Seat-Tin.it, merger green light separation share exchange ratios and merger terms set

05/29/2000 - 00:00 PM

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Following on from decisions adopted at the 17 February, 1 March and 15 March 2000 meetings, the Telecom Italia Board, met today in Milan under the chairmanship of Roberto Colaninno, and decided to proceed with the incorporation of Tin.it into Seat, in accordance with the terms and conditions set forth in agreements with Seat Pagine Gialle majority shareholders, and with the company itself, as previously announced to the market.

The integration of these two companies is to take place through a separation and subsequent merger, on the basis of a 1:1 economic value ratio, of Seat Pagine Gialle and Tin.it, in accordance with decisions taken by the Telecom Italia and Seat Boards on 15 March 2000. As regarding the effectiveness of the separation and merger operations, this procedure is conditional upon the obtainment of the approval by the Italian Competition Regulatory Authority by 31 July 2000.

In particular, taking note of reports submitted by advisors Chase H&Q and Morgan Stanley Dean Witter for Telecom Italia and Tin.it, and Credit Suisse First Boston and Lehman Brothers International for Seat Pagine Gialle, and on the basis of Tin.it´s assets and liabilities at 1 May 2000, the Telecom Italia Board has approved the partial demerger of Telecom Italia by transferring to Seat 3,348,922 Tin.it ordinary shares, equivalent to 8.168% of the company´s registered stock.

In exchange for this transfer, Seat Pagine Gialle is to offer:
- 56 Seat ordinary shares of par value 50 lire each for every 1000 Telecom Italia ordinary shares of par value 1,000 lire each, corresponding to 0.056 Seat ordinary shares per Telecom Italia ordinary share;
- 56 Seat ordinary shares of par value 50 lire each for every 1000 Telecom Italia savings shares of par value 1,000 lire each, corresponding to 0.056 Seat ordinary shares per Telecom Italia savings share. The demerger prospectus and associated share exchange must receive the approval of the Telecom Italia Extraordinary Meeting of Ordinary Shareholders, called for 3 July 2000. The share exchange approval decision will subsequently be submitted to a Special Meeting of Telecom Italia Savings Shareholders. Should the Special Meeting not reach quorum, or should the ruling not be adopted, Telecom Italia savings shareholders are to be offered Seat savings shares with the same rights as currently held Telecom Italia savings shares.

To this end, without varying in any way the share exchange ratios set for ordinary shares, a revised share exchange ratio for Telecom Italia savings shares has been set at:
- 80 Seat savings shares of par value 50 lire each for every 1000 Telecom Italia savings shares of par value 1,000 lire each, corresponding to 0.080 Seat savings shares for each Telecom Italia savings share.

This revised share exchange ratio does not alter the economic value set aside for all Telecom Italia shareholders with regard to the demerger.

The Tin.it Board has approved the terms of the merger through incorporation of Tin.it into Seat, which is to take place through a capital increase for Seat as part of the merger itself, at a share exchange ratio of:
- 124.1787 Seat ordinary shares of par value 50 lire each per Tin.it ordinary share of par value 1,000 lire.

The Seat/Tin.it merger is the expression of a desire to establish an Italian leader equipped with the infrastructure, size and entrepreneurial drive necessary to compete with European and worldwide Internet companies. The new company created by bringing together the business operations of Tin.it and Seat will boost growth of the Internet market in Italy.

Echoing the current worldwide trend towards mergers and alliances among major Internet operators, this new company will be in a position to take advantage of major synergies realized through the complementary strengths of Seat and Tin.it.

The new company is also set to enter into a joint venture with Telecom Italia Mobile (TIM) for e-commerce and the provision of Internet content and services via cell phone.

Seat-Tin.it is keen to expand into other markets in Europe and worldwide through partnership agreements and acquisitions. This will enable the company to grow in size, to compete effectively in the international marketplace.