Società per Azioni - Cap.Soc. Euro 125.000.000

Caltagirone Editore S.p.A. - Update of the communication of the Board of Directors (as subsequently integrated) issued pursuant to article 103, paragraph 3, of the Legislative Decree no. 58/98 and to article 39 of the Consob Regulation no. 11971/99 ("Issuers' Regulation") concerning the voluntary tender offer launched by Chiara Finanziaria S.r.l. (the "Offer") Recital

On September 7, 2017, Chiara Finanziaria S.r.l., by means of press-release published on the same date pursuant to articles 36 and 43 of the Issuers' Regulation, has announced to have extended the Offer's acceptance period until September 18, 2017.

On September 8, 2017, Chiara Finanziaria S.r.l. has also announced, pursuant to article 43 of the Issuers' Regulation, to have increased the Offer's consideration from Euro 1.00 to Euro 1.22 for each share tendered to the Offer (the "Offer's Increased Consideration" or the "Updated Consideration").

This communication, drafted pursuant to article 103, paragraph 3, of the TUF and article 39 of the Issuers' Regulation, has been approved by the Board of Directors of Caltagirone Editore S.p.A. ("CED") on September 12, 2017 (the "Update Communication"); such document shall be read as integration of, and therefore jointly with, the original communication concerning the Offer drafted pursuant to the same legal provisions, published on July 20, 2017 and integrated on the following July 28, 2017 (the "Issuer's Communication"). Please refer to such Issuer's Communication for any matter not provided or defined herein.

For a complete and full knowledge of all prerequisites, terms and conditions of the Offer please solely refer to the Offer Document and the press-releases published by Chiara Finanziaria S.r.l. on September 7 and 8, 2017. Therefore the Update Communication, as well as the Issuer's Communication, are not meant to substitute in anyway the Offer Document and the press-releases published by Chiara Finanziaria S.r.l. and do not constitute in anyway, nor may be intended as, a recommendation to tender or not to tender in the Offer and do not substitute the judgment of each shareholder in regard to the Offer.

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Meeting of CED's Board of Directors held on September 12, 2017

1.1 Attendees to the meeting of the Board of Directors

At the meeting of CED's Board of Directors held on September 12, 2017, during which the Update Communication was approved, the following directors were in attendance, in person or by means of audio-conference:

  • Francesco Gianni, Chairman;

  • Albino Majore, Managing Director;

  • Antonio Catricalà, Independent Director;

  • Massimo Confortini, Independent Director;

  • Giancarlo Cremonesi, Independent Director;

  • Mario Delfini, Director;

  • Massimo Lapucci, Independent Director;

  • Valeria Ninfadoro, Independent Director.

The Director Mrs. Tatiana Caltagirone justified her absence.

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The following members of the Board of Statutory Auditors were in attendance:

  • Antonio Staffa, Chairman;

  • Maria Assunta Coluccia, Effective Auditor;

  • Federico Malorni, Effective Auditor.

    1. Specification of own or third parties' interests with respect to the Tender Offer

      During the meeting, also pursuant to article 2391 of the Italian Civil Code, the following members of the Board of Directors have reported to hold an interest, personally or on behalf of third parties, with respect to the Offer, specifying the nature, terms, origin and scope and, in particular:

    2. Mario Delfini simultaneously holds the office of Director and Member of the Internal Control Committee of the Issuer and Director of FGC S.p.A. (which is the indirect parent company of the Offeror), as well as of Il Messaggero S.p.A., Quotidiano di Puglia S.p.A., Corriere Adriatico S.p.A., il Gazzettino S.p.A. and Piemme S.p.A., Chairman of the Board of Directors of Leggo

      S.p.A. and sole director of Finced S.r.l. (companies directly controlled by CED);

    3. Albino Majore simultaneously holds the office of Director and Member of the Internal Control Committee of CED, of Director of FGC S.p.A. (which is the indirect parent company of the Offeror) and of Director of Il Messaggero S.p.A., Quotidiano di Puglia S.p.A., Leggo S.p.A., Corriere Adriatico S.p.A., Chairman and CEO of Il Mattino S.p.A., Chairman of Piemme S.p.A., Vice-Chairman of il Gazzettino S.p.A. and sole Director of ITV S.p.A. and PIM S.r.l. (companies directly controlled by CED).

      The abovementioned Directors abstained from voting for reasons of opportunity.

      1. Analized documentation

      2. The Board of Directors of CED, for the purposes of the approval of the Update Communication, in addition to the documents connected to the Offer indicated in the Issuer's Communication, has analyzed the following documentation:

      3. the Issuer's Communication;

      4. the Opinion of the Independent Directors on the Offer;

      5. the press-releases issued by Chiara Finanziaria S.r.l. on September 7 and 8, 2017;

      6. the addendum to the fairness opinion issued by the independent expert of the Board of Directors, Leonardo & Co S.p.A., on September 12, 2017;

      7. the update of the Opinion of the Independent Directors of CED on the Offer, approved on September 12, 2017, before the meeting of the Board of Directors, by the Independent Directors pursuant to Article 39-bis of the Issuers' Regulation, also taking into account the addendum to the fairness opinion issued by the independent expert Prof. Enrico Laghi on September 11, 2017;

      8. the addendum to the fairness opinion issued by the independent expert Prof. Enrico Laghi on September 11, 2017, made available to the Board of Directors by the Independent Directors.

      1. Assessment of the Board of Directors of CED on the fairness of the Offer's Increased Consideration

        In order to evaluate the fairness of the Updated Consideration, it has been deemed appropriate to request to the independent expert appointed by the Board of Directors, Leonardo & Co S.p.A., to express its assessments on the fairness of the Offer's Increased Consideration.

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        1. The addendum to the fairness opinion of the independent expert Leonardo & Co S.p.A.

          In summary, such expert, on the assumption - as confirmed by CED - that, from July 19, 2017 until the date of the issuance of the addendum, no relevant events and/or facts altering the logical system and the evaluation analysis supporting the previous fairness opinion and/or amending the conclusions contained thereto have occurred, and also taking into account the Updated Consideration, has concluded that:

          1. the Updated Consideration includes a premium in respect to the performance of the market stock price of CED recorded during the months prior to the Reference Date. In particular, the Updated Consideration includes a premium equal to 45.3% in respect to the official price of CED's shares recorded as at the Reference Date and equal to 48.4%, 49.0%, 55.9% and 59.1% in respect to the average official price weighted (for the volumes) in respect to 1 month, 3 months, 6 months and 12 months;

          2. the Updated Consideration includes, on the one hand, a premium in respect to the NAV of CED estimated as at the Reference Date - considering an holding discount of 35%, in line with the Italian average - equal to 11.2% and 0.5% assuming to evaluate the "Publishing" business within the NAV, respectively, by applying the transactions multiples methodology (EV/Ebitda) and the multiples of market methodology (EV/Ebitda) and, on the other hand, a discount in respect to the NAV of CED estimated as at the Reference Date - always considering an holding discount of 35% - equal to 31.7% and 36.1% assuming to evaluate the "Publishing" business within the NAV respectively, by applying the DCF methodology and the transactions multiples methodology (EV/Earings);

          3. the premium that the Updated Consideration includes, in respect to both the CED share price as at the Reference Date and the average official price weighted (for the volumes) during the selected different timeframes before the Reference Date, is higher than the premium recognized in similar transactions (i.e. voluntary public tender offers with a cash consideration and an overall amount higher than Euro 30m, carried out in Italy during the period 2007 - 2017 by offerors holding a participation higher than 50% of the issuer' capital before launching the offer).

          4. On the bases of, and subject to the evaluation indicated above, the independent expert appointed by the Board of Directors Leonardo & Co S.p.A. has confirmed to be of the opinion that, as at the date of 12 September 2017, the Offer could be deemed, from a financial point of view, in line - and, consequently, reasonably fair - with the practice in force for similar offers and with the performance of the CED share price and liquidity. For additional details, the addendum to the fairness opinion of such independent expert is attached to this opinion sub Annex A.

          5. Update of the opinion of the Indipendent Directors

            In addition, taking into account that the Offer is subject to the regulations provided for under article 39-bis of the Issuers' Regulations, prior to the approval of the Update Communication, the Independent Directors, whose meeting was held on September 12, 2017, approved the Update of the opinion of the Independent Directors on the Offer, containing the assessments of the fairness of the Increased Offer Consideration.

            To this end, the Independent Directors deemed appropriate to appoint Prof. Enrico Laghi, professor in Business Administration at the University of Rome Sapienza - already appointed as independent expert for the purpose of issuing an opinion on the fairness, from a financial standpoint, of the original Consideration of the Offer - to issue a supplementary opinion on the fairness of the Updated Consideration. The supplementary opinion issued by Prof. Laghi on September 11, 2017, is attached to this press release as Annex B.

            Sede in Roma - 00187 Via Barberini, 28 - tel.06/45412200 - Telefax 06/45412299

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            The analysis of the fairness of the Updated Consideration by the Independent Directors was carried out having as reference the financial analysis methods and the evaluation methods used in the professional practice and shared with the appointed independent expert, Prof. Laghi.

            In this context, the Independent Directors noted, in summary, that:

            1. the Updated Consideration is higher than the value of the target company arising from the analysis of the average stock prices (weighted with respect to the daily trading volumes) of the relevant shares in the last three years;

            2. the Updated Consideration includes an (implied) premium of approximately 45.3% with respect to the official share price of the target company detected during the last full trading day before the announcement of the Offer (June 8, 2017) and respectively 48.5%, 49.1%, 56.0% and 59.1% with respect to the CED average stock price (weighted with respect to the daily trading volumes) as at 1, 3, 6 and 12 months prior to the announcement date of the Offer (June 8, 2017);

            3. the implied premium of the Offer based on the Updated Consideration is higher, in percentage terms, than the premium recognized in the context of the assessed panel of public voluntary offers launched in Italy in recent years;

            4. the Updated Consideration is higher than the CED's fundamental value evaluated through the method of the sum of the parts in case of application, for the purposes of the evaluation of the editorial business, of the method of the market direct multiples and of the comparable transactions multiples;

            5. the Updated Consideration is lower than the Company's fundamental value evaluated through the method of the sum of the parts in case of application, for the purposes of the evaluation of the editorial business, of the Discount Cash Flow method.

            6. In conclusion, subject to and in the light of the foregoing, the Independent Directors of CED, taking into account the findings of the adopted valuation methods and the analyses carried out by the independent expert Prof. Laghi, at the end of their evaluations, deemed that the Updated Consideration offered to the shareholders of the Company (other than the Persons Acting in Concert), at the terms indicated in the Offer Document and according to the press release dated September 8, 2017, is reasonably fair for the shareholders (other than the Persons Acting in Concert) from a financial standpoint, if the same is evaluated - in the social-economical context of CED - taking into account the low liquidity of the shares, the recent market prices detected during the period before the Date of the Announcement, the voluntary tender offer premiums detected in the recent years (for the period 2010-2016) and the method of the sum of the parts in the configuration in which the editorial business has been evaluated by applying the methods of the market direct multiples and of the comparable transactions multiples.

              For more details, the update of the opinion of the Independent Directors is attached hereto as Annex C.

            7. Conclusions and resolutions of the CED's Board of Directors
            8. In the light of the considerations contained in the addendum to the opinion of the independent expert of the Board and in the update of the Independent Directors' opinion concerning (i) on the one hand, the intrinsic value of the Issuer and (ii) on the other hand, the coherency of the Offer, from a financial standpoint, with the practice in force for similar offers and with the trend of the share price and the stock liquidity of the Issuer, the Board of Directors of Caltagirone Editore has considered - in the context of the adequacy test of the Offer and of the Updated Consideration - that the Offer is reasonably fair from a financial standpoint for the shareholders (other than the Relevant Subjects), if

              Sede in Roma - 00187 Via Barberini, 28 - tel.06/45412200 - Telefax 06/45412299

              R.I.Roma 15311/00 - C.C.I.A.A. Roma 935017 - Cod.Fisc. - Part. I.V.A. 05897851001 4

            Caltagirone Editore S.p.A. published this content on 12 September 2017 and is solely responsible for the information contained herein.
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