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Netshoes Announces Receipt of Revised Centauro Offer and that the Netshoes Board Is Unable in the Available Time to Reach a Determination as to the Centauro Offer and Reaffirms Recommendation for a Transaction with Magazine Luiza

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SÃO PAULO–(BUSINESS WIRE)–Netshoes (Cayman) Limited (NYSE: NETS) announces that it has
received at 6:53 p.m. and 11:00 p.m. (São Paulo time) on June 13, 2019
further revised unsolicited proposals from Grupo SBF S.A., a sociedade
anônima
incorporated under the laws of Brazil and with shares listed
in the Brazilian stock exchange (B3) under ticker “CNTO3” (“Centauro”),
for purchase of all of the outstanding common shares of Netshoes through
a merger transaction pursuant to which Netshoes shareholders would
receive a payment in cash of US$4.10 for each share (the “Centauro
Offer”).

As previously announced, on June 13, 2019 Netshoes entered into a second
amendment to the Agreement and Plan of Merger, dated April 29, 2019 and
amended on May 26, 2019, by and among Netshoes, Magazine Luiza S.A.
(“Magalu”) and its subsidiary (as amended from time to time, the “Merger
Agreement”) to increase the Per Share Merger Consideration (as such term
is defined in the Merger Agreement) from US$3.00 to US$3.70, and to
increase the amount of that certain Company Termination Payment (as such
term is defined in the Merger Agreement) from US$1,800,000 to
US$6,000,000.

The Centauro Offer addresses several of the Company’s principal concerns
with its earlier offers, including by providing a R$120 million bridge
loan available upon execution of a merger agreement with Centauro and by
Centauro assuming certain anti-trust risks. There remain, however,
contractual provisions that would require negotiation to assure greater
protection to the Company in view of the longer timeframe that would be
required to execute a transaction with Centauro. Furthermore, while
Centauro has sought to address these concerns through a liquidity
facility, there is continued uncertainty as to the duration of the
anti-trust review process, which creates risk to the Company in view of
its severe liquidity constraints. Had Centauro extended its latest
offers earlier, the Board of Directors of Netshoes (the “Board”) would
have benefitted from time to engage with Centauro to seek to evaluate
the offers and address any remaining concerns.

Due to the receipt of the Centauro Offer on the evening before the
scheduled shareholders’ meeting, the Board has determined, in
consultation with its financial and legal advisors, that, regardless of
the higher price offered by Centauro, as compared to the price to be
paid by Magalu under the Merger Agreement, the Board is unable, in the
insufficient time available, to reach a determination as to whether the
Centauro Offer could reasonably be expected to constitute, result in or
lead to a Superior Proposal (as such term is defined in the Merger
Agreement). Although the Centauro Offer represents a 9.75% increase in
Per Share Merger Consideration, the timing of the Centauro transaction,
including as to shareholder approvals and anti-trust approvals, remains
uncertain. Furthermore, the Merger Agreement contains a “force the vote”
provision that restricts the Company’s ability to adjourn the
shareholders’ meeting without Magalu’s consent. Magalu has advised the
Company’s representatives that it will not agree to a second adjournment
of the shareholders’ meeting.

In light of the aforementioned, the Netshoes Board advises its
shareholders to consider the information available in casting its vote
and unanimously reaffirms (with the abstention of Mr. Marcio Kumruian on
advice of counsel) in accordance with the Merger Agreement, its
recommendation in favor of the Magalu transaction.

Contacts

Otavio Lyra, Investor Relations Officer
São Paulo, Brazil
Phone:
+55 11 3028-3528
Email: ir@netshoes.com
http://investor.netshoes.com

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