SHOSA"), Vistone S.A. ("Vistone"), Compañía Latinoamericana de Cable S.A. ("CLC") and CV B Holding S.A. ("CVB"), given that their business is exclusively investment, which supplements the business carried out by the Company, increasing, in consequence, the efficiency and synergies and optimising costs, processes and resources. (ii) Subsequently, Mr. Urricelqui continues, Grupo Clarín would spin off part of its equity to create a new company that would be formed by the direct (post merger) and indirect share participations in Cablevisión S.A. and other assets, liabilities, rights and obligations that the shareholders of the Company shall allocate to the spun off company. The Company, therefore, will keep and will continue all activities, operations, assets and liabilities that are not specifically allocated to the creation of the spun off company, i.e. the participations in media companies, including the editorial business and the audiovisual content business. The spinoff, Mr. Urricelqui continues, would thus permit the adoption of the differentiated growth strategies and objectives for, on the one hand, the telecommunications segment, and on the other hand, the media business (print, TV, radio, etc.), each focused on its own markets, risks, organisational processes and capital structures, resulting in greater benefits for the companies that result from the reorganisation process and, therefore, for their shareholders. Mr. Urricelqui states that, in use of the powers vested in the Working Group at its creation, the Group had (a) instructed the auditors of the Company to prepare Special Consolidated Merger and Spinoff Financial Statements as of 30 June 2016, which are based on the Company's Special Individual Financial Statements of the Company and in the Special Financial Statements of SHOSA, CVB, CLC and Vistone as of the same date, so that this Board of Directors may have on hand all of the documents needed to evaluate the corporate reorganisation alternative presented by the Working Group, and (b) entered into an agreement with Goldman Sachs to advise the Board of Directors on the various questions related to the reorganisation process and its effects. The merger transaction, if carried out, will not require an increase in the corporate equity of Grupo Clarin, or the establishment of an exchange ratio, because the Company is the owner, directly and indirectly through the merged companies, of 100% of their equity. However, as a consequence of the spinoff, the Company's equity will be reduced pro rata and Class A, Class B and Class C shares will be cancelled in exchange for a set of shares of the same class and with the same rights issued by the spun off company pursuant to an "exchange ratio" that will be established for that purpose. Therefore, Mr. Urricelqui on behalf of the Working Group recommends to this Board of Directors that the Company undergo a merger and spinoff process along the lines presented above. Next, the Chairman speaks and motions specifically that this Board of Directors approve the recommendation of the Working Group and carry out all necessary acts-including the approval of the terms and conditions of the corporate reorganisation process-that will be submitted to the consideration of the shareholders. Next, the Chairman Dr. Jorge C. Rendo submits the second point of the agenda to the consideration of those present: 2) Consideration of the Special Parent Company Only Financial Statements as of 30 June 2016 and the Special Consolidated Merger and Spinoff Financial Statements as of 30 June 2016. The Chairman speaks and states that, as a result of the previous resolution and in order to materialise the merger and spinoff process to be undertaken by the Company, the Special Parent Company Only Financial Statements of the Company and the Special Financial Statements prepared by the relevant companies as of 30 June 2016, and that Special Consolidated Merger and Spinoff Financial Statements as of 30 June 2016 were prepared as of 30 June 2016 and made available to the members of the Board of Directors prior to this meeting. Consequently, this Board of Directors should approve such financial statements and the Chairman motions in for a vote to approve: (i) the Special Parent Company Only Financial Statements as of 30 June 2016, (ii) the Special Consolidated Merger and Spinoff Financial Statements as of 30 June 2016. The motion is submitted to a vote and approved unanimously. Next, the Chairman speaks and states that prior to the meeting, the members of the Audit Committee that are present at the meeting had the opportunity to analyse both the Special Parent Company Only Financial Statements as of 30 June 2016 and the Special Consolidated Merger and Spinoff Financial Statements as of 30 June 2016, as well as the exchange ratio as of 30 June 2016, which will be incorporated to the spinoff prospectus, and have issued their "Report on the partial spinoff and reduction of the equity of the Company" which was delivered to the members of the Board of Directors prior to this Board meeting, in which the members of the Audit Committee stated that they had no observations in connection with such documents. Next, the third point of the agenda is submitted to the consideration of the Board of Directors: 3) Approval of the Pre-Merger Commitment. Dr. Casey speaks and informs that the Board must consider and approve the pre-merger commitment. A draft of the commitment was circulated to the members of the Board of Directors prior to the meeting for its analysis. The commitment was executed today by the Chairman of the Company, with SHOSA, Vistone, CLC and CV B. Dr. Casey reads the commitment, which states: "PRE-MERGER COMMITMENT. In the Autonomous City of Buenos Aires, on the 16th day of the month of August 2016, among the companies Grupo Clarín S.A., domiciled at Calle Piedras 1743, Autonomous City of Buenos Aires, represented for purposes of this act by its Chairman Jorge C. Rendo (hereinafter "GCSA" and/or the "Surviving Company"); Compañía Latinoamericana de Cable S.A., domiciled at Calle Piedras 1743, Autonomous City of Buenos Aires, represented for purposes of this act by its Chairman Alejandro A. Urricelqui (hereinafter "CLC"); CV B Holding S.A., domiciled at Calle Tacuarí 1842, Autonomous City of Buenos Aires, represented for purposes of this act by its Chairman Alejandro A. Urricelqui (hereinafter "CVB"); Southtel Holdings S.A., domiciled at Calle Piedras 1743, Autonomous City of Buenos Aires, represented for purposes of this act by its Chairman Alejandro A. Urricelqui (hereinafter "SHOSA"); and Vistone S.A., domiciled at Calle Tacuarí 1842, Autonomous City of Buenos Aires, represented for purposes of this act by its Chairman Alejandro A. Urricelqui (hereinafter "VST" and together with GCSA, CLC, CVB and SHOSA, the "Companies" and/or the "Parties"), hereby enter into this pre-merger commitment (hereinafter, the "Commitment") subject to the provisions copied below and to Sections 82 adn 87 of the General Companies Law No. 19,550 (hereinafter, the "GCL"), Sections 174 and following Sections of General Resolution 7/15 of the Inspección General de Justicia and the Rules of the National Securities Commission (hereinafter the "CNV") as they apply to GCSA as a company that is subject to the oversight of such Commission. Now, therefore, the Parties agree as follows: FIRST: The Parties agree to the merger of the Companies pursuant to the laws referred to above and subject to the terms of this Commitment. GCSA, as Surviving Company, shall absorb all the assets, liabilities, rights and obligations of CLC, CVB, SHOSA and VST (the "Merged Companies"). The Merged Companies, as a result of their merger, shall be dissolved early without liquidation and GCSA shall assume all the activities, credits, assets and all the rights and obligations of the abovementioned companies existing as of the date of the merger, as well as those that may exist or come into existence as a consequence of actions or activities prior to or after such merger. SECOND: To the extent that the companies CLC, CVB, VST and SHOSA carry out an activity that is exclusively that of investment, which is supplementary to the similar investment activity carried out by GCSA, the merger shall be advantageous because it shall increase the efficiency and synergy and shall optimise costs, processes and resources through their unification. THIRD: The merger is made on the basis of the economic situation reflected by the financial statements of the Companies as of 30 June 2016. The special individual financial statements of the Companies and the special consolidated merger and spinoff financial statements, in each case as of 30 June 2016, have been prepared on homogenous bases and similar valuation criteria, pursuant to professional accounting rules in force in the Republic of Argentina. FOURTH: For purposes of Section 83 (1)(c) of the GCL, we hereby state that all the shares of the Merged Companies as part of the merger process belong directly or indirectly-through the Merged Companies-to GCSA, and therefore this process does not require an exchange of shares, because the incorporation of the assets and liabilities of the Merged Companies leads necessarily to the cancellation of all of the shares of these companies, which are dissolved without liquidation. FIFTH: The equity of each of the relevant Companies is the following: CLC: Ps. 19,189,422, represented by 19,189,422 common, nominative, non-endorsable shares with a nominal value of Ps. 1 each, and with the right to one vote per share; CVB: Ps. 66,628,353, represented by 66,628,353 common, nominative, non-endorsable shares with a nominal value of Ps. 1 each, and with the right to one vote per share; GCSA: Ps. 287,418,584, represented y 75,980,304 Class "A" common, nominative, non-endorsable shares with a nominal value of Ps. 1 each, and with the right to five votes per share; 186,281,411 Class "B" common, book-entry shares with a nominal value of Ps. 1 each, and with the right to one vote per share; and 25,,156,869 Class "C" common, nominative, non-endorsable shares with a nominal value of Ps. 1 each, and with the right to one vote per share; SHOSA: Ps. 127,153,997 represented by 127,153,997 common, nominative, non-endorsable shares with a nominal value of Ps. 1 each, and with the right to one vote per share; and VST: Ps. 339,365,203, represented by 339,365,203 common, nominative, non-endorsable shares with a nominal value of Ps. 1 each, and with the right to one vote per share. SIXTH: The date of the merger (the "Merger Date") shall be effective as of 1 October 2016, date as from which the Surviving Company will continue with the operations of the Merged Companies, giving rise to the corresponding operating, accounting and tax effects. As of that date, all of the assets and liabilities, including registered assets, rights and obligations that belong to the Merged Companies shall be deemed incorporated to the equity of GCSA in its capacity as Surviving Company. SEVENTH: This Commitment shall be approved by the management bodies of all involved Companies and shall be ratified by the respective shareholders at extraordinary Shareholders' Meetings. EIGHTTH: The managers of the Merged Companies shall continue in their positions with their own capacities until the execution of the final merger agreement, as from which date the management of the companies shall be governed by the last paragraph of Section 84 of the GCL. NINTH: Any disputes that may arise in the application of this Commitment, as well as in all matters relating to the merger of the Companies involved, shall be submitted to the jurisdiction of the Courts of First Instance in Commercial Matters of the Autonomous City of Buenos Aires, to which end the parties set special domiciles at the addresses stated above. In witness whereof, the parties execute five identical copies of this Commitment."
Once the reading is completed, those present at the meeting approve unanimously the actions of the Chairman and consequently approve the pre-merger commitment copied above. Next, the fourth point of the agenda is submitted to the consideration of the members of the Board of Directors: 4) Approval of the partial spinoff of the Company and the formation of the spun-off company-Cablevisión Holding S.A. ("CVH"). Mr. Ignacio Driollet speaks and states that according to the recommendation made by the Working Group and approved by this Board of Directors and in order to submit to the approval of the shareholders the partial spinoff following the merger into the Company of SHOSA, Vistone, CLC and CV B, the Board must approve the terms and conditions of the partial spinoff that are detailed below: Description of the assets to be spun off. Transfer. The Company will partially spin off its equity to form a new company-the spun-off company or Cablevisión Holding S.A.-which will file before the CNV a request for entry into the public offering regime, the listing of its Class B and Class C shares and the trading of its Class B shares in the Buenos Aires Securities Market ("Merval") through the Buenos Aires Stock Exchange ("BCBA"), pursuant to the exercise of the powers delegated by the Merval to the BCBA pursuant to Resolution No. 17,501 of the CNV, and may also request such authorisations with respect to one or more domestic or foreign securities markets. The equity that will be spun off consists of certain-and only certain-share holdings or equity participations held by the Company, including the direct (post merger) and indirect participations of the Company in Cablevisión S.A. and in GCSA Equity, LLC-and the other assets, liabilities, rights and obligations that are allocated to the spun-off company as stated under Note 3 of the Special Consolidated Merger and Spinoff Financial Statements, where the Company presents the criteria for the allocation of assets, liabilities and equity. In that regard, and among other share holdings or equity participations, after the merger and the spinoff are perfected, the spun-off company will become owner, directly or indirectly, of approximately 60% of the capital stock and votes of Cablevisión S.A. and of 100% of the participations in GCSA Equity, LLC. As a result of the spinoff, in the event that it shall be approved by the shareholders and once the merger, the spinoff and the formation of the spun-off company have been registered before the Inspección General de Justicia ("IGJ"), the Company will carry out all acts or transactions necessary to transfer or to cause the transfer to the spun-off company of the spun-off equity in accordance with the criteria taken into account for (a) the allocation of assets and liabilities between Grupo Clarín and the spun-off company, and (b) the preparation of the Company's Special Parent Company Only Financial Statements as of 30 June 2016. Effective Spinoff Date. The effective spinoff date will be the first day of the calendar month following the month on which the last of the following registrations is obtained: (i) registration of the merger and spinoff with the IGJ, or (ii) registration before the IGJ of the formation of the spun-off company. As from the effective spinoff date, the spun-off company will commence its activities on its own and the operative, accounting and tax effects of the spinoff will occur. On the effective spinoff date, the Company will execute a formal document for the transfer of operations, thus giving effect to the allocation of operations, risks and benefits. In connection with the spinoff, the "reorganisation date" mentioned under Secion 105 of Decree No. 1344/1998, which regulates the Income Tax Law, shall be the effective spinoff date. Exchange Ratio. Once the merger and spinoff and the formation of the spun-off company have been registered with the IGJ and the spun-off company has been admitted to the public offering regime and the listing of its Class B and Class C shares has been authorised in the stock exchanges and/or markets specified by the Board of Directors, the company will proceed to give effect to the reduction of its corporate equity as a consequence of the spinoff, which reduction shall affect all shareholders of the Company in each class of shares, and the spun-off company will issue, in exchange, a set of new shares of the same classes as those issued by the Company, according to the following "exchange ratio": (i) 0.3715 shares of Grupo Clarín (post spinoff) and (ii) 0.6285 shares of the spun-off company. The exchange of shares shall be carried out: (a) in the case of Class A and Class C shares, at the Company's headquarters located at Calle Piedras 1743, Autonomous City of Buenos Aires, and (b) in the case of the Class B shares, through Caja de Valores, located at Calle 25 de mayo 362, Autonomous City of Buenos Aires. The corresponding press releases will be issued in due course, including publication on the bulletin of the BCBA as required by Section 109 of the Rules, informing the Shareholders of the date and time that the exchange will occur. The fractions of decimals of shares that result from the exchange for each shareholder shall be paid in cash at the Company's headquarters (in the case of Class A and Class C shares) or through Caja de Valores (in the case of Class B shares) on the date and at the time that is duly indicated for the exchange of shares. The liquidation of the fractions shall be made at their equity value following the procedure established under applicable regulations. Accounting Certification of the Exchange Ratio. The external auditors of the Company, Price Waterhouse & Co. S.R.L., of 16 August 2016 issued an accounting certification with respect to the proposed "exchange ratio". The members of the Audit Committee that are present at the meeting had the opportunity to analyse both the Special Parent Company Only Financial Statements as of 30 June 2016 and the Special Consolidated Merger and Spinoff Financial Statements as of 30 June 2016, as well as the exchange ratio, which will be incorporated to the spinoff prospectus and have issued their "Report on the partial spinoff and reduction of the equity of the Company" which was delivered to the members of the Board of Directors prior to this Board meeting, in which the members of the Audit Committee stated that they had no observations in connection with such documents. Withdrawal Rights. The shareholders of the Company will have no withdrawal rights, pursuant to Section 245, paragraph 2 of the GCL. Creditors' Challenge Rights. The Company's creditors may exercise their right to challenge the spinoff under Section 88 of the GCL. For that purpose, the Company will publish for three days the required notices in the Official Gazette of the Republic of Argentina and in Diario Clarín. Creditors may exercise their right to challenge the spinoff during the 15 days immediately following the last day of publication of such notices. Amendment of the Company's Bylaws. As a consequence of the spinoff, the resulting reduction of its corporate equity and other supplementary reasons, the Company will amend its Bylaws in accordance with the draft attached to the prospectus that was circulated among the members of the Board. Continuity of Activities by the Company. The company will keep and will continue to carry out all activities, operations, assets and liabilities that are not specifically allocated to the formation of the spun-off company. In addition, and until the effective date of the Spinoff, the Company shall be liable for all the acts as well as any other contingency that may result from actions taken by the Company with respect to the equity to be spun off prior to the effective date of the spinoff, including liability for the administrative summaries and judicial actions that are pending resolution. Liabilities with Suppliers of the Company. The indebtedness incurred by the Company with its suppliers shall not be transferred to the spun-off company. As from the effective date of the spinoff, the spun off company will commence autonomous relationships with its respective suppliers, including those that result from the total or partial transfer of pre-existing contractual relationships as a consequence of the spinoff. Tax Consequences. The merger and spinoff will the carried out within the framework of Section 77 of the Income Tax Law for tax-free reorganisations. Dr. Driollet finally states that all of the tems of the proposed spinoff are reflected in the language of the merger/spinoff, which prospectus was also made available to the Directors and was prepared for its filing with the CNV pursuant to Secition 18 and following Sections, Title II, Chapter X of the CNV Rules. Next, Mr. Aranda asks to speak and specifically motions that (i) the partial spinoff of the Company in the terms set forth above for their consideration by the shareholders, (ii) the proposed exchange ratio and the criteria for the allocation of assets, liabilities and equity, (iii) the draft merger and spinoff prospectus prepared for its presentation with the CNV pursuant to applicable law, (iv) to request the administrative authorization of the merger and spinoff from the CNV. The motion is submitted to a vote and approved unanimously. In addition, the Board decides, also unanimously, to authorise the Chairman of the Company and Messrs. Martín G. Ríos, María L. Romero, Sebastián Fabrosqui Diaz and/or Eugenia Prieri Belmonte to carry out all filings that may be necessary before the CNV in connection with the abovementioned resolutions, with power to review and to make any sort of filing that may be necessary on behalf of the Company. Finally, the fifth point of the agenda is submitted to the consideration of the members of the Board of Directors. 5) Calling of a General Extraordinary Shareholders' Meeting. The Chairman speaks and states that, in light of the decisions adopted above, the Company's bylaws and legal provisions applicable to the Company, the Board must call a General Extraordinary Shareholders Meeting, which he motions be held on 28 September 2016 at 15.00 on first call, at the Company's headquarters located at Calle Piedras 1743, Autonomous City of Buenos Aires, in order to consider the following points of the agenda: "1) Appointment of two (2) shareholders to sign the meeting minutes. 2) Consideration of the Special Parent Company Only Financial Statements as of 30 June 2016. 3) Consideration of the Special Consolidated Merger and Spinoff Financial Statements as of 30 June 2016. 4) Approval of the Pre-Merger Commitment executed on 16 August 2016 with Southtel Holdings S.A., Vistone S.A., Compañía Latinoamericana de Cable S.A. and CV B Holding S.A.. 5) Consideration of the proposal for the partial spinoff of the Company. Formation of a new sociedad anónima with the equity to be spun-off, approval of its Bylaws, authorisation to carry out acts related to its purpose during the foundational period of the new sociedad anónima. Approval of the "exchange ratio". Limitation of the withdrawal rights pursuant to Section 245, 2nd paragraph of Law No. 19,550. 6) Subject to the decision adopted in connection with point 5) of the agenda, appointment of the members and alternate members of the Board of Directors of the spun-off company. 7) Subject to the decision adopted in connection with point 5) of the agenda, appointment of the members and alternate members of the Supervisory Committee of the spun-off company. 8) Subject to the decision adopted in connection with point 5) of the agenda, appointment of the external auditors of the spun-off company. 9) Subject to the decision adopted in connection with point 5) of the agenda, reduction of the equity capital of the Company as a consequence of the partial spinoff. Request for a reduction in the registered capital stock of the Company that has been authorized to public offering before the National Securities Commission and listing on the Buenos Aires Stock Exchange as a consequence of the partial spinoff." The motion is submitted to the vote and approved unanimously. The Chairman is also authorized to sign the text of the notices for their publication. With no other matters to consider, the meeting is adjourned at 19.00 hs.
Members of the Board: Jorge Carlos Rendo, Alejandro Alberto Urricelqui, Pablo César Casey, Héctor Mario Aranda, Horacio Eduardo Quiros, Ignacio Rolando Driollet, Lorenzo Calcagno, Alberto César José Menzani y Sebastián Salaber
Members of the Supervisory Committee: Carlos Alberto Pedro Di Candia, Raúl Antonio Morán, y Pablo San Martín.
Related Shares:
GCLA.L