16.06.2016

Impact of the Visa Europe takeover by Visa Inc. transaction

Current Report 

Drafted on:

16.06.2016

Current report No

51/2016

Abbreviated issuer’s name

mBank

Contents: 
With reference to the current report No. 104/2015 dated 24 December 2015 the Management Board of mBank S.A. ("Bank") hereby informs that the Bank received the information regarding the allocation of settlement of the Visa Europe Limited (Visa Europe) takeover by Visa Inc. transaction (the Transaction). The Transaction closing will take place in Q2 2016. mBank S.A. will be one of the Transaction beneficiaries. Pursuant to the information received, as a result of the Transaction settlement, mBank S.A. will receive the following:
- EUR 46.5 million in cash - equivalent of PLN 206.6 million (at the average NBP exchange rate of 16 June 2016),
- 16,878 Series C Visa Inc. preferred shares valued at EUR 16.5 million, equivalent of PLN 73.2 million (based on current conversion rate of preferred stock to common stock of Visa Inc., closing price of Visa Inc. shares on 15 June 2016 and average EBC and NBP exchange rates from 16 June 2016).

In addition, due to a change in the terms of the Transaction settlement, “Earn-out” payment communicated in the current report no 104/2015 has been replaced by an increase in cash payment in Q2 2016 and introduction of a deferred cash payment in Q2 2019. (Deferred Payment). The total amount of Deferred Payment to all Transaction participants will equal to EUR 1.12 bn, with mBank’s share of the Deferred Payment amounting to 0,3582436136%.

Deferred Payment may be subject to some adjustments in the event that one or more of participating entities have ceased to exist without a successor, or if the Visa Europe Member Representative believes that it would be in the interests of the beneficiaries to withhold monies on trust in order to protect the value of the preferred stock.

Series C Visa Inc. preferred stock will be converted to Common Visa Inc. stock. The conversion of all preferred stock will take place in 2028 the latest. Current conversion rate of the preferred stock to common stock is 13.952. It can be subject to a decrease until 2028 due to covered claims paid by Visa during that period.

SIGNATURE OF THE PERSONS REPRESENTING THE COMPANY

Deputy Director of the Compliance

Maciej Mołdawa 16.06.2016