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Board of Directors of PJSC “MegaFon” Approved Recommendations in Respect of the Mandatory Tender Offer for the Purchase of Ordinary Shares of PJSC “MegaFon” Made by “MegaFon Finance” LLC

Jumat, 11 Januari 2019 | 15:09
MOSCOW, RUSSIA - EQS - 10 January 2019 - Public Joint Stock Company "MegaFon" (MoEx: MFON), a pan-Russian operator of digital opportunities ("MegaFon" or the "Company"), announces that on 9 January 2019, the Company's Board of Directors (the "Board of Directors") considered and approved recommendations in respect of the mandatory tender offer (the "Mandatory Tender Offer") made by "MegaFon Finance" LLC ("MegaFon Finance") to acquire securities (ordinary registered uncertified shares) of MegaFon, in the amount of 131,212,843 shares of the Company at a price of RUB 659.26 per one ordinary share (the "Purchase Price").

As previously announced: http://corp.megafon.com/press/news/20181227-1030.html, the Company received the Mandatory Tender Offer on 27 December 2018, following the expiration of the period for statutory review of the Mandatory Tender Offer by the Bank of Russia. MegaFon Finance and its affiliate, LLC AF Telecom Holding, hold in aggregate 78.84% of the ordinary shares of the Company.  The Mandatory Tender Offer was made for 131,212,843 ordinary shares of the Company held by the remaining shareholders at the Purchase Price.

The Board of Directors considers that the Purchase Price is justified and complies with the requirements of Federal Law No. 208-FZ on Joint Stock Companies dated 26 December 1995, as amended (the "JSC Law"). In particular, in reviewing the Purchase Price, the Board of Directors considered, among other things, the fact that the Purchase Price exceeds the average weighted price of one ordinary share of the Company on Moscow Exchange over a period of six months preceding the date of filing of the Mandatory Tender Offer with the Bank of Russia which according to the information provided by Moscow Exchange was RUB 570.50 per one ordinary share; and that, pursuant to the information contained in the Mandatory Tender Offer document, the Purchase Price corresponds to the maximum price at which MegaFon Finance or its affiliates acquired or assumed an obligation to acquire the ordinary shares of the Company during a period of six months preceding the date of submission of the Mandatory Tender Offer to the Company.

The performance by MegaFon Finance of its obligation to pay for the purchased Shares is secured by a bank guarantee issued by Gazprombank (Joint Stock Company) in respect of the total amount of the purchase price, and if MegaFon Finance defaults on its obligation to pay for the shares acquired pursuant to the Mandatory Tender Offer, the shareholders may demand payment under the bank guarantee.

Based on the information considered by it, including the information above, the Board of Directors recommended that the Company's shareholders accept the Mandatory Tender Offer.

The Board of Directors draws the attention to the fact that the market price of the shares of the Company may be subject to wide fluctuations in response to a number of circumstances, which are beyond the Company's control, including in response to micro- and macro-economic factors, changes in the prices of the Company's products and services rendered by the Company, changes in the profitability of the Company's business, estimates of analysts, amendments to applicable legislation, decrease of the number of securities of the Company trading on the organised securities markets as a result of the acquisition of shares pursuant to the Mandatory Tender Offer or other events or circumstances.

The Mandatory Tender Offer will remain open for 70 days from the date of receipt of the Mandatory Tender Offer by the Company (i.e., from 28 December 2018 to 7 March 2019, inclusive). The Mandatory Tender Offer, including the recommendations of the Board of Directors in respect of the Mandatory Tender Offer, will be communicated to the shareholders of the Company to whom it is addressed, according to the procedure set forth by the JSC Law and the charter of the Company for notifying of the general shareholders' meeting, i.e. by posting it on the Company's website at http://megafon.ru on the page used by the Company for the purposes of disclosure pursuant to the requirements of the Russian legislation (http://corp.megafon.com/; http://corp.megafon.com/investors/;  http://corp.megafon.com/investors/stock_and_capital/mandatory_tender_offer/).

In accordance with the provisions of the JSC Law the mandatory tender offer is made to the shareholders -- holders of ordinary shares of the Company. The holders of Global Depositary Receipts representing the ordinary shares of the Company ("GDRs") should be able to participate in the Mandatory Tender Offer following the cancellation of the GDRs held by them, receipt of the respective number of the underlying ordinary shares, and submission of the application to sell the securities (ordinary shares) pursuant to the Mandatory Tender Offer, on the terms and conditions of the Mandatory Tender Offer and within the applicable deadlines.

Pursuant to the JSC Law a shareholder has a right, but not an obligation, to accept the Mandatory Tender Offer. Shareholders should make their own decision as to whether to sell their shares pursuant to the Mandatory Tender Offer and, if so, how many shares to sell. Prior to making any decision to sell their shares pursuant to the Mandatory Tender Offer, the shareholders of MegaFon should carefully read and consider the terms and conditions of the Mandatory Tender Offer and Articles 84.2 and 84.3 of the JSC Law as well as the Information Letter in Relation to the Mandatory Tender Offer and the recommended form of an application to sell ordinary shares of PJSC "MegaFon" available on the MegaFon's website at http://corp.megafon.com/investors/stock_and_capital/mandatory_tender_offer/. Shareholders of MegaFon are urged to consult with their financial and tax adviser, and legal counsel if they have any questions in relation to the Mandatory Tender Offer.

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