GPW - Giełda Papierów Wartościowych w Warszawie S.A.

M&A Activity • Sep 18, 2020

Current Report 21/2020Date: 18 September 2020Topic: Conclusionof a Term Sheet with the Central Bank of Armenia in connection withnegotiations concerning the purchase of interest in the ArmeniaSecurities ExchangeLegal basis: Article 17(1) MAR - insideinformationContent:Further to Current Report 20/2020 of 18September 2020, the Management Board of the Warsaw Stock Exchange("GPW", "Company", "Issuer") hereby announces the conclusion of a TermSheet of 18 September 2020 with the Central Bank of Armenia ("CBoA") inconnection with negotiations concerning the purchase ("Deal") of amajority interest representing 65.00% of the share capital of theArmenia Securities Exchange ("AMX"). Established in Yerevan, AMXorganises trade in financial instruments and operates a clearing houseand a settlement institution for trade in financial instruments inArmenia.The Central Bank of Armenia holds 85% of AMX. Theremaining 15% are AMX's treasury shares. Under the memorandum, CBA willraise its stake to 90% and GPW will subsequently buy 65% of AMX fromCBA. After the deal, CBA will hold 25% of AMX and the remaining 10% willbe acquired by a third party to be named by GPW.The AMX Group'sconsolidated revenue stood at PLN 6.4 million in 2019, EBITDA stood atPLN 2.0 million, net profit stood at PLN 1.3 million. The AMX Group'stotal assets stood at PLN 6.5 million as at 31 December 2019.Thepreliminary non-binding estimated valuation of 100% of AMX equity isequal to the company's book value as at 30 June 2020, i.e., approx. PLN5.8 million.The potential purchase price of interest in AMX tobe paid by GPW will be confirmed after the completion of the duediligence.As a part of its analyses preceding the execution ofthe term sheet, GPW has defined a list of more than a dozen potentialstrategic projects geared at long-term development of the ArmeniaSecurities Exchange.In the next step, GPW will carry out a duediligence, draft a five-year development plan for the Armenia StockExchange in partnership with CBA and AMX, and define the final terms ofthe investment agreement, which may be different from the frameworkconditions.Under the Term Sheet, the Parties have laid down thegeneral terms and conditions of further negotiations aiming at potentialconclusion of an investment agreement. The final provisions of theinvestment agreement may differ from the general terms and conditionslaid down in the Term Sheet. The terms and conditions of the Term Sheetare not binding. The conclusion of an investment agreement whereby GPWwould acquire interest in AMX is subject among others to a due diligenceto be conducted by GPW as well as necessary corporate approvals.TheCompany will announce next steps of the process in dedicated currentreports.Legal basis: Article 17(1) of Regulation (EU) No596/2014 of the European Parliament and of the Council of 16 April 2014on market abuse (market abuse regulation) and repealing Directive2003/6/EC of the European Parliament and of the Council and CommissionDirectives 2003/124/EC, 2003/125/EC and 2004/72/EC (EU Official JournalL 173) ("MAR").