Cyfrowy Polsat S.A. — M&A Activity 2016

Feb 29, 2016

Current Report No.7/2016

Report Date:February 29,2016

Subject:Indirectacquisition of shares in Litenite Limited and shares in Midas S.A.

The Management Board ofCyfrowy Polsat S.A. (the "Company") announces that on 29February 2016 Polkomtel sp. z o.o. ("Polkomtel"), anindirect subsidiary of the Company, and Ortholuck Limited with itsregistered office in Cyprus ("Ortholuck") concluded a sharepurchase agreement ("SPA"), whereby Polkomtel purchasedfrom Ortholuck 100% of shares in Litenite Limited, a company with itsregistered office in Cyprus ("Litenite"), a direct owner of976,542,690 shares of Midas S.A. ("Midas"), representing65.9975% of the total number of votes and the share capital of theCompany ("Midas Shares").

In consequence, on 29February 2016, among others, the Company and Polkomtel, indirectlyacquired the aforesaid block of Midas Shares, thus becoming indirectdominant entities of the Midas group which includes, in addition toMidas, the companies: Aero 2 sp. z o.o., Altalog sp. z o.o. and SferiaS.A. Since both the Company and Polkomtel (the indirect purchasers ofthe Midas Shares) and Ortholuck (the indirect seller of the MidasShares) are indirect subsidiaries of Mr. Zygmunt Solorz-Żak, allentities participating in this transaction are members of the samecapital group.

According to the SPA, theconsideration for 100% of the shares in Litenite acquired by Polkomtelunder the SPA was EUR 1 (one). The calculation of the considerationreflects the fact that as the net indebtedness of Litenite, calculatedas the difference between the value of net liabilities and cash, wasapproximately PLN 788 million as at 31 January 2016, and the only assetsof this company, other than cash, were the Midas Shares of a similarvalue.

The indirect acquisition ofthe Midas Shares by the Company is considered a strategic long-terminvestment of the Company's group. It is planned to continue thecooperation between the Midas group and the Company's group, and tointegrate the Midas group into the corporate structure of the Company'sgroup. This process may generate additional synergies and translate toimproved transparency of the ownership structure of the Company's group.