QVT Financial Sends Letter to Galatasaray Sportif Demanding it Adhere to CMB Directives

— CMB Directs Sportif to Disclose Plan for Repayment of Outstanding Loans and to Rectify Proposed Improper Use of Assets in Financing Tender Offer —
ISTANBUL and LONDON and NEW YORK, March 23 LawFuel.com — QVT Financial LP (“QVT”) today commented on the response issued by the Capital Markets Board of Turkey (“CMB”) in relation to QVT’s petition to halt the coercive tender offer for shares of Galatasaray Sportif Sinai ve Ticari Yatirimlar A.S. (“Sportif”) by its majority shareholder, Galatasaray Spor ve Futbol Isletmeciligi Ticaret A.S. (“Futbol”). QVT Fund LP, QVT’s flagship fund, is the largest minority shareholder in Sportif, currently holding approximately 17.7 percent of the public stock.

In its response dated March 22, 2010, the CMB ordered Sportif to disclose the steps it has taken and will take to collect the more than TRY 343 million in outstanding related-company loans extended by Sportif to Futbol and other related parties. The CMB, in a previous decision on this matter, has ordered these loans to be repaid by March 28, 2010, only five days from today.

The CMB also notified Sportif that it must act in full compliance with its Articles of Association in the financing of the tender offer; it did not, however, suspend the tender offer. Aslaid out in Sportif’s disclosures on March 12, 2010, and in contravention of Sportif’s Articles of Association, certain assets of Sportif would be used improperly as collateral for the US$70 million loan obtained by Futbol to finance its tender offer. Thus, in light of the CMB’s determination, it is unclear if the financing remains available for the proposed tender offer.

QVT has sent a letter to Sportif demanding that Sportif make a full and fair disclosure of how it intends to comply with CMB’s decision, both in relation to the outstanding loans and to the proposed improper use of assets.

Dan Gold, Chief Executive Officer of QVT commented, “We are gratified that the CMB has taken steps to address two egregious elements of the tender offer by ordering Sportif to disclose how it will secure full repayment of its loans to Futbol and other related parties and to ensure that the tender offer not be funded by the Company’s assets. While we are disappointed that the CMB did not formally suspend the tender offer, it is clear that its directives must be fully and fairly addressed before the tender offer or any proposed merger can be finally consummated by the Sportif. Accordingly, we have urged that the tender offer be suspended pending the Sportif’s response to the CMB’s order.”

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