Krasnodar, Russia (05 October, 2018): Magnit PJSC (MOEX and LSE: MGNT), one of Russia’s leading retailers announces the results of the Board of Directors meeting held on October 04, 2018.

Please be informed that on October 04, 2018 the BOD meeting was held (minutes of the BOD meeting of PJSC “Magnit” are w/o No. of October 05, 2018).

The meeting agenda:

Consideration of the issues in relation to the development of Magnit Cosmetic and Pharmacy business lines.
Approval of amendments to the PJSC “Magnit” share buy-back programme.

7 (seven) of the 7 (seven) BOD members participating in the BOD meeting were present. Quorum to hold the BOD meeting with this agenda is present.

Voting Results:

Item 1

Mowat Gregor William — “for”, Demchenko Timothy — “abstained”, Simmons James Pat — “for”, Makhnev Alexey Petrovich — “abstained”, Foley Paul Michael — “for”, Prysyazhnyuk Alexander Mikhailovich — “against”, Ryan Charles Emmitt — “for”.

Item 2

Mowat Gregor William — “for”, Demchenko Timothy — “abstained”, Simmons James Pat — “for”, Makhnev Alexey Petrovich — “abstained”, Foley Paul Michael — “for”, Prysyazhnyuk Alexander Mikhailovich — “against”, Ryan Charles Emmitt — “for”.

The decisions were made.

Content of the decisions:

Item 1 on the agenda:

"Further to the discussions held at previous Board meetings, the management provided an update to the Board in relation to the strategy of development of Magnit Cosmetics and Pharmacy business lines with respect to the warehouse and logistics infrastructure and confirmed its intention to pursue such strategy. In the management’s view provided to the Board, the acquisition of SIA Group (in the form of acquisition of shares/participation interests in the relevant SIA Group companies) is the most optimal option for pursuing this strategy based on the analysis of the acquisition and other potential options for the development of such strategy (including organic development and other alternatives) prepared by the management. Bank of America Merrill Lynch has been engaged to opine to the Board as to the fairness or otherwise of the contemplated transaction from a financial point of view.

J.P. Morgan provided financial advice to PJSC “Magnit” in connection with the proposed acquisition, including analysis of certain strategic considerations with respect to the transaction, including financial aspects of developing logistic infrastructure and other potential acquisition targets. The management also conducted due diligence of the target under the proposed acquisition (including legal, financial, business and tax due diligence) using internal and reputable international external advisers. The management provided to the Board the following key terms of the proposed acquisition:

consideration for the acquisition target of up to RUB 5,700,000,000 (Five billion seven hundred million) to be paid in the form of ordinary shares of PJSC “Magnit”;
obligation on the seller under the proposed acquisition not to sell any shares in PJSC “Magnit” received as consideration under the acquisition for the period of at least 3 years following completion of the acquisition; and
the seller’s liability/indemnity for liabilities of, and key legal risks in relation to, the acquired target.

The Board received the management’s update outlined above and supports the strategy of PJSC “Magnit” to develop Magnit Cosmetic and Pharmacy business lines by initiating implementation of such strategy through the proposed acquisition of SIA Group".

Item 2 on the agenda:

" To approve the following amendment to the PJSC “Magnit” share buy-back programme, previously approved by PJSC “Magnit” Board on 21.08.2018 (hereinafter referred to as The Share Buy-back programme):

To increase the total amount of funds allocated for the acquisition of shares under the Share Buy-back Programme by 5,700,000,000 (Five billion seven hundred million) rubles to 22,200,000,000 (Twenty two billion two hundred million) rubles with the allocation of such amount for the following goals as follows:

up to 16,500,000,000 (Sixteen billion five hundred million) rubles to be allocated for the implementation of the Long-Term incentive Programme of PJSC “Magnit” Group of Companies pursuant to key terms of such program, approved by the PJSC “Magnit” Board of Directors on 25th of July 2018 (Minutes of the PJSC “Magnit” Board of Directors, dated 26th of July 2018) as approved by the Board on 21.08.2018; and
up to 5,700,000,000 (Five billion seven hundred million) rubles to be allocated to the payment under the transaction related to the proposed acquisition of SIA Group in an amount up to the proposed purchase price under such proposed acquisition subject to the terms thereof outlined by the management to the Board as set forth above.

To leave unchanged the Share Buy-back programme in all other respects.

The effective instruction under the existing contract with the stock broker engaged to execute the share purchase transactions pursuant to the Share Buy-back Programme shall remain unchanged. Upon completion of the performance by such broker under such instruction, a new instruction shall be issued to such broker to carry out the share purchase transactions pursuant to the Share Buy-back Programme as amended hereby, subject to the compliance with applicable regulatory requirements, including those related to the use of inside information".

Magnit announces the results of the Board of Directors meeting