The Opinions of the Independent Financial Advisor on the Acquisition
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The opinions of IFA on the acquisition of asset and the connected transaction (For the purpose of translation only) Enclosure 9 The opinions of the Independent Financial Advisor on the acquisition of asset and the connected transaction regarding the additional investment in The One Enterprise Co., Ltd. by GMM Grammy Public Company Limited Presented to Shareholders of GMM Grammy Public Company Limited Prepared by Jaydee Partners Limited 27 April 2017 This English report of the Independent Financial Advisor’s Opinions has been prepared solely for the convenience of foreign shareholders of GMM Grammy Public Company Limited and should not be relied upon as the definitive and official document. The Thai language version of the Independent Financial Advisor’s Opinion is the definitive and official document and shall prevail in all aspects in the event of any inconsistency with this English Translation. 0 The opinions of IFA on the acquisition of asset and the connected transaction (For the purpose of translation only) Content Page Executive Summary 5 Section 1 The additional investment in The One Enterprise Co., Ltd. 1.1 Characteristics and Details of the Transaction 9 1.2 Reasonableness of the Transaction 16 1.3 Fairness of the Transaction Price and Condition 20 Section 2 Summary of the Opinions by the Independent Financial Advisor 33 Enclosure 1 General Information of GMM Grammy Public Company Limited 35 Enclosure 2 General Information of The One Enterprise Co., Ltd. 50 1 The opinions of IFA on the acquisition of asset and the connected transaction (For the purpose of translation only) Glossary The Company or GRAMMY GMM Grammy Public Company Limited The Group GMM Grammy Public Company Limited and its subsidiaries The One Enterprise The One Enterprise Co., Ltd. (formerly known as GMM ONE TV TRADING Co., Ltd.) GMM ONE TV GMM ONE TV Co., Ltd. (formerly known as GMM HD DIGITAL TV Co., Ltd.) Group of The One Enterprise The One Enterprise Co., Ltd. and its subsidiaries ACTS STUDIO ACTS STUDIO COMPANY LIMITED Exact Scenario Exact Scenario Co., Ltd Me Mi Ti Me Mi Ti Co., Ltd Mr.Takonkiet Mr. Takonkiet Viravan Group of Mr.Takonkiet Mr. Takonkiet Viravan Scenario Co., Ltd and Wan Tam Dee Co., Ltd Scenario Scenario Co., Ltd Wan Tam Dee Wan Tam Dee Co., Ltd Prananporn Prananporn Co., Ltd. Licenses The licenses to use allocated frequencies for national commercial digital television services License in Variety HD The licenses to use allocated frequencies for national commercial digital television services in Variety Category (High Definition) License in Variety SD The licenses to use allocated frequencies for national commercial digital television services in Variety Category (Standard Definition) NBTC The National Broadcasting and Telecommunication Commission Independent Financial Jaydee Partners Limited Advisor or IFA SET The Stock Exchange of Thailand SEC The Securities and Exchange Commission Notification of the Notification of Capital Market Supervisory Board TorChor. 20/2551 Re: Rules Acquisition or Disposition on Entering into Material Transactions Deemed as Acquisition or Disposal of Assets and Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Asset, 2004 (as amended). Notifications on Connected The Notification of Capital Supervisory Board, Tor. Chor. 21/2008 Re: Rules Transactions on Connected Transactions dated August 31, 2008 and its amendments, as well as the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and the Acts of Listed Companies concerning Connected Transaction B.E. 2546 (2003) dated November 19, 2003 and its amendments 2 The opinions of IFA on the acquisition of asset and the connected transaction (For the purpose of translation only) 27 April 2017 To: The Shareholders GMM Grammy Public Company Limited Re: Independent Financial Advisor Report on the acquisition of asset and the Connected Transaction With reference to the resolution of the Board of Directors of GMM Grammy Public Company Limited (“the Company” or “GRAMMY”) No.4/2017 dated 17 April 2017, the Board of Directors has approved the entering into of the connected transaction on the Company’s acquisition of 2,200,000 shares of The One Enterprise Co., Ltd. (“The One Enterprise”), at the par value of THB 100 per share, or equivalent to 5.77%of the total issued shares of The One Enterprise, from Scenario Co., Ltd. (“Scenario”), at the price of THB 100 per share, totaling THB 220,000,000, after the completion of The One Enterprise’s capital increase on 31 May 2017. The entering into of such transaction constitutes an asset acquisition transaction of the Company pursuant to the Notification of the Board of Governors of the Stock Exchange of Thailand (“the SET”) Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Assets, 2004, and the Notification of the Capital Market Supervisory Board No. TorChor. 20/2551 Re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposal of Assets (collectively, the “Notification of the Acquisition or Disposition”). After the calculation, the transaction value is equivalent to 3.04% calculated based on the Total Value of Consideration Basis which is the basis that yields the highest value from the Consolidated Financial Statements of the Company for the year ending 31 December 2016 which were audited by a certified public accountant. In this regard, as the transaction value is lower than 15%, pursuant to the Notification of the Acquisition or Disposition, the Company is not obliged to disclose the information on the acquisition with the SET. The entering into of such transaction, however, constitutes a connected transaction of the Company pursuant to the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Connected Transactions, 2003, and the Notification of the Capital Market Supervisory Board No. TorChor. 21/2551 Re: Rules on Connected Transactions (collectively, the “Notifications on Connected Transactions”) as the Company and Scenario are related to each other in the following manner: (1) Mr. Takonkiet Viravan is the Chief Executive Officer – GMM One Digital TV who is an executive of the Company as defined in the Notifications on Connected Transaction, i.e., a person holding the one of the first four management positions following the highest rank, as well as a major shareholder (52.50%), director, and the Managing Director of Scenario. (2) Miss Boosaba Daorueng is a shareholder and the Group Chief Executive Officer of the Company, and a director of Scenario. Such connected transaction represents the value of 28.95% of the net tangible asset (NTA) from the Consolidated Financial Statements of the Company for the year ending 31 December 2016 which were audited by a certified public accountant. Due to the transaction value of more than or equivalent to THB 20.00 million or more than or equivalent to 3.00% of the net tangible asset (NTA) of the Company (whichever is higher), the Company has the duty to obtain approval from its Board of Directors, disclose an information memorandum to the SET, and seek for the approval on the entering into of the transaction from the shareholders meeting, including appoint an independent financial advisor to provide opinions thereon, whereby the approval of the shareholders meeting shall be passed by votes of no less than three-quarters of the total votes cast by the shareholders attending the meeting and eligible to vote, without counting the votes cast by the interested shareholders. According to the Board of Directors Meeting No.4/2017 dated April 17, 2017, the Board of Directors has approved the appointment of JayDee Partners Limited (“independent financial advisor” or “the IFA”), as financial advisor approved by the Office of the Securities and Exchange Commission (“the SEC”) and JayDee 3 The opinions of IFA on the acquisition of asset and the connected transaction (For the purpose of translation only) Partners Limited does not have any relationship with the Company, and is authorized to be an independent financial advisor of the Company to provide an opinion to shareholders as supporting information for their voting consideration with respect to this transaction of the Company. This IFA report was prepared based on the information gathered from interviews with the Company’s management, documents provided by the Company, publicly available information as well as the IFA’s assessment of current economic conditions. Any significant changes to this information in the future may alter the IFA’s opinion on the transaction accordingly. Information and documents used in preparing this report included but are not limited to the following: o The resolutions of the Company’s Board of Director’s Meetings and Information Memorandum relating to the transaction o Information of the transaction which is disclosed through the information service system of the SET and/or website and/or public o Information disclosure (Form 56-1) as of FY 2016 of the Company o The Company’s audited consolidated financial statements for the year ended 31 December 2014 - 2016 o The One Enterprise’s audited consolidated financial statements for the year ended 31 December 2014 – 2016 o Summary of contracts relating to the transaction o Summary of the key conditions under