Cyfrowy Polsat S.A. — M&A Activity 2021

Feb 26, 2021

Subject Disclosure of delayed insideinformation regarding the execution of an exclusivity agreement withrespect to a received purchase offer for shares representing 100% of theshare capital of Polkomtel Infrastruktura sp. z o.o. and thecommencement of negotiations with the potential buyer

Pursuant to Article 17 paragraphs 1 and 4 ofRegulation (EU) No. 596/2014 of the European Parliament and of theCouncil of 16 April 2014 ("MAR"), Cyfrowy Polsat S.A. (the "Company,""Cyfrowy Polsat," the "Issuer") provides below the inside informationregarding the execution of an exclusivity agreement related to apurchase offer received by Cyfrowy Polsat S.A. and Polkomtel sp. z o.o.for 100% of shares in Polkomtel Infrastruktura sp. z o.o. (an indirectsubsidiary of the Issuer and a direct subsidiary of Polkomtel sp. zo.o., a direct subsidiary of the Issuer), as well as the commencement ofnegotiations of the detailed terms of the sale of shares in PolkomtelInfrastruktura sp. z o.o. and the documentation necessary to effectuatethat sale (the "Inside Information").

The disclosure of the Inside Information tothe public was delayed on 11 February 2021 on the basis of Article 17paragraph 4 of MAR.

Contents of the delayed Inside Information:

"The Management Board of Cyfrowy Polsat S.A.(the "Company," "Cyfrowy Polsat," the "Issuer") with reference toCurrent Report No. 28/2020 of 23 September 2020 concerning the decisionto commence a review of strategic options related to a potentialdisposal of part of the mobile telecommunication infrastructure ofPolsat Group, announces that on 11 February 2021, in the course of aprocess organized and conducted with a view to attracting a potentialbuyer for part of Polsat Group's telecommunication infrastructure, theCompany and Polkomtel sp. z o.o. ("Polkomtel") concluded an exclusivityagreement with Cellnex Telecom S.A. with its registered office inMadrid, Spain (the "Potential Buyer") with respect to negotiations of asale of up to 100% of shares of Polkomtel Infrastruktura sp. z o.o.("Polkomtel Infrastruktura") (an indirect subsidiary of the Issuer and adirect subsidiary of Polkomtel, a direct subsidiary of the Issuer). Theagreement was concluded in relation to a purchase offer for 100% ofshares in Polkomtel Infrastruktura received from the Potential Buyer.The Potential Buyer was granted exclusivity to negotiate up to andincluding 25 February 2021. Additionally, the Issuer and Polkomtelcommenced negotiations with the Potential Buyer of detailed terms of thepotential sale of shares in Polkomtel Infrastruktura and thedocumentation necessary to effectuate that sale.

The Company and Polkomtel contemplate a saleof up to 100% of shares in Polkomtel Infrastruktura, depending on thenegotiated detailed terms of sale of shares in Polkomtel Infrastrukturaand the documentation required to consummate it, the terms ofcooperation with the Potential Buyer and Polkomtel Infrastruktura in thescope of, among other things, the use of the telecommunicationinfrastructure owned by Polkomtel Infrastruktura after the sale ofshares in Polkomtel Infrastruktura to the Potential Buyer and on theoutcome of the abovementioned negotiations.

The Issuer points out that the negotiationsare at an early stage and their outcome, as well as the likelihood oftheir successful completion, are still uncertain. Also, it may not beexcluded that the Company receives purchase offers for the shares inPolkomtel Infrastruktura also from other entities.

The Company will report on further steps inthe pending negotiations in separate current reports.

The Company also announces that no decisionshave been made so far as to choosing a particular strategic scenario andit is not certain if and when such a decision will be made in thefuture. The Company will publish updates regarding the review process incompliance with the binding provisions of law."

Substantiation of the delay in disclosure ofthe Inside Information to the public:

The Management Board believes that at thetime the decision was made to delay the disclosure of the above InsideInformation, it met the conditions set out in MAR and the guidelines ofthe European Securities and Markets Authority for delaying disclosure ofinside information of 20 October 2016 .

A positive outcome of the negotiations andtheir potential conclusion depended on the progress of the conductednegotiations regarding the sale of up to 100% of shares in PolkomtelInfrastruktura. Additionally, at the time when the Issuer engaged inthese actions, their outcome and, inevitably, the likelihood of anactual positive conclusion of the negotiations, were uncertain.

The Management Board of the Issuer believesthat in the above situation, a prompt disclosure of the information onthe commenced negotiations with the Potential Buyer would entail a riskof infringing the legitimate interests of the Issuer and its group by itpossibly having an adverse effect on the progress and outcome of theprolonged negotiations process, as a result of compromising the Issuer'snegotiating position. Disclosing the information could have entirelyfrustrated the possibility to successfully complete the negotiations.The Issuer and Polkomtel received the offer in an organized competitiveprocess in which other entities also participated.

In particular, disclosing the information onthe Potential Buyer's interest in the acquisition of 100% of shares ofPolkomtel Infrastruktura could affect the price of the Company sharesbefore the Company's Management Board and the Management Board ofPolkomtel decided to take actions aimed at selling up to 100% of sharesof Polkomtel Infrastruktura, as well as on the course of the saleprocess conducted by the Company and Polkomtel. The occurrence of any ofthese circumstances could have an adverse effect on the achievement ofthe business and financial goals expected by the Issuer. It should alsobe emphasized that the exclusivity was only granted to the PotentialBuyer for a very short period of time, in an organized, competitiveprocess conducted by the Issuer and Polkomtel.

Furthermore, given that the outcome of thepending negotiations was difficult to predict, the Management Boarddetermined that public disclosure of the Inside Information might resultin misleading investors as to the likelihood of a positive conclusion ofthe negotiations, the intention to sell up to 100% of shares inPolkomtel Infrastruktura, as well as cause general public tomisinterpret such information and its potential effect on the Issuer'svalue.

In the opinion of the Management Board ofthe Company, there were no reasons to believe that a delay in thedisclosure of the Inside Information could be misleading to the public,in particular due to the absence of any earlier public announcementsfrom the Company concerning the matter to which the Inside Informationpertains, other than general information on the decision to commence areview of various strategic options related to a potential sale of partof the telecommunication infrastructure of the Polsat Group which waspublished on 23 September 2020 in Current Report No. 28/2020 and whichis not contrary to the Inside Information.

In the opinion of the Management Board ofthe Company, maintaining the confidentiality of the Inside Informationwas assured, in particular, by the internal information circulation andprotection procedures implemented on the Company group's level, whichinclude the existence of list of individuals authorized to access thecontemplated Inside Information, as required under Article 18 of MAR.This list of individuals was systematically monitored and updated on anas-needed basis.

Considering the legitimate interests of theIssuer and its shareholders, and with a view to complying with the legalrequirements of MAR, the Issuer will issue a separate report to announcea successful completion of the negotiations, as the case may be, andproceeding to the implementation of the actions described above, as wellas on the terms of these actions, should such information be classifiedas inside information.

Inside Information may be made public beforethe lapse of that time if the Issuer enters into conditional agreementsor other arrangements whereby the parties will agree to execute theabove actions, or if a decision is made as to the sale of up to 100% ofshares in Polkomtel Infrastruktura.

The Inside Information will not be disclosedto the public if it ceases to be classified as inside information beforethe scheduled date of its publication, in particular as a result of theIssuer or Potential Buyer deciding to withdraw from the negotiations.

Pursuant to Article 17 paragraph 4 of MAR,the Company will notify the Polish Financial Supervision Authority ofthe delay in disclosure of the Inside Information, stating the reasonsfor the delay, immediately upon the publication of this Report.