BREAKING NEWS – 03.06.2024

In a press release dated May 29th, 2024, Convergenze SpA – a Benefit Company active in the 100% green Telecommunications and Energy sectors, operating nationwide through its patented EVO (Electric Vehicle Only) network and proprietary fiber-optic network with innovative XGS-PON technology and listed on the Euronext Growth Milan market – together with the administrative body of its subsidiary Positivo Srl, approved the plan to merge Positivo into Convergenze. In addition, the Board of Directors of the latter also announced the approval of the 2023 Sustainability Report. Positivo, a 100.0% subsidiary of Convergenze, is an active player in the telecommunications sector, with a wired infrastructure offering a wide range of technological solutions for Internet connections, which has enabled the Company to establish itself as one of the first operators to cover the northern area of the province of Salerno, complementary to Convergenze’s coverage. The company aims to provide high value-added services to meet customer demands, while maintaining a constant focus on technological evolution, both radio and wired. The merger by incorporation will optimize the management of resources and economic and financial flows resulting from the activities currently fragmented between the two companies, concentrating in Convergenze the activities previously carried out independently by Positivo. In addition to these operational purposes, significant synergies are expected from the elimination of corporate and administrative duplication and overlap, resulting in overhead cost savings. As of the current date and with the completion of the merger transaction, the share capital of Positivo is fully held by Convergenze. Therefore, no shares will be allotted in exchange for the stake held in Positivo, which will therefore be cancelled. There will be no increase in Convergenze’s share capital for the exchange, nor will there be any change in the number and characteristics of the outstanding shares, nor will any cash adjustment be awarded. Upon completion of the merger by incorporation, Convergenze will assume in its assets the assets and liabilities of Positivo. The transaction will take place at book values and any merger differences will be treated in accordance with the relevant accounting standards. The merger by incorporation will be carried out by making use of the “simplified procedure” provided for in Article 2505, c. 1, C. c. Therefore, it will not be necessary to prepare the reports of the administrative bodies of the companies participating in the merger nor will it be mandatory to acquire the experts’ report on the fairness of the exchange ratio. In accordance with Article 2501-quater, the merger plan was prepared on the basis of the financial statements as of December 31st, 2023. Convergenze’s Bylaws of the merging company will not change as a result of the merger since Convergenze’s corporate purpose already includes the business area of Positivo. Decisions on the merger will be made by Convergenze’s Board of Directors, as provided for in the Articles of Incorporation, except for the possibility for shareholders representing at least 5.0 percent of the share capital to request, within 8 days of the filing of the Merger Project with the Companies Registry, that such a decision be made at the shareholders’ meeting. For Positive, the decision will be made by the Extraordinary Shareholders’ Meeting.  The legal effects of the merger will take effect on the date on which the last of the registrations with the Registry of Companies of the deed of merger is executed, or on any later date established in the deed of merger. The accounting and tax effects, on the other hand, will run from the first day of the fiscal year in which the merger is completed, and from that date the accounting operations of Positivo will be charged to Convergenze’s financial statements. There are no specific treatments for certain categories of shareholders or special benefits for the directors of the merging companies. Pursuant to the Procedure for Related Party Transactions, approved by Convergenze’s Board of Directors, the two companies are found to be related parties. However, the provisions concerning the investigation, evaluation and approval of related party transactions do not apply to transactions between subsidiaries where there is no significant interest of other related parties. Therefore, Convergenze will not be required to publish the disclosure document regarding the merger transaction, except for disclosure requirements as an issuer of securities listed on Euronext Growth Milan.  It is also announced that the Company’s Board of Directors today approved the Sustainability Report for the year 2023. The Sustainability Report 2023 was prepared following a selection of the GRI Sustainability Reporting Standards, published by the Global Reporting Initiative (GRI), considered the most widely used and internationally recognized standard for reporting non-financial information. The reporting scope of data and information, both quantitative and qualitative, refers to Convergenze’s performance for the year 2023. To enable temporal comparison of data and evaluation of the Company’s business performance, comparative data for the previous two fiscal years, 2021 and 2022, have been included. Please note that the Sustainability Report 2023 has been prepared on a voluntary basis and is not subject to audit. The positive evolution of the merger project, together with the focus on sustainability demonstrated by Convergenze, confirms the progress towards the realization of the objectives of its sivluppo plan, further reinforcing our positive view on the stock. Taking into consideration what is reported in the release, we confirm our estimates: target price € 4.25 BUY rating and risk Medium.

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