Update of Statement of the Board of Directors of Rcs

UPDATE OF STATEMENT OF THE BOARD OF DIRECTORS OF

RCS MEDIAGROUP S.P.A. pursuant to Article 103, paragraphs 3 and 3-bis of Legislative Decree No 58 of 24 February 1998, as amended, and Article 39 of the Consob Regulation adopted by Resolution 11971 of 14 May 1999, as amended, relating to the

VOLUNTARY PUBLIC EXCHANGE OFFER (PEO)

PROMOTED BY CAIRO COMMUNICATION S.P.A. pursuant to Articles 102 and 106, paragraph 4 of Legislative Decree No 58 of 24 February 1998, as amended

Contents

INTRODUCTION ...... 3 1. Description of the meeting of the RCS Board of Directors of 23 and 24 June 2016 ...... 4 1.1 Attendees of the meeting of the RCS Board of Directors ...... 4 1.2 Specification of vested interests or interests of third parties relating to the PEO ...... 4 1.3 Documentation examined ...... 4 2. Useful data and elements for understanding the PEO ...... 5 3. Assessments of the Board of Directors on the Relaunch Statement, the Supplement to the Offer Document and on appropriateness of the Increased PEO Consideration ...... 6 3.1. Assessments of a business nature ...... 6 3.2. Assessment on the Increased PEO Price ...... 7 3.3. Summary of the Addendum to the Fairness Opinion...... 9 3.4. Summary of Citi’s analyses and considerations ...... 13 3.5. Summary of UniCredit’s analyses and considerations ...... 15 4. Update of the Opinion of the Independent Directors ...... 16 5. Conclusions of the Board of Directors of RCS ...... 17

INTRODUCTION On 17 June 2016, Cairo Communication published a statement, drafted pursuant to Article 44, paragraphs 2 and 3, of the Issuer Regulations and pursuant to Article 114 of the TUF, related to the PEO (the “ Relaunch Statement ”) in which it indicated, among other things, its decision to increase the consideration offered to 0.16 ordinary shares of Cairo Communication for each RCS Share provided to participate in the PEO (the “ Increased PEO Consideration ”). Following Consob’s approval on 22 June 2016, on the same date Cairo Communication published the supplement to the Offer Document pursuant to Article 38, paragraph 5, of the Issuer Regulations (the “Supplement to the Offer Document ”). This statement prepared pursuant to Article 103, paragraphs 3 and 3- bis of the TUF and Article 39, paragraph 4, second sentence, of the Issuer's Regulation, has been approved by RCS Board of Directors on24 June 2016 (the “ Statement of Update ”); such document must be read as a supplement to, and thus, in conjunction with, the the statement prepared pursuant to Article 103, paragraphs 3 and 3- bis of the TUF and Article 39, of the Issuer's Regulation referred to the PEO, approved by RCS Board of Directors on 10 June 2016 (the “ Issuer’s Statement ”), to which reference should be made for any matters not otherwise covered herein, included the capitalized terms defined. For a complete, comprehensive overview of the assumptions, terms and conditions of the PEO, reference should be made exclusively to the Offer Document and Supplement to the Offer Document. Therefore the Statement of Update, as well as the Issuer's Statement, are not intended in any way to replace the Offer Document and Supplement to the Offer Document, and do not, in any way, constitute, nor should they be understood as, a recommendation to subscribe or not subscribe to the PEO and they do not replace each shareholder's judgement with regard to the PEO.

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1. Description of the meeting of the RCS Board of Directors of 23 and 24 June 2016 1.1 Attendees of the meeting of the RCS Board of Directors The following directors attended in person or by conference call the meeting of the RCS Board of Directors started on 23 June 2016 and continued, upon suspension, on 24 June 2016 at which the Statement of Update was approved: the Chief Executive Officer Laura Cioli and the Independent Directors Gerardo Braggiotti(1), Paolo Colonna (2), Teresa Cremisi(1), Dario Frigerio, Thomas Mockridge(2) and Mario Notari. The Chairman of the RCS Board of Directors Maurizio Costa and director Stefano Simontacchi did not participate in the aforementioned RCS Board of Directors meeting for the reasons indicated in Paragraph 1.2 of the Issuer's Statement. Thus, pursuant to Article 12, paragraph 2 of the RCS by-laws, the eldest director present, from time to time chaired the meeting. The Chairman of the Board of statutory auditors Lorenzo Caprio and the statutory auditors Enrico Maria Colombo and Gabriella Chersicla were present for the Board of Statutory Auditors; Gabriella Chersicla (who attended the meeting on 23 June 2016 until the suspension of the same).

1.2 Specification of vested interests or interests of third parties relating to the PEO See the content of Paragraph 1.2 of the Issuer’s Statement for information on vested interests or interests of third parties relating to the PEO, the content of which is fully included by reference herein.

1.3 Documentation examined For the approval of the Statement of Update, the Board of Directors of RCS examined the following documentation in addition to the documents related to the PEO indicated in Paragraph 1.3 of the Issuer's Statement: - the Relaunch Statement; - the Supplement to the Offer Document; - document called “ CAIRO COMMUNICATION Company Overview and 2017-2018 Business Plan ” published by Cairo Communication on 17 June 2016 (the “ Cairo Business Plan 2017- 2018 ”); - notice that an extraordinary shareholders’ meeting of Cairo Communication has been called for 18 July 2016; - the “ Report on the examination of the consolidated pro-forma Balance Sheet, the pro-forma consolidated general Income Statement and the pro-forma consolidated Cash Flow of Cairo Group for the financial year ended on 31 December 2015” prepared by KPMG S.p.A. on 17 June 2016, attached to the Supplement to the Offer Document; - the “ Report of the accounting company on the consolidated provisional data of Cairo Communication Group ” prepared by KPMG S.p.A. on 22 June 2016, attached to the Supplement to the Offer Document; - the addendum to the fairness opinion released on 9 June 2016, provided by Prof. Roberto Tasca on 24 June 2016 (the “ Addendum to the Fairness Opinion ”); - the documentation prepared by Citi and UniCredit for the RCS Board of Directors of 23 and 24 June 2016; - the update of the Opinion of the Independent Directors after the Relaunch Statement and the Supplement of the Offer Document, approved by the Independent Directors on 24 June 2016,

1 Attended the meeting on 24 June 2016, after the suspension of the same. 2 Attended the meeting on 23 June 2016, until the suspension of the same.

pursuant to Article 39-bis of the Issuer Regulations (the “ Update of the Opinion of the Independent Directors ”)

2. Useful data and elements for understanding the PEO As indicated in the Supplement to the Offer Document: (i) on 17 June 2016 in addition to the decision to increase the consideration originally offered in the Offer Document, Cairo Communication’s Board of Directors: - approved (i) the “2017-2018 Business Plan of the Cairo Communication Group” which sets the strategic guidelines for the development of the activities of the Cairo Communication Group on a stand-alone basis for the period 2017-2018 (the “ Cairo Communication Business Plan ”) and (ii) the “2017 -2018 Integration Plan of the Cairo Communication Group Post-Offer ” which sets the strategic guidelines of the Cairo Communication Group Post-Offer for the 2017 – 2018 period (the “ Integration Plan ”), “assuming the completion of the Offer and the consequent inclusion of RCS Group under the scope of consolidation of Cairo Communication ; - convened the extraordinary shareholders’ meeting of Cairo Communication for 18 July 2016 to vote on: (aa) the proposal to increase the share capital of Cairo Communication to service the PEO, to be carried out on one or more occasions for payment in several tranches, for a maximum amount, including the premium, of Euro 366,557,945.80, and, more specifically, for a maximum nominal amount of Euro 5,427,395.553, in addition to a maximum premium equal to Euro 361,130,550.244, to be implemented through the issuing of a maximum number of 104,372,991 Cairo Communication ordinary shares with no indication of the nominal value, with regular dividend entitlement and the same characteristics as the outstanding ordinary shares at the issue date, without rights of pre- emption pursuant to Article 2441, paragraph 4, first sentence of the Italian Civil Code, to be released by 31 December 2016 through contribution in kind of RCS Shares used for participation in the PEO (the “ New Share Capital Increase ”); (bb) the proposal to grant to the board of directors of Cairo Communication, pursuant to Article 2443 of the Italian Civil Code, of the power to increase the share capital of Cairo Communication on one or more occasions for payment, in several tranches, through the issuance of new shares with no pre-emption rights pursuant to Article 2441, paragraph 4, second sentence of the Italian Civil Code, in an amount up to Euro 70 million (including share premium) through the issuance of ordinary shares in a quantity exceeding 10% of the number of shares of Cairo Communication (the “ Share Capital Increase Resolution ”); and (cc) the amendment to the by-laws of Cairo Communication in order to introduce the majority vote pursuant to Article 127-quinquies of the TUF; - resolved that, should the PEO not be prevailing over the PTO, the same Board of Directors will propose, at a subsequent shareholders’ meeting to be called, the distribution of an extraordinary dividend totalling Euro 20 million (Euro 0.256 per Cairo Communication share); - specified that, subject to the positive outcome of the due diligence over RCS Group’s, Cairo Communication intends to complete the RCS relaunch plan with the merger of the latter into Cairo Communication, to be carried out within 12-24 months following the completion of the PEO;

(ii) on 17 June 2016, Mr. Urbano Cairo, U.T. Communications S.p.A. and UT Belgium Holding S.A. – which jointly hold a 72.98% stake in the share capital of Cairo Communication – signed a shareholder agreement concerning the unconditional and irrevocable obligation of the latter, including in the interest of Cairo Communication, to participate in the extraordinary shareholders’ meeting of Cairo Communication called for 18 July 2016 and to vote in favour of the New Share Capital Increase to ensure the approval of the latter.

3. Assessments of the Board of Directors on the Relaunch Statement, the Supplement to the Offer Document and on appropriateness of the Increased PEO Consideration 3.1. Assessments of a business nature A. With reference to the considerations of a business nature set forth in the Supplement to the Offer Document and the contents of the Cairo Communication Business Plan 2017-2018 and the Integration Plan, RCS’ Board of Directors observes as follows: - the Supplement to the Offer Document, the Cairo Communication Business Plan 2017- 2018 and the Integration Plan do not present any new or discontinuous elements with respect to RCS’ future plans, as better described in the RCS Business Plan, the essential terms of which were summarized in Paragraph 3.1 of the Issuer’s Statement, or with respect to what is already set forth in Paragraph G.2 of the Offer Document; - the Cairo Communication Group’s failure to indicate, with the end of the first half of 2016 approaching, economic-financial forecasts related to 2016 data makes it difficult to verify and fully understand the economic-financial forecasts set forth in the Cairo Communication Business Plan, which were higher than the research analyst consensus; - Cairo Communication expects to achieve improvement in performance primarily in the television broadcasting sector, which expectation cuts against the trend observed in previous years as indicated in the following table .

2014 2015

EBITDA Editoria televisiva la7 9,00 1,57

EBITDA Concessionarie di pubblicita 5,23 1,34

EBITDA business TV ante ammortamento diritti TV 14,23 2,91

Ammortamento diritti TV (2,22) (5,66)

EBITDA business TV post ammortamento diritti TV 12,01 (2,75)

Source: 2014 and 2015 Cairo Communication annual financial statement.

In addition, with specific reference to what is indicated in the Supplement to the Offer Document in relation to the envisaged merger of RCS into Cairo Communication over the 12/24 months from the eventual perfection of the PEO, RCS’ Board of Directors observes that Cairo Communication indicated a relatively wide timeframe for the merger with RCS and indicated that the same is subject to «the successful conclusion of the due diligence on the RCS Group» (see p. 74 of the Supplement to the Offer Document); therefore, the envisaged merger would be decided by Cairo Communication at its own discretion, subject to the protections provided by the legal framework governing related party transactions and the needs to obtain the favorable vote in the shareholders meeting of RCS.

B. In relation to the proposed amendment to the by-laws of Cairo Communication aimed at the introduction of majority vote in accordance with art. 127-quinquies of the TUF, which will be submitted to the extraordinary shareholders’ meeting of Cairo Communication called on 18 July 2016, RCS’ Board of Directors reminds the holders of RCS Shares that, according to the information provided in the Offer Document, « if the Extraordinary Shareholders’ Meeting to be held on 18 July 2016 resolves to approve the proposal to introduce the loyalty shares voting rights mechanism in accordance with art. 127-quinquies, of the TUF and the shareholders of Cairo Communication who own significant shareholdings request registration in the special list with respect to all or a portion of their own ordinary shares, upon the expiry of 24 consecutive months of holding the shares, such shareholders would become capable of exercising a number of voting rights in the shareholders’ meeting that is more than proportionate to the share capital owned by the same and they could furthermore strengthen and/or acquire control or a considerable influence over Cairo Communication. Therefore, following the introduction of the loyalty shares voting rights mechanism, it may be more difficult for a third party to acquire or attempt to acquire control over Cairo Communication». Therefore, in the context of the PEO, the inclusion of such instrument would have the effect of offsetting the diluting effects that the controlling shareholders of Cairo Communication would suffer as a result of the perfection of the New Capital Increase, the possible merger with RCS and/or the possible exercise of the Capital Increase Mandate; in addition, the institutional investors and proxy advisors do not see such mechanism with favor.

3.2. Assessment on the Increased PEO Price A. With reference to information set forth in the Supplement to the Offer Document, according to which «also in light of the regulatory context that governs relaunches and changes to the Offer while competitive offers are pending, Cairo Communication’s Board of Directors, at its meeting held on 17 June 2016, resolved to propose to the extraordinary shareholders’ meeting called on 18 July 2016 the Capital Increase, pursuant to which Cairo Communication may issue a maximum of up to 104,372,991 share in exchange for the contribution of RCS Shares, envisaging that, at the time of performance of such Capital Increase, the Board of Directors may determine the number of Cairo Communication shares to issue in exchange for each RCS share tendered to the Offer. The maximum number of Cairo Communication shares deriving from the Capital Increase corresponds to an implicit Exchange ratio of 0.20 Cairo Communication share per RCS Share … in determining the maximum number of Cairo Communication shares forming the subject matter of the Capital Increase and the corresponding implicit exchange ratio, Cairo Communication’s Board of Directors also took into account the estimated value of the better results expected for RCS, set forth in the Integration Plan, with respect to those set forth in RCS’ business plan 2016-2018 presented to the market on 21 December 2015 », RCS’ Board of Directors observes the following: - the implicit exchange ratio of 0.20 Cairo Communication shares for each RCS Share exceeds that envisaged in the Increased PEO Price, equal to 0.16 Cairo Communication shares for each RCS Share; - the statement that the implicit exchange ratio of 0.20 Cairo Communication shares for each RCS Share was determined « also taking into account the estimated value of the better results expected for RCS, set forth in the Integration Plan » is not acceptable the since the average values individuated exclusively on the basis of the RCS Business Plan represent an implicit exchange ratio higher than 0.20, as indicated by the Independent Expert and by the financial advisors of RCS’ Board of Directors; - as of the date of the Statement of Update, the explanatory report drafted by Cairo Communication’s Board of Directors on the proposed New Capital Increase, the valuation of the RCS Shares contributed in kind rendered by Prof. Andrea Amaduzzi on 22 June 2016, and the report by Cairo Communication’s auditing firm on the fairness of

the issue price of the Cairo Communication shares that would be issued to service the New Capital Increase are not yet available; - in any case, the Cairo Communication shares that would be issued to service the New Capital Increase, in the event of full acceptance of the PEO represent, on the basis of the Increased PEO Price, a higher number with respect to the number of shares currently issued by the company and approximately four times Cairo Communication’s current floating capital, making it difficult to forecast the market price of the same shares following the completion of the New Capital Increase; B. RCS’ Board of Directors observes that the supplementary documentation made available by Cairo Communication, new forward-looking information is provided which - while it does not provide the fundamental data necessary for the application of the DCF method to Cairo Communication – has, in the Independent Expert’s opinion, called for further assessments on the fairness of the PEO Consideration to supplement those already carried out in his fairness opinion of 9 June 2016 in the context of which a range of fair values had been proposed based exclusively on criteria deriving from market prices, premiums in previous public tender offers and target prices. Therefore, in the Addendum to the Fairness Opinion, the Independent Expert supplemented such methods by also comparing the fundamental value of RCS, determined on the basis of the DCF method, with an estimate of the fundamental value of Cairo Communication carried out on the basis of the market multiples method and the above- mentioned supplementary forward-looking information. C. With reference to the New Capital Increase, RCS’ Board of Directors observes that the extraordinary shareholders’ meeting of Cairo Communication called to resolve upon the New Capital Increase is called on 18 July 2016, which date falls after the close of the offering period for the PEO and the PTO, as currently expected; therefore, the shareholders would have to subscribe the PEO – immediately losing possession of their respective RCS Shares – in the absence of certainty on whether or not the above-mentioned resolution was passed. Consequently, it must be noted that at present – despite the commitment which, according to information set forth in the Supplement to the Offer Document, appears to have been undertaken by the controlling shareholders of Cairo Communication to vote in favor of the New Capital Increase – there is no certainty whatsoever on whether or not the resolution on the New Capital Increase (essential condition for the issuance of Cairo Communication shares that constitute the Increased PEO Consideration) will actually be passed. In such regard, it should also be noted that, according to information provided in the Supplement to the Offer Document, through resolution no. 19639 dated 21 June 2016, Consob resolved to “ask the Offeror to provide in a timely manner – possibly also through the use of financial instruments already issued, including Cairo Communication shares already issued – a suitable additional guarantee, in accordance with the applicable legal framework in force, aimed at ensuring the full satisfaction of the legal rights of investors who accept the offer, in the event of breach or inexact fulfillment of the commitments and obligations undertaken by the Offeror, also in relation to the possible failure to pass, in a timely manner, a resolution approving the issuance of the financial products offered as consideration ”. As of the date of the Statement of Update, RCS has no information on whether or not such further guarantees have been provided. D. With reference to the decision by Cairo Communication’s Board of Directors to propose, if the PEO turned out not to prevail over the PTO, a subsequent shareholders’ meeting to be specifically called for such purpose, an extraordinary dividend in the total amount of Euro 20 million (Euro 0.256 for each Cairo Communication share), RCS’ Board of Directors notes the peculiarity of this notification in the context of the Relaunch Announcement (which pertains, by definition, to the PEO), since (i) the matter involving this possible extraordinary distribution to Cairo Communication’s shareholders has nothing to do with the context of the competitive offers pending and does not highlight any change or improvement in the contents of the PEO for

the holders of RCS Shares and (ii) it is a proposal directed at the current shareholders (and, possibly, future shareholders) of Cairo Communication and not at RCS’ shareholders. RCS’ Board of Directors points out, furthermore, that in the Supplement to the Offer Document, there are no indications on the possible effects of such announced distribution of an extraordinary dividend on the trend in the price of Cairo Communication shares; the envisaged distribution of the dividend, indeed, could bolster demand for Cairo Communication shares and reduce the offer of such shares on the market, resulting in a support of the market value of Cairo Communication shares and, consequently, an improvement in the exchange ratio implicit in the Increased PEO Consideration. E. Lastly, with reference to the proposal to grant to Cairo Communication’s Board of Directors the Capital Increase Mandate – which, according to what is indicated in the Supplement to the Offer Document has «the purpose of provided to the Board of Directors suitable instruments to allow for the capital of the Cairo Communication Group to be bolstered, also in order to cover the financial requirements that may derive from the acquisition of control over RCS […] the Board of Directors found it advisable to propose to the shareholders’ meeting the grant of such mandate for purposes of having an additional instrument available for procuring possible financing if, also in consideration of the fact that the Offeror has not carried out due diligence activities on the RCS Group, financial requirements were to arise, which are currently unforeseen, in connection with the purchase of the controlling stake in RCS, or in order to take advantage of development opportunities that are not considered under the Integration Plan » – RCS’ Board of Directors observes that the fact that it is not known the price to which Capital Increase Mandate would be exercised, if approved, includes an element of uncertainty on the value of the stake resulting from the PEO.

3.3. Summary of the Addendum to the Fairness Opinion Below is a summary of the Addendum to the Fairness Opinion. The Independent Expert, first of all, proceeded recall the calculations carried out in the fairness opinion rendered on 9 June 2016, made with reference to 7 April 2016 day previous to the announcement of the PEO launch, and exchange ratio derived from measurements made with reference to the weighted average prices, the premiums / discounts for a sample of public tender offers and target prices of analysts, quoted to that date, on the basis of historical price quotas on the Stock Exchange. In particular: A. on the basis of the historical series of weighted average prices (“WAPs”) for the period from 8 April 2015 until 7 April 2016 (identifiable as a “Historical series of weighted market prices for volumes traded pre-announcement”), calculated on the basis of the price quotes on the Stock Exchange, the implicit exchange ratio was determined over time periods of 12 months, 6 months, 3 months and 1 month and 1 day between the RCS ordinary share and the Cairo Communication ordinary share ( 3). For liquidity reasons and contextually of the underlying stock prices, the interval 6 months - 3 months was selected as the reference one for the evaluation; B. the results reached after performing the exercise described in letter A were then compared with a sample of voluntary public tender offers launched from January 2010 through February 2016, on the basis of “pre-announcement” prices. This comparison allowed for the determination of the exchange ratio of the PEO if the median premiums/discounts of the sample of voluntary public tender offers examined had been applied to the results reached through the exercise described in letter A;

3 The time series of official prices have been adjusted to take into account the dividend of Euro 0.20 paid on of 9 May 2016.

C. the analysis of the target prices published by Bloomberg in blind version has been carried out on the basis of the indications provided by the analysts who cover the securities forming the subject matter of PEOs over the period 8 April 2015 – 7 April 2016, determining the exchange ratio implicit in the comparison between minimum and maximum prices of the two shares. The analysis of the WAPs over the period indicated led to the following quantifications: 1 - Rapporti di cambio con PMP Giugno 2015 - Giugno 2016 Periodo PMP RCS PMP Cairo EX Concambio EX

12 mesi 0,67 4,27 0,16 6 mesi 0,61 4,28 0,14 3 mesi 0,66 4,57 0,14 1 mese 0,74 4,59 0,16 1 giorno 0,75 4,11 0,18 The analysis of the WAPs and the subsequent comparison with the public tender offers sample led to the following quantifications: 2 - Rapporti di cambio con premi pre-annuncio Premi mediani prezzi Periodo PMP RCS PMP Cairo Concambio EX pre-annuncio 12 mesi 40% 0,67 4,27 0,22 6 mesi 40% 0,61 4,28 0,20 3 mesi 35% 0,66 4,57 0,19 1 mese 36% 0,74 4,59 0,22 1 giorno 16% 0,75 4,11 0,21 The analysis of the target prices provided by Bloomberg led to the following quantifications: 3 - Rapporti di cambio con consensus analisti Rapporto di cambio Rapporto di cambio Rapporto di cambio Periodo medio ex max ex min ex 12 MESI 0,19 0,25 0,15 6 MESI 0,15 0,15 0,15 3 MESI 0,15 0,15 0,15 1 MESE 0,14 0,15 0,14 1 GIORNO 0,14 0,14 0,14 The Independent Expert also compared the fundamental value of RCS, determined on the basis of the so called “Discounted Cash Flow” (“DCF”) model, with an estimate of the fundamental value for Cairo Communication, conducted on the basis of the market multiples method and the Sales and Ebitda figures announced, by the same, in the Cairo Business Plan 2017-2018. The Independent Expert noted that (i) such a document does not allow a precise application of a DCF model, because it lacks an analytical degree of detail required for the determination of the fundamental value of Cairo Communication and (ii), however, it allows to process an estimation of this fundamental value based on market multiples and on some necessary asset values present in the financial statements dated December 2015 and in the interim Report dated 31 March 2016, in order to compare this value with the fundamental value of RCS determined on the basis of the DCF method. The Independent Expert has then empirically estimated the per share value of the Cairo Communication using the market multiples method. In this regard the Independent Expert indicated that, although this method is often used for control purposes, in this case it constitutes an essential complement to the other methods applied to verify the adequacy of the exchange ratio between the Cairo Communication share and the RCS share, because it

is the only one capable of expressing perspective values to be compared with the DCF results applied to RCS. Since in this case the estimate depends on the selection of the sample and on the correspondence of multiples with concrete market comparisons, upon the assumption, which has been verified, that Cairo Communication operates in the newspaper and book publishing sector (which represents approximately 80% of the company’s EBITDA) and in the television broadcasting sector, the Independent Expert selected two clusters of comparable companies; the first is that used to define the average multiples of RCS as compared to the figures obtained through the DCF, replacing Cairo Communication with RCS, in the fairness opinion issued by the same Independent Expert in the context of the competing public tender offer lunched by IMH. The second arises from the construction of a weighted average multiple between comparable companies in the Publishing and Broadcasting sectors. The Independent Expert defined the weighting criterion on the basis of the composition of Cairo Communication’s EBITDA in the first quarter of 2016 (80% Publishing - 20% Broadcasting). According to the Independent Expert, such weighting is certainly precautionary for the estimate because it ranks as Broadcasting all the activities of Cairo Communication which are complementary with Publishing, but the reasons for the valuation allow such caution. The data provided by Cairo Communication (Sales, EBITDA and capital expenditures), together with the multiples presented, led to the quantification of the estimate of Cairo Communication’s fundamental value. The only adjustment made was that on the methods used for the accounting entry of incremental television rights related to the capital expenditures registered, accounted as a net cost reducing the EBITDA indicated in the Business Plan 2017-2018 Cairo to align the measure to what occurs for the companies that make up the relevant clusters. The Independent Expert noted that for such matter it is important the fact that the signs of EBITDA at the basis of the evaluation are aligned on average to those of consensus. Starting from the enterprise values, adjusting such values for the net financial position (1Q 2016), employee benefits (31 December 2015), deferred tax assets and minorities (both as of 31 December 2015), the Independent Expert arrived at the following values per share of Cairo Communication:

Valus per Cairosh share using EV/Sales 2017 Value of Cairo share using EV/Ebitda 2017

Calcolo del valore Cairo con multiplo Sales 2017 Publish MMP Calcolo del valore Cairo con multiplo Ebitda 2017 Publish MMP EV attualizzato con multiplo Sales 2017 186,80 242,33 EV attualizzato con multiplo Ebitda 2017 174,85 204,87 Posizione finanziaria netta (cassa) 108,59 108,59 Posizione finanziaria netta (cassa) 108,59 108,59 Benefici dipendenti (13,32) (13,32) Benefici dipendenti (13,32) (13,32) Imposte differite attive nette 2015 att. 4,19 4,19 Imposte differite attive nette 2015 att. 4,19 4,19 Minorities (0,06) (0,06) Minorities (0,06) (0,06) Equity Value 286,20 341,73 Equity Value 274,25 304,27 Numero di azioni nette 78,34 78,34 Numero di azioni nette 78,34 78,34 Valore per azione Cairo 3,65 4,36 Valore per azione Cairo 3,50 3,88

Value of Cairo share using EV/Sales 2018 Value of Cairo share using EV/Ebitda 2018

Calcolo del valore Cairo con multiplo Sales 2018 Publish MMP Calcolo del valore Cairo con multiplo Ebitda 2018 Publish MMP EV attualizzato con multiplo Sales 2018 202,29 259,62 EV attualizzato con multiplo Ebitda 2018 225,34 277,95 Posizione finanziaria netta (cassa) 108,59 108,59 Posizione finanziaria netta (cassa) 108,59 108,59 Benefici dipendenti (13,32) (13,32) Benefici dipendenti (13,32) (13,32) Imposte differite attive nette 2015 att. 4,19 4,19 Imposte differite attive nette 2015 att. 4,19 4,19 Minorities (0,06) (0,06) Minorities (0,06) (0,06) Equity Value 301,69 359,01 Equity Value 324,74 377,35 Numero di azioni nette 78,34 78,34 Numero di azioni nette 78,34 78,34 Valore per azione Cairo 3,85 4,58 Valore per azione Cairo 4,15 4,82

On the basis of such results, the Independent Expert identified 4 different exchange ratio ranges, with respect to the value of the RCS share, determined through the DCF and in a range of between Euro 0.80 and 1.13 and with an intermediate value of Euro 0.95:

Exchange ratios fro m Publishing EV/Sales multiples Exchange ratios from Publishing EV/Ebitda multiples

2017 and 2018 2017 and 2018

Concambi con Multipli Publishing Concambi con Multipli Publishing Su Sales ('17 e '18) MIN MEDIO MAX Su EBITDA ('17 e '18) MIN MEDIA MAX Valore per azione Cairo 3,65 3,75 3,85 Valore per azione Cairo 3,50 3,82 4,15 Valore per azione RCS 0,80 0,95 1,13 Valore per azione RCS 0,80 0,95 1,13 Rapporto di cambio 0,22 0,25 0,29 Rapporto di cambio 0,23 0,25 0,27

Exchange ratios from weighted average EV/Sales Exchange ratios from weighted average EV/Ebitda multples 2017 and 2018 multiples 2017 and 2018

Concambi con Multipli Medi Ponderati Concambi con Multipli Medi Ponderati Su Sales ('17 e '18) MIN MEDIO MAX Su EBITDA ('17 e '18) MIN MEDIA MAX Valore per azione Cairo 4,36 4,47 4,58 Valore per azione Cairo 3,88 4,35 4,82 Valore per azione RCS 0,80 0,95 1,13 Valore per azione RCS 0,80 0,95 1,13 Rapporto di cambio 0,18 0,21 0,25 Rapporto di cambio 0,21 0,22 0,23

As further confirmation the quality of the estimation of Cairo Communication’s fundamental value so determined, the Independent Expert highlighted the relationship between (i) the multiples of the two clusters used in the Cairo Communication assessment; (ii) those indicated in the Supplement to the Offer Document and (iii) those implicit in the range of the fundamental values expressed for the RCS share using the DCF method. The Independent Expert has indicated that there is a high degree of correlation between the multiple, which attests to the significance of estimated values for Cairo Communication. EV/EBITDA CONFRONTO MULTIPLI 31-dic-16 31-dic-17 31-dic-18 Media Cluster Publisher 7,73x 6,60x 5,87x 6,73x Suppl. Cairo pag. 66 7,00x 6,60x 6,40x 6,67x Cluster Medio Ponderato 8,08x 6,99x 6,28x 7,12x Multipli impliciti DCF RCS 7,70x 6,46x 5,54x 6,57x Set forth below is a summary of the ranges of fair values determined on the basis of all of the analyses conducted by the Independent Expert.

Concambi con Multipli Ebitda '17-'18 Medi Ponderati 0,21 0,23

Concambi con Multipli Sales '17-'18 Medi Ponderati 0,18 0,25

Concambi con Multipli Ebitda '17-'18 Publishing 0,23 0,27

Concambi con Multipli Sales '17-'18 Publishing 0,22 0,29

CONSENSUS 0,15 0,15

PMP OPA 0,19 0,20

PMP 0,14 0,14

0,12 0,14 0,16 0,18 0,20 0,22 0,24 0,26 0,28 0,30

Riquadro delle medie dei minimi e dei massimi The Independent Expert summarized the final indication by taking a simple arithmetic average of the various ranges determined, as was already done in the previous fairness opinion dated 9 June 2016, in order to maintain an opinion that is free from any elements of subjectivity. The Independent Expert indicated that this led to a fairness range of 0.19 to 0.23, which means that the Increased PEO Consideration must likewise be considered not fair. For additional information, please see the Addendum to the Fairness Opinion of the Independent Expert (Annex “A”).

3.4. Summary of Citi’s analyses and considerations For Citi’s valuation considerations on the exchange ratio, see the fairness opinion issued by the same on 9 June 2016, attached to the Issuer’s Statement. Set forth below, for ease of reference, is the summary table attached to such fairness opinion.

Value per Value per Ordinary Share Ordinary Share Implicit exchange ratio Cairo RCS

Target Prices vs. Cairo vs. Cairo Unaffected Spot Price Target Price Price as of Method Min Max 8 June Min Max Min Max Min Max

DCF:

-Min: average point (SCRP 0.93 1.31 4.70 4.90 5.67 0.197x 0.279x 0.189x 0.231x 2.7%)

-Max: average point (no SCRP)

Target prices of the equity 0.70 0.96 n.m. 4.90 5.67 n.m. n.m. 0.143x 0.169x research analysts

Adjusted historical share

prices

VWAP 1G 0.52 4.41 0.118x

VWAP 1M 0.62 4.34 0.143x

VWAP 3M 0.73 3.97 0.183x

VWAP 6M 0,79 4.10 0.193x

VWAP 12M 1.03 4.43 0.233x

Selected 0.94 1.08 4.70 4.90 5.67 0.200x 0.229x 0.192x 0.190x transactions

Taking into account the new forward-looking information provided by Cairo Communication, Citi carried out a benchmarking analysis between Cairo Communication and selected companies in the publishing sector operating in Southern Europe (RCS, Mondadori, L’Espresso, Vocento), in the broadcasting sector operating in Southern Europe (Mediaset, Mediaset Espana, Atresmedia) and integrated publishing / broadcasting operators (Prisa, Sanoma), using for Cairo Communication the new information set forth in the Cairo Communication Business Plan, for RCS the RCS Business Plan and for the other companies, the research analysts’ consensus. Based upon such analysis, Citi points out that: - Cairo Communication shows average compound annual growth in revenues for 2015-2018 of 8.4%, as compared with a median of 2.2% for publishing in Southern Europe, 5.0% for broadcasting in Southern Europe and 0.2% for integrated operators. Average compound annual growth according to consensus for Cairo Communication is 4.6%

- Cairo Communication shows an average compound annual growth in EBITDA for 2015-2018 of 37.9%, as compared with a median of 11.8% for publishing in Southern Europe, 12.8% for broadcasting in Southern Europe and 8.8% for integrated operators. Average compound annual growth according to consensus for Cairo Communication is 25.2%.

That said, Citi determined, as of 21 June 2016, the Enterprise Value (EV) / EBITDA multiples (post amortizations of television broadcasting rights) for Cairo Communication and for the four groups of comparable companies:

2017E 2018E

Cairo Communication 10.3x 7.1x

Median publishing Southern Europe (inc. 5.0x 4.6x RCS)

Median broadcasting Southern Europe 10.7x 9.3x

Median integrated operators Southern 5.7x 5.5x Europe

RCS 6.5x 5.6x

In light of the foregoing, Citi, in addition to pointing out the substantial difference between the multiples of the broadcasting companies as compared with the publishing companies, also observed

that the contribution on the part of the publishing business to EBITDA post amortizations of television rights of Cairo Communication is virtually totalitarian on historical data for 2015 and, in any case, exceeds 50% according to forecasts for 2018. In particular, Citi observes that:

- on the basis of 2015 figures, Cairo Communication’s EBITDA totals approximately Euro 15 million for the publishing segment and, post amortization of television broadcasting rights, negative in the amount of approximately Euro -3 million for the broadcasting segment;

- for 2018, on the basis of the EBITDA of Euro 46 million pre-amortization of television broadcasting rights announced by Cairo Communication and assumptions discernible from the data for 2015 and from research analysts’ estimates, it is possible to estimate a contribution to EBITDA of approximately Euro 18 million (or approximately 56% of the total, with average compound annual growth with respect to 2015 of 7.7%) for the publishing segment and EBITDA post amortization of television broadcasting rights of approximately Euro 14 million (or approximately 44% of the total).

In consideration of the foregoing, in relation to the data published by Cairo Communication (on p. 66 of the Supplement to the Offer Document), Citi noted a substantial difference between the implicit exchange value indicated by Cairo Communication with respect to what is discernible on the basis of the very same multiples and EBITDA assumptions produced by Cairo Communication, as highlighted in the following table.

In particular, using the most recent data that is publicly available for the determination of the equity value starting from EV (RCS: net debt of Euro 411 million post sale of RCS Libri, third party net shareholders’ equity of Euro 4.7 million adjusted to reflect the net results for the first quarter of 2016, investments in non-consolidated companies of Euro 51 million and severance indemnity (TFR) fund of Euro 40 million; Cairo Communication: net cash position of Euro 93 million adjusted to reflect the dividend paid in May 2016, third party net shareholders’ equity of Euro 0.06 million, investments in non-consolidated companies of Euro 0.05 million and severance indemnity (TFR) fund of Euro 13 million).

Exchange ratio Exchange ratio EV /EBITDA EBITDA CC EBITDA RCS calculated by Citi on calculated by CC CC assumptions 2016E 7.0x 26.2 89.2 0.08x 0.13x

2017E 6.6x 29.7 106.8 0.12x 0.17x

2018E 6.4x 46.0 140.0 0.16x 0.20x

3.5. Summary of UniCredit’s analyses and considerations Following up on what is indicated in the Relaunch Announcement and in the Supplement to the Offer Document, UniCredit makes reference to the valuation considerations expressed in its fairness opinion dated 9 June 2016, which was not revised and/or updated. Set forth below are the results obtained by applying the various methods: - historical series of stock exchange prices: the analysis of the official average prices weighted for volumes of ordinary Cairo Communication shares (net of the dividend paid of Euro 0.2 per share) and RCS for the selected timelines of three, six and twelve calendar months preceding 8

April 2016, led to the identification of an implicit exchange ratio ranging between 0.14 and 0.17 newly issued Cairo Communication shares for each RCS share tendered to the PEO; - premiums in previous public tender offers: the application of average premiums, discerned from the announcement of voluntary public tender offers launched on the Italian market in the last 10 years, to the official weighted average prices of RCS for the selected timelines of three, six and twelve calendar months immediately preceding 8 April 2016, led to the identification of an implicit exchange ratio ranging between 0.18 and 0.22 newly issued Cairo Communication shares for each RCS share tendered to the PEO; - target prices expressed by financial analysts: the analysis of target prices expressed in national and international financial analysts’ research purchased over the period preceding the date of the announcement of the PEO, led to the identification of an implicit exchange ratio ranging between 0.14 – 0.17 newly issued Cairo Communication shares for each RCS share tendered to the PEO; - present value of operating cash flows: the fundamental valuation of RCS using DCF compared with minimum and maximum target prices of the Cairo Communication share expressed in analysts’ research led to the identification of an implicit exchange ratio ranging between 0.18 – 0.22 newly issued Cairo Communication shares for each RCS share tendered to the PEO; - multiples of comparable listed companies: the application of average EV/EBITDA multiples 2017E and 2018E of comparable listed companies to Cairo’s figures of reference (according to the consensus of analysts’ research) and RCS for years 2017E and 2018E, led to the identification of an implicit exchange ratio ranging between 0.20 – 0.25 newly issued Cairo Communication shares for each RCS share tendered to the PEO; - multiples of comparable transactions: the application of the average EV/EBITDA multiple of a sample of transactions specifically selected to the figures of reference of Cairo and RCS, led to the identification of an implicit exchange ratio of 0.23 newly issued Cairo Communication shares for each RCS share tendered to the PEO. Solely for the sake of completeness and on an indicative basis, UniCredit indicated the calculation of the multiples of comparable listed companies as of 22 June 2016, taking into account the economic data indicated by Cairo Communication for 2017 and 2018, would lead to an implicit exchange ratio of approximately 0.19 newly issued Cairo Communication shares for each RCS Share tendered to the PEO.

4. Update of the Opinion of the Independent Directors Bearing in mind that for the reasons explained in Paragraphs 1.2 and 4 of the Issuer’s Statement, the RCS Board of Directors voted to also make the PEO subject to the provisions of Article 39-bis of the Issuer Regulations, before the approval of the Statement of Update, the Independent Directors met on 24 June 2016 and approved the Update of the Opinion of the Independent Directors containing assessments on the PEO and the appropriateness of the Increased PEO Consideration, which conclusions are provided below:

«In light of the foregoing, the Independent Directors, unanimously, a) after examining (i) the contents of the Relaunch Announcement and the Supplement to the Offer Document and the additional documentation related to the PEO and (ii) the Addendum to the Fairness Opinion; b) considering that, as new information on the perspective value of Cairo Business, the Independent Expert supplemented the evaluations on the fairness of the PEO consideration already expressed in its fairness opinion of 9 June 2016;

c) taking into account the conclusions of the Addendum to the Fairness Opinion that (i) the fairness/congruousness range reached by the Independent Expert through a simple arithmetic average of the various ranges determined, is between 0.19 and 0.22 and, consequently (ii) the relaunch of the price offered by Cairo Communication is found to be not fair; d) considering that the Update to the Opinion is rendered pursuant to and for purposes of art. 39-bis of the Issuers Regulation and, therefore for purposes of the issuance by the Issuer’s Board of Directors of the subsequent Update Announcement in accordance with art. 103, paragraphs 3 and 3-bis, of the TUF and art. 39, paragraph 4, second period, of the Issuers Regulation; e) remarked that (i) Consob requested Cairo Communication to give more guaranties aimed at ensuring the full satisfaction of the investors’ rights which should subscribe the PEO, (ii) the envisaged merger is in the sole discretion of Cairo Communication, (iii) the possible introduction of the majority vote would allow the current majority shareholders to strengthen their control over Cairo Communication, (iv) the lack of knowledge of the price to which the Capital Increase Mandate may be exercised , if approved, constitutes a source of uncertainty on the value of shareholdings resulting from the PEO, (v) as a consequence of the high number of shares that would be issued in case of fully subscription of the PEO by the RCS shareholders, it is difficult to envisage the market price of such shares following the completion of the New Share Capital, (vi) the maximum number of shares to be issued on the basis of the New Share Capital considers an implicit exchange ratio equal to 0.20 shares of Cairo Communication for every RCS shares which is higher than the ratio considered in the Increased PEO Consideration, equal to 0.16 Cairo Communication shares for every RCS shares; conclude that the Increased PEO Price, although improved compared to the previous, is not fair for the holders of the RCS shares forming the subject matter of the PEO ». For additional information, please see the Update of the Opinion of the Independent Directors (Annex “B”).

5. Conclusions of the Board of Directors of RCS The Board of Directors of RCS, unanimously,

- taken into account (i) the content of the Relaunch Statement and Supplement to the Offer Document and other documentation related to the PEO; ( ii ) the Addendum to the Fairness Opinion of the Independent Expert; ( iii ) the analysis and the consideration of Citi and UniCredit and ( iv) the Update of the Opinion of the Independent Directors;

- considering that in the Independent Expert opinion, the availability of new perspective information on Cairo Communication imposed to supplement the evaluations on the fairness of the PEO Consideration already stated in his fairness opinion of 9 June 2016;

- considering that from the comparison between the fundamental value of RCS, determined on the basis of the DCF method, and the estimate of the fundamental value of Cairo Communication on the basis of the multiples method the Independent Expert resulted a fairness range between 0.19 and 0.23 that, in the opinion of Prof. Roberto Tasca, « implies that the consideration of 0.16 offered by Cairo in the relaunch cannot be considered fair »;

- underlined that (i) Consob requested Cairo Communication to give additional guaranties aimed at ensuring the full satisfaction of the investors subscribing the PEO and ( ii ) the

possible introduction of the majority vote will allow the majority shareholders of Cairo Communication to strengthen their control over Cairo Communication;

- even if the Increased PEO Consideration is ameliorative of 33.3% for the shareholders of RCS in respect of the PEO Consideration; assess not fair the Increased PEO Consideration for the all RCS shareholders.

In any event, the Board of Directors specifies that the cost-effectiveness of participation in the PEO must be evaluated by the individual shareholder at the time of acceptance, taking into account the entirety of what is outlined above, the performance of the RCS and Cairo Communication shares, the statements of Cairo Communication and the information contained in the Offer Document, the Relaunch Statement and Supplement to the Offer Document.

* * * * *

This Statement of Update, together with its annexes, is published on the Issuer’s website at www.rcsmediagroup.it.

Annexes

A. Addendum to the Fairness Opinion of the Independent Expert of 24 June 2016.

B. Update of the Opinion of the Independent Directors of 24 June 2016.