Current reports

Acting pursuant to art. 80 of the Act on Public Offering, Terms and Conditions for Introducing Financial Instruments to an Organized Trading System and on Public Companies of 29 July 2005 (the "Public Offering Act"), the Management Board of Netia SA (the "Company") hereby presents its position regarding the public tender offer to subscribe for the sale of the Company’s shares, referred to in art. 72 sec. 1 item 1 of the Public Offering Act, announced on 19 December 2005 (the "Tender Offer") by Novator Telecom Poland II S.a.r.l. with its registered office in Luxemburg, 560A, rue de Neudorf, L-2220 Luxemburg ("Novator").

• Grounds for the Management Board’s position

  The Company’s Management Board reached the position presented below based on the performance or commissioning of the following activities:

  • An assessment of the information presented by Novator in the Tender Offer.
  • A review of the market prices of the Company’s shares three and six months prior to the announcement of the Tender Offer, and of the information on the purchase or disposal of material stakes of the Company’s shares over a period of 12 months preceding the announcement of the Tender Offer.
  • A review and assessment of publicly available information on the operations, financial standing and the current market pricing of shares of selected companies from Poland’s telecommunication sector.
  • A review of publicly available information on selected recent strategic capital investments and capital involvement in telecommunication companies, with a special focus on the purchase of shares and equity securities of entities whose operations correspond to the Company’s current operations.
  • Other assessments we deemed necessary in connection with the Management Board’s position.

• Qualifications

  The Management Board’s position below is subject to the following qualifications:

  • Excluding any third-party entities' opinions, in connection with the preparation of this position, neither the Company nor persons signing this position on behalf of the Company took any special actions aimed at searching, collecting, systematizing or verifying information that does not come from the Company. None of the above-mentioned persons commissioned any other entities to take such, or similar, actions for them. On this basis, we formulated the position.
  • With the exception of the opinions of third-party entities referred to in section III of this position, the Company and persons signing the Management Board’s position regarding the Tender Offer did not commission the preparation of any additional studies or analyses regarding the Tender Offer and the Management Board’s position regarding the Tender Offer presented below.
  • With the exception of information on the Company’s operations and organization, the Company and persons signing this Management Board’s position regarding the Tender Offer, is not responsible for the accuracy, reliability, completeness or adequacy of the information on the basis of which this Management Board’s position regarding the Tender Offer, has been formulated.
  • The persons signing this Management Board’s position regarding the Tender Offer, are not in possession of any confidential information as construed in the Act on Trading in Financial Instruments of 29 July 2005, which should have been disclosed, and to the best of their knowledge are not aware of any facts pertaining to the Company or its shares that are or might be considered as confidential information material for assessing the Tender Offer that have not been disclosed by the Company, according to the provisions of law. At the same time we point out that on 8 November 2005 (cf. press release no. 91/2005 dated 13 October 2005) the Company’s consolidated quarterly report for 3Q2005 comprising an abridged quarterly unit report, prepared according to the International Financial Reporting Standards (QSr form), including also, among other things, the factors which, in the Company’s opinion, may impact the Company results in at least the next quarter, was published. At that time, the Company also published a press release comprising selected operational and financial data for the quarter. The deadline for submission of the next press release with the consolidated results of the Company’s capital group for the year ended 31 December 2005 and for 4Q2005 is 1 March 2006.
  • In no case does this Management Board’s position regarding the Tender Offer, constitute a recommendation to acquire or dispose of the financial instruments referred to in art. 42 of the Act on Trading in Financial Instruments of 29 July 2005. The Company’s Management Board points out that other estimates of the value of the Company may exist.
  • Each investor making an investment decision in connection with this Management Board’s position regarding the Tender Offer, is obliged to perform its own analysis of the investment risk relating to the sale or acquisition of financial instruments on the basis of the overall information made available by the Company in performance of its disclosure obligations and the information included in the prospectuses published by the Company, within the scope in which they remain in force, including obtaining individual advice and/or recommendations of authorized advisors to the extent required to take a relevant decision. In particular, each shareholder of the Company intending to respond to the Tender Offer should perform an assessment of the investment risks.

• Opinion of a third-party entity

  Pursuant to the Company’s Management and Supervisory Boards resolutions, the Company commissioned Rothschild Polska Sp. z o.o. to prepare an opinion on whether the price offered for the Company’s shares in the Tender Offer reflects the fair value of the Company. Such opinion of the third-party entity on the price of the Company’s shares in the Tender Offer is attached to this position of the Management Board.

  Opinion of Rothschild Polska Sp. z o.o.

• Position of the Company’s Management Board

  Considering the above-mentioned grounds for our position, including the information contained in the Tender Offer and the aforementioned qualifications and limitations, the Company’s Management Board:

  • expresses a positive opinion on the Tender Offer;
  • determines that the price of PLN 6.15 per share that the Company offered in the Tender Offer is higher than the average prices of the Company’s shares on the regulated market three and six months prior to the announcement of the Tender Offer; and
  • the price offered in the Tender Offer corresponds to the fair value of the Company according to the information in possession of the Company’s Management Board as at the date of preparing this position.

  In the Management Board’s opinion, the announcement of the Tender Offer is not in conflict with the Company’s interests since the Tendering Party intends to support the Company’s existing strategy and support the Company in its development plans. In light of the information contained in the Tender Offer, there are no grounds to assert that the announced Tender Offer will impact the employment level in the Company or result in a change of the location of its operations. According to the representation referred to in the Tender Offer, the Tendering Party has significant experience in investing in shares of telecommunication operators in Europe and intends to use this experience for the benefit of the Company. In light of the information presented in the Tender Offer, Novator intends to increase its capital involvement in the Company to up to 25% minus one share of the total number of the Company’s shares, as an attractive position for long-term investments.

  In the opinion of the Management Board, the Tender Offer does not pose a threat to the continuity and scale of the Company’s operations and its further development. Interest in investment in the Company’s shares expressed through the announcement of the Tender Offer attests to the positive assessment of the Company’s development prospects.