Board of Directors of PJSC �MegaFon� Approved Recommendations in Respect of the Mandatory Tender Offer for the Purchase of Ordinary Shares of PJSC �MegaFon� Made by �MegaFon Finance� LLC

MOSCOW, RUSSIA -�Media OutReach - 10 January 2019 - Public Joint Stock Company “MegaFon”
(MoEx: MFON), a pan-Russian operator of digital opportunities (“MegaFon” or the
“Company”), announces that on 9 January 2019, the Company’s Board of Directors
(the “Board of Directors”) considered and approved recommendations in respect
of the mandatory tender offer (the “Mandatory Tender Offer”) made by “MegaFon
Finance” LLC (“MegaFon Finance”) to acquire securities (ordinary registered
uncertified shares) of MegaFon, in the amount of 131,212,843 shares of the
Company at a price of RUB 659.26 per one ordinary share (the “Purchase
Price”).

As previously
announced: http://corp.megafon.com/press/news/20181227-1030.html, the Company
received the Mandatory Tender Offer on 27 December 2018, following the
expiration of the period for statutory review of the Mandatory Tender Offer by
the Bank of Russia. MegaFon Finance and its affiliate, LLC AF Telecom Holding,
hold in aggregate 78.84% of the ordinary shares of the Company.  The Mandatory Tender Offer was made for
131,212,843 ordinary shares of the Company held by the remaining shareholders
at the Purchase Price.

The Board of
Directors considers that the Purchase Price is justified and complies with the
requirements of Federal Law No. 208-FZ on Joint Stock Companies dated
26 December 1995, as amended (the “JSC Law”). In particular, in reviewing
the Purchase Price, the Board of Directors considered, among other things, the
fact that the Purchase Price exceeds the average weighted price of one ordinary
share of the Company on Moscow Exchange over a period of six months preceding
the date of filing of the Mandatory Tender Offer with the Bank of Russia which
according to the information provided by Moscow Exchange was RUB 570.50
per one ordinary share; and that, pursuant to the information contained in the
Mandatory Tender Offer document, the Purchase Price corresponds to the maximum
price at which MegaFon Finance or its affiliates acquired or assumed an
obligation to acquire the ordinary shares of the Company during a period of
six months preceding the date of submission of the Mandatory Tender Offer
to the Company.

The performance by
MegaFon Finance of its obligation to pay for the purchased Shares is secured by
a bank guarantee issued by Gazprombank (Joint Stock Company) in respect of the
total amount of the purchase price, and if MegaFon Finance defaults on its
obligation to pay for the shares acquired pursuant to the Mandatory Tender
Offer, the shareholders may demand payment under the bank guarantee.

Based on the
information considered by it, including the information above, the Board of
Directors recommended that the Company’s shareholders accept the Mandatory
Tender Offer.

The Board of
Directors draws the attention to the fact that the market price of the shares
of the Company may be subject to wide fluctuations in response to a number of
circumstances, which are beyond the Company’s control, including in response to
micro- and macro-economic factors, changes in the prices of the Company’s
products and services rendered by the Company, changes in the profitability of
the Company’s business, estimates of analysts, amendments to applicable
legislation, decrease of the number of securities of the Company trading on the
organised securities markets as a result of the acquisition of shares pursuant
to the Mandatory Tender Offer or other events or circumstances.

The Mandatory Tender
Offer will remain open for 70 days from the date of receipt of the Mandatory
Tender Offer by the Company (i.e., from 28 December 2018 to 7 March 2019,
inclusive). The Mandatory Tender Offer, including the recommendations of the
Board of Directors in respect of the Mandatory Tender Offer, will be
communicated to the shareholders of the Company to whom it is addressed,
according to the procedure set forth by the JSC Law and the charter of the
Company for notifying of the general shareholders’ meeting, i.e. by posting it
on the Company’s website at http://megafon.ru on the page used by the Company
for the purposes of disclosure pursuant to the requirements of the Russian
legislation (http://corp.megafon.com/; http://corp.megafon.com/investors/;  http://corp.megafon.com/investors/stock_and_capital/mandatory_tender_offer/).

In accordance with the provisions
of the JSC Law the mandatory tender offer is made to the shareholders — holders
of ordinary shares of the Company. The holders of Global Depositary Receipts
representing the ordinary shares of the Company (“GDRs”) should be able to
participate in the Mandatory Tender Offer following the cancellation of the
GDRs held by them, receipt of the respective number of the underlying ordinary
shares, and submission of the application to sell the securities (ordinary
shares) pursuant to the Mandatory Tender Offer, on the terms and conditions of
the Mandatory Tender Offer and within the applicable deadlines.

Pursuant to the JSC
Law a shareholder has a right, but not an obligation, to accept the Mandatory
Tender Offer. Shareholders should make their own decision as to whether to sell
their shares pursuant to the Mandatory Tender Offer and, if so, how many shares
to sell. Prior to making any decision to sell their shares pursuant to the
Mandatory Tender Offer, the shareholders of MegaFon should carefully read and
consider the terms and conditions of the Mandatory Tender Offer and Articles
84.2 and 84.3 of the JSC Law as well as the Information Letter in Relation to
the Mandatory Tender Offer and the recommended form of an application to sell ordinary
shares of PJSC “MegaFon” available on the MegaFon’s website at http://corp.megafon.com/investors/stock_and_capital/mandatory_tender_offer/. Shareholders of MegaFon are urged to consult with their financial
and tax adviser, and legal counsel if they have any questions in relation to
the Mandatory Tender Offer.

Important Information

This press release is
not for release, publication or distribution, in whole or in part, in, into or
from any jurisdiction where to do so would constitute a violation of the
relevant laws of that jurisdiction.

This press release is
for informational purposes and shall not constitute an offer to purchase or a
solicitation of an offer to purchase with respect to any securities.   Any such offer or solicitation will be made
only by means of the Mandatory Tender Offer document received by the Company.

The final terms of the
Mandatory Tender Offer are contained in the Mandatory Tender Offer document
received by the Company.  Investors and
shareholders in MegaFon are strongly advised to read the Mandatory Tender Offer
document and related materials as soon as they have been published, as these
will contain important information.  In
considering the Mandatory Tender Offer, MegaFon security holders should rely
only on the information contained in the Mandatory Tender Offer document.

This announcement, and
any investment activity to which it relates, is available only to (i) persons
who are outside the United Kingdom, or (ii) investment professionals falling
within Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (the “Order”), (iii) high net worth companies falling
within Article 49(2) (a) to (d) of the Order, or (iv) persons within the scope
of Article 43 of the Order, or (v) any other persons to whom it may otherwise
be lawfully mad under the Order (all such persons together being referred to as
“relevant persons”). Any investment activity to which this announcement relates
will only be available to and will only be engaged with, the relevant persons.
Any person who is not a relevant person should not act or rely on this document
or any of its contents.

MegaFon is a company
organised under the laws of the Russian Federation.  The Mandatory Tender Offer is made solely
pursuant to Russian law. The Mandatory Tender Offer is not made or intended to
be made pursuant to the provisions of any other law. The Mandatory Tender Offer
will be subject to disclosure and procedural requirements of Russia which are
different from those of the United States.

The release,
publication or distribution of this press release and any other documentation
relating to the Mandatory Tender Offer in jurisdictions other than Russia, the
UK or the US may be affected by the laws or regulations of relevant
jurisdictions. Any persons who are subject to the laws and regulations of any
jurisdiction other than Russia, the UK or the US should inform themselves of
and observe any applicable requirements.

Cautionary Statement Regarding Forward
Looking Statements

Some of the information
in this press release may contain or refer to projections or other
forward-looking statements regarding future events or the future financial
performance of the Company.  You can
identify forward looking statements by terms such as “expect”, “believe”,
“anticipate”, “estimate”, “forecast”, “intend”, “will”, “could”, “may”, or
“might”, including the negative form of such verbs or other similar
expressions.  These statements are
predictions, and are based upon various assumptions which are inherently
subject to significant uncertainties and contingencies which are difficult or
impossible to predict and are beyond control of the Company.  These plans or predictions may fail to be
achieved or accomplished.  The Company
does not necessarily intend to update these statements to reflect events and
circumstances occurring after the date of this press release or to reflect the
occurrence of unanticipated events.  Many
factors could cause the actual results to differ materially from those
contained in projections or forward-looking statements of the Company, including,
among others, general economic conditions, the competitive environment, risks
associated with operating in Russia, rapid technological and market change in
the industries in which the Company operates, as well as many other risks
specifically related to the Company and its business and operations.