Exclusive Networks SA (EXN) Earnings Call Transcript & Summary

Ladies and gentlemen, dear shareholders, on behalf of the Board of Directors of Exclusive Networks, I would like to welcome you to our Ordinary General Meeting. As with our previous meetings, the present Ordinary General Meeting will be held in English. Headphones are available to follow the discussion in French, if you wish. The Ordinary General Meeting is also audio broadcasted in both languages on the company's website to allow our shareholders who cannot attend in person to participate remotely. I would like to thank those of you who dialed in to follow this important event in the shareholder live remotely. I would also like to thank our shareholders for their mobilization over the last weeks and in particular, for their votes. I finished my brief introductory remarks, and now we are going to open this general meeting more formally. I therefore declare this General Shareholders' Meeting for open. Firstly, and in line with regulatory requirements, we are going to set up the meeting committee. Mrs. Barbara Thoralfsson being unable to attend this general meeting in person, I will chair it in accordance with the decision of the Board of Directors of September 19, 2024. Ms. Barbara Thoralfsson will be attending the meeting via video conference and will be able to hear us and participate in the general meeting, if necessary. I would like to ask Mr. Anthony Oliver, representing Everest Holdco Limited, the shareholder with the largest number of voting rights and [ Mr. V ladislaaci ], representing Bank Public the Invest [indiscernible] to act as scrutineers. I would like to thank them for accepting these functions. I propose to appoint Mr. Jean-Philippe Carbonel , Group General Counsel of Exclusive Networks S.A. as the Secretary of the meeting. The committee is thus fully constituted. I'm also joined today by Mrs. Nathalie Buhnemann, Chief Financial Officer of the group. The company's KPMG and Mazars, the statutory auditors of our company were duly convened. And I will now give the floor to the Secretary, Mr. Jean-Philippe Carbonel, to report on the usual formalities.

Sorry, ladies and gentlemen, dear shareholders, good afternoon. I would like to remind you that you have been convened to this Ordinary General Meeting by decision of the Board of Directors of September 19, 2024. This same Board meeting granted all powers to Jesper Trolle to chair this meeting. The agenda of the general meeting and the text of the resolutions were published in the notice of meeting in the French Gazette [indiscernible] on September 23, 2024. The notice of meeting was also published on October 9, 2024, in the French Gazette [indiscernible] as well as in the Legal Notices section of the newspaper, Mediax. The regulatory documents and information, which are currently displayed on the screen, Yes, they are, have been sent to the shareholders and published on the company's website 21 days ahead of the present meeting in accordance with French law. They were also made available to the shareholders at Exclusive Networks S.A. registered office 15 days ahead of the meeting in accordance with French regulation. The joint statutory auditors were also invited to attend by registered letter with acknowledgment of receipt dated October 9, 2024. The list of shareholders is also available to the shareholders. The attendance sheet will be made available to shareholders as soon as it's final and certified as accurate by the members of the committee at the end of this meeting. In accordance with the legal provisions, the required documents are deposited before the committee. I also would like to remind you that the shareholders who were unable to attend today's Ordinary General Meeting and vote at the meeting were able to cast their votes before the meeting either by voting remotely by sending their instruction by post and by Internet via the secure vote access platform or by giving a proxy to the Chairperson of the Board of Directors or any other proxy of their choice. On the quorum now, I would like to point out that the total number of shares to be taken into account for the calculation of the quorum is 90,657,054 shares, representing the same numbers of voting rights. As this Ordinary General Meeting is convened on first notice, it requires a minimum quorum of 20% of the shares with voting rights corresponding to 18,131,411 shares. After considering the votes and proxies received before the general meeting, online votes and votes by post, I note that the quorum provision stands according to the attendance sheet at 88.78%, representing 80,485,644 shares. A definitive quorum will be given to you just before the votes on the resolutions. Consequently, having met the quorum required by law, the meeting is legally constituted and can validly deliberate as an Ordinary General Meeting. The agenda of the shareholders' meeting is currently displayed on the screen. Two resolutions will be submitted to your vote. As already mentioned, the full text of the resolutions was published on the notice of meeting on September 23rd as well as in the convening notice. Under the first resolution, you will be asked to vote on an exceptional cash distribution of EUR 5.29 per share. The second and last resolution is intended to confer the necessary powers for legal formalities. I confirm that no shareholders have exercised their right to have items or draft resolutions including on the agenda of this general meeting. I now give the floor to Mr. Jesper Trolle, CEO, to provide a detailed presentation of the exceptional distribution.

Thank you, Jean-Philippe. So as announced on July 24, 2024, Exclusive Networks have received a binding offer from Clayton Dubilier and Rice, also known as CD&R in consortium with Exclusive Networks majority shareholder, Everest UK Holdco Limited, an entity controlled by Pimira, with the support of its founder, Olivier Breittmayer to acquire a majority shareholding in Exclusive Networks at a price of EUR 18.96 per share, following an exceptional distribution of EUR 5.29 per share, resulting a total amount of EUR 24.25 per share. Following the Block acquisition, the consortium would file a simplified mandatory tender offer on the remaining shares in Exclusive Networks at the same price of EUR 18.96 per share. followed by a squeeze-out if the legal conditions are met at the end of the offer. In the context of this transaction and as announced, Exclusive Networks would refinance its existing indebtedness. And in this context, you are today calling an ordinary shareholders' meeting to approve an exceptional distribution. Your Board of Directors, based on the recommendation of the ad hoc committee, after reviewing the solvency opinion issued by Finexi, the independent expert appointed by the Board of Directors, has welcomed the proposed transaction, approved the refinancing of the company and the principle of this exceptional distribution during its meeting on September 19, 2024. This exceptional distribution of EUR 5.29 per share, subject to your approval, would be paid after the regulatory approvals for acquisition are obtained, including antitrust, foreign investment, and foreign subsidiary clearances, and prior to the closing of the block acquisition. This distribution will be funded with priority from other reserves in the amount of EUR 53,676,521.01 and for the remaining part from share premium in the amount of EUR 431,259,291.93, leading to a total exceptional distribution of EUR 484,935,812.94. I will now give the floor back to Mr. Jean-Philippe Carbonel, Group General Counsel, to give you a detailed presentation of the work and conclusions of the Ad hoc Committee. Jean-Philippe?

As explained by Jesper Trolle, an ad hoc committee was formed by the Board of Directors on May 21, 2024, in the context of the transaction. This ad hoc committee consists of independent members to oversee the fairness and transparency of the process. The ad hoc committee members are Nathalie Buhnemann`, Chairperson of the Audit and Risk Committee; Marie-Pierre Dubaancour, Chairperson of the Nomination and Compensation Committee; Barbara Thoralfsson, Chairperson of the Board of Directors and member of the Audit and Risk and the Nomination and Compensation Committee. The ad hoc committee met on several occasions to review the offer from CDN, including on June 2024, when it recommended appointed Phinexi as the independent experts to issue a fairness opinion in the context of the transaction and a solvency opinion for the exceptional distribution. On July 23, 2024, the committee recommended the exceptional distribution. Following the closing of the block acquisition, Phinexi will issue a fairness opinion on the financial terms of the tender offer and the squeeze-out, after which the Adhoc committee will issue a recommendation on the offer.

Thank you, Jean-Philippe . Now let's continue with the agenda. I would like to point out that the company has not received any written questions prior to this general meeting. I therefore give the floor to those of you who wish to ask questions. Please raise your hand so that you can be identified and a microphone can be brought to you. As indicated in the introduction to this meeting, you can ask your questions in either French or in English. The floor is now open for questions.

[Interpreted] What is the share of shares that will be divested about a block divestment, but what is the share of the total share capital that, that represents?

[Interpreted] 66%. So 2/3 then. So EUR 1.96, I assume that's the divestment price. Right. The total offer comes to EUR 24, including the EUR 5 of exceptional distribution. Once the Block acquisition will be finalized, the company can be delisted, but there's a whole procedure for it, but this can only happen after the Block acquisition is completed. So the company will be delisted as announced in the media.

[Interpreted] I have an observation. In your introduction, you said that the documents pertaining to this general meeting were made available to the shareholders 14 days prior at the company head office. I came yesterday. I wanted that information. So I showed up at your head office and reception told me that information is not available. No attempt was made to put me in contact with the human being. The only information I have received is that I should be here.

[Interpreted] Well, we need to fix that process cancer. Apologies. We didn't know that you would be coming. Our instructions didn't trickle all the way down. Our apologies.

[Interpreted] Well, I went on your website, but since I'm not that gifted, I probably didn't read the sections concerning the AGM. I got another question. if I may. Yes. So if I've understood correctly, if you obtain 90%, if the new shareholder obtains the 90%, he'll make a withdrawal delisting request.

[Interpreted] Absolutely, that's the plan.

And how did you determine the share price portion and cash distribution?