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Société de la Tour Eiffel : Board's reasoned opinion

Board's reasoned opinion

Société de la Tour Eiffel's Board (Paris: EIFF), convened on 18 April 2014,
having taken note of the improved offer initiated by SMABTP and filed with
the AMF (French stock market authority) on 16 April 2014, has issued the
following reasoned opinion.

societe de la tour eiffel's board reasoned opinion

A Board meeting of Société de la Tour Eiffel was held on 18 April 2014 at its
Registered Office under the chairmanship of Mr. Mark Inch, in order to
consider the revised draft offer (the "Improved Offer
") that the SMABTP (the "Offeror
") has filed in connection with its initial public offer for the shares of
Société de la Tour Eiffel (the "Offer
") by the Autorité des Marchés Financiers (French stock market regulator, "AMF

The reasoned opinion which follows was issued by all the directors on the
Board, namely Mr. Mark Inch, Mr. Renaud Haberkorn, Mr. Robert G. Waterland,
Mr. Frédéric Maman, Ms. Mercedes Erra, Mr. Aimery Langlois-Meurinne, Mr.
Richard Nottage and Mr. Philippe Prouillac.

The Board thus formed took note of the following documents:

* Notice of filing of the Offer published by AMF on 29 January 2014 (Notice
of Filing No. 214C0170);
* The draft offer document filed with AMF on 29 January 2014 setting out the
reasons for the Offer, the Offeror's objectives, as well as the
characteristics and elements used to evaluate the price of the Offer;
* The revised offer document filed with AMF on 4 February 2014 (the
"Prospectus "):
* The "other information" document the Offeror filed with the AMF on 4 March
* The conformity ruling published by AMF on 4 March 2014 (notice of filing No
214C0339) ;
* The memo in reply from the Company approved by AMF on 19 March 2014
(Approval No. 14-089);
* The "other information" document the Company filed with AMF on 19 March
* The timetable for the Offer published by AMF on 11 April 2014 setting 23
May 2014 as the closing date for the Offer (Notice of Filing No. 214C0555);

* Notice of filing of the draft Improved Offer for the shares of the Company
published by AMF on 16 April 2014 (Notice of Filing No. 214C0580);
* The draft supplemental document to the prospectus of the Offeror filed with
AMF on 16 April 2014, which contains the terms and characteristics of the
Improved Offer (the "Supplemental Document");
* The analysis and valuation work of Rothschild&Cie, financial adviser of the

In order to give its opinion on the Offer, the Board was assisted in its
analysis by the financial and legal advisors of the Company, respectively
Rothschild&Cie and Weil Gotshal&Manges. To this end, Board meetings were held
on 30 January 2014, on 12 and 20 February 2014, and on 18 April 2014.

In accordance with Article 231-19 of the General Regulation of AMF, the Board
has been asked to review and assess the benefits of the Offer and its
consequences thereof for the Company, its shareholders and employees.

Background to the Improved Offer

The Board of Directors of the Company recalls that, in the reasoned opinion
issued on 20 February 2014, its members unanimously considered that the
initial Offer was in the best interests of the Company and its employees, but
felt that the price of 48.0 euros per share proposed by the Offeror did not
sufficiently reflect the intrinsic value of the Company.

Against this background, the Board had decided on 20 February 2014 not to
tender to the initial Offer the 72,594 treasury shares. All the members of
the Board had also indicated their intention to tender 51% of their shares to
the initial Offer.

The Board also recalled that the initial public offering, which was declared
compliant by the AMF in its ruling dated 4 March 2014, has been open since 7
March 2014, pursuant to the notice of opening the Offer published by the AMF
on 6 March 2014.

Reasoned opinion of the Board on the Improved Offer

In view of the Supplemental Document filed by the Offeror with the AMF on 16
April 2014, the Board found that:

* The Offeror has raised the price offered per share of the Company from
€48.0 to €53.0, an increase of over 10 % compared with the initial offer;
* The Offeror has lowered the threshold of success from 51% to 40% of the
share capital and voting rights of the Company on a fully diluted basis;
and that
* The Offeror has undertaken to pay a portion of the brokerage fee under the
conditions laid down in paragraph 2.14 of the Supplemental Document.

The Board also noted that the nature of the Improved Offer remains unchanged
and in particular that:

* The Improved Offer is a voluntary tender offer, following a standard
procedure, relating to all of the shares of the Company (including the
treasury shares), pursuant to which the Offeror irrevocably offers to the
Company's shareholders to purchase their shares;

* If the Improved Offer is successful, it will be automatically reopened
within 10 trading days following the publication of the result of the
Offer, for a minimum period of 10 trading days; and that
* On the date of filing the Supplemental Document, the Offeror held no shares
in the Company.

The Board of Directors confirmed that, as stated in paragraph 1.1 of the Note
in Reply that it will not exercise during this Improved Offer the 600,000
subscription share warrants, exercisable at the Company's discretion, issued
on 21 February 2013 with regard to a multiannual contingent equity line.

The Board noted the following items resulting from the intentions and
objectives stated by the Offeror in the Supplemental Document:

Appeal against the conformity ruling of the Offer

It is reminded that on 13 March 2014, several shareholders holding and acting
together close to 29.5% of the capital and the voting rights of the Company
filed with the Paris Court of Appeal an appeal demanding cancellation of the
conformity ruling rendered by AMF (the « Appeal

The same claimants filed with the First President of the Paris Court of Appeal
a request asking for a stay of execution of the conformity ruling until
delivery of the judgement of the Court of Appeal, called to rule on the
merits of the motion. By ordinance rendered on 10 April 2014, the First
President of the Paris Court of Appeal rejected the stay of execution

In this respect, the Board of Directors took notice of the following items
noted by the Offeror in the Supplemental Document:

"Société de la Tour Eiffel's shareholders' attention is also drawn to the fact
that a ruling of annulment of the Conformity Ruling, should it be rendered by
the Court of Appeal, would result in the Offer and the Improved Offer being
considered as null and void, and consequently, the Shares contribution
transactions would be cancelled."

In this case, the aforementioned ordinance dated 10 April 2014 stated that the
financial risk, and in particular the risk of immobilising the Shares
contributed to the Offer during the proceedings at the Paris Court of Appeal,
will be borne by SMABTP.

Furthermore, as stated by the aforementioned ordinance, "the restitution of
shares and price which the requested annulment would entail would be made
easier by the centralisation of the orders provided for by articles 232-1 et
seq. of the general rules of AMF, resulting in particular from recording the
contribution offers resulting from it, which enables keeping a nominative
track of the shareholders having contributed to the offer ".

As a consequence, in case of nullity, SMABTP will return the Shares to the
former shareholders of Société de la Tour Eiffel who would so wish against
reimbursement of the received price with a delay and according to terms which
will be determined under the supervision of AMF pursuant to the judgment of
the Paris Court of Appeal."

On the Company's strategy, business and commercial policy.

The Board of Directors noted that the objectives of the Offeror regarding, in
particular, the proactive strategies of growth and of balance sheet
stabilising, which were noted by the Board of Directors in the initial Offer,
have not been amended by the Improved Offer.

* Reinforcement of the Company's equity

The Supplemental Document specifies the Offeror's wish to reinforce the
Company's equity through capital increase according to the following terms:

"SMABTP will take all necessary measures to maintain appropriate financing
means for Société de la Tour Eiffel in particular through participating to
the reinforcement of its equity to reduce the Loan To Value (LTV) ratio to a
level of approximately 30/35% and to finance an investment strategy.

In this respect, SMABTP indicates that it is prepared to subscribe for an
amount ranging from 80 to 100 million euros to any capital increase with
preferred subscription right that would be proposed by the Board of Directors
of Société de la Tour Eiffel after closing of the Improved Offer."

* SIIC status of the Company Statut SIIC de la Société

The Board recalls that in its reasoned opinion on the initial Offer, it felt
it was important, especially for those shareholders who wish to remain in the
capital of the Company, that the Offeror clarify its intentions with respect
to upholding Company's SIIC status.

In this regard, the Board noted that the Offeror states in the Supplemental
Document that, given the existence of the Appeal, it needs to block all the
shares it receives in connection with the Improved Offer in order to be able
to return them should the Offer be cancelled. Accordingly, the Offeror
considers that the reclassification of its shareholding exceeding the 60%
threshold of the Company's capital would no longer be legally feasible. .
Consequently, the Board notes that if the Offeror were to obtain a
shareholding exceeding the 60% threshold referred to above, the Company would
lose the benefit of its SIIC status retroactively from 1 January 2014 and
that the Company would have to accept all its consequences, particularly
concerning the dividend distribution policy.

On the implications for the employees and the management of the Company

The Board noted that the intentions of the Offeror concerning the safeguarding
of employees and management of the Company remain unchanged in relation to
the initial Offer and that, consequently, the Improved Offer is in line with
the continuation of the Company's activity and development and should not
have any particular impact on the Company's policy regarding employment or
the management of labour relations and human resources.

The Board also noted that the Offeror does not wish to provide a liquidity
facility for the holders of free shares or stock options who are unable to

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