Announcement.

DELKO SA (27/2018) Disclosure of delayed confidential information about the commencement of negotiations. Signing a preliminary conditional share sale agreement.

Delko S.A. Management (hereinafter the "Company") informs that on May 30, 2018, it released the public disclosure of confidential information. The confidential information about the start of negotiations regarding the acquisition by Delko SA of shares in Megana Sp. z o.o. based in Krakow. The main reason for delaying the publication of confidential information was the protection of the legitimate interests of the Company, i.e. protection against the potentially negative impact of the disclosure of confidential information on the course of negotiations.
As a result of completed negotiations, on November 21, 2018, Delko S.A. signed a preliminary conditional sale agreement for 3001 (three thousand one) shares in Megana Sp. z o.o. with its registered office in Kraków ("the Company"), representing 100% of the share capital of the Company and 1 (one) share in the company Kama Sp. z o.o., for a purchase price of PLN 2,800,000 (two million, eight hundred thousand zlotys).
In accordance with the signed Agreement Delko S.A. will carry out legal and financial audits in the Megana Capital Group.
The price set for the aforesaid transaction will be PLN 2,800,000.00 (in words: two million and eight hundred thousand zlotys).
If as a result of an audit of the Megana Capital Group, it will turn out that circumstances recognized by Delko S.A. will be disclosed. for the legal or financial problems affecting the assets of the Company or its subsidiaries, the Parties will take measures to establish the rules for a consistent reduction of the purchase price. If the Parties fail to reach an agreement in terms of price reduction, neither Party shall be obliged to enter into the Promised Contract and the Agreement shall terminate the Parties as of February 15, 2019, unless the Buyer decides to conclude the Promised Agreement at that date for the Purchase Price.
The Parties shall be obliged to adhere to the Final Agreement referred to in the text of the Preliminary Agreement, provided that all the following Conditions are met:
a) the Buyer receives the consent of the President of UOKiK for (i) purchasing shares or (ii) ineffective expiration of the deadline for issuing this decision, (iii) or returning to the Buyer by the President of UOKiK, pursuant to art. 95 paragraph 1 point 1 of the Competition Protection Law, notification of the intention to make a concentration due to the fact that the intention to concentrate is not subject toinvention;
b) the Buyer will receive a certificate confirming that neither the Company nor the Partners nor Subsidiaries are in arrears with the payment of taxes, fees and social and health insurance premiums;
c) the Party or any third party will not receive a decision issued by any competent court or body limiting or prohibiting the performance of any obligation contained in the Agreement, and no such order or ordinance remains in effect;
d) Declarations, warranties, commitments and assurances submitted by the Sellers in the Agreement and during the Audit will be completed and are in accordance with the factual state at the time of submission and will be in accordance with the factual situation on the Disposal Date, except for statements made for a specified period day and for a specific period which were in accordance with the actual state of the day or for a specific period;
e) The buyer will receive a document containing legally effective consent of all the relevant bodies of the Company and Kama Sp. z o.o., for the conclusion of the Promised Contract;
f) the Buyer will receive a document containing legally effective statements of persons entitled to acquire Shares to waive the right to acquire Shares.
g) All agreed securities specified in the Agreement will be established;
h) The Sellers will submit to the Buyer a written statement covering rental, sublease, tenancy and sub-lease agreements for business premises in which the commercial activities of the Company and its subsidiaries are carried out.
The MEGANA Group operates in the area of ​​"retail stores with a predominance of groceries".
The Megana Group operates 24 general grocery stores under its own brand, located in the city of Krakow and other cities. The Group also includes 57 franchise stores operating under the Nasza Nasze Avita brand. This brand has been recognized on the local market for over 20 years.
The Megana group is integrated commercially and informatically. The seat of the Group is Krakow.
Shops are located in the Małopolskie, Śląskie, Opolskie and Podkarpackie voivodships.
The employment in the Megana Group is 237 people.
In 2017, consolidated results of the Megana Group amounted to:
Total revenue PLN 88,834 thousand PLN
EBITDA 413 thousand PLN
PROFIT PLN 126 thousand PLN
We will provide the effect of the transaction on the Group's financial results in a separate onemessage - after carrying out the necessary actions. Nevertheless, in 2019 they should not be lower than those achieved in 2017.
Synergy effects from commercial consolidation with other Delko Group companies may also be significant. The size of this synergy will be known within 14 months.
Total after finalizing the purchase transaction of Megany Sp. z o.o. and transactions included in the communications in current reports No. 25/2018 and current report No. 26/2018, the potential of Delko Group in the field of retail trade will be: 82/68 own stores, 80 of which are foodstuffs,
- 833 franchise stores ,
- net retail sales of PLN 388 million per year.

Source: company website, investor relations, current and periodic reports.

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Company information
Company name:Delko SA
ISIN:PLDELKO00019
NIP:785-10-03-396
Adress: ul. Gostyńska 51 63-100 Śrem
Phone:+48 61 6705757
website:www.delko.com.pl

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