euro adhoc: Financing, Stock Offerings (IPO) / Zapf Creation: BaFin exempts MGA Entertainment, Inc. and Ron Brawer from submitting a mandatory offer (E)

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Disclosure announcement transmitted by euro adhoc. The issuer is responsible
for the content of this announcement.
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18.09.2007

Rödental, September 18, 2007 - Zapf Creation AG today announced that it has been
notified that the German Federal Financial Supervisory Authority (BaFin) has
exempted MGA Entertainment, Inc. and Mr. Ron Brawer from submitting a mandatory
offer under Section 37 of the German Securities Acquisition and Takeover Act
(WpÜG) in conjunction with Section 9 of the Offer Regulations in case they gain
control of the Company. Submitting such an offer would have been mandatory if a
shareholder holds at least 30% of a company's voting shares. An exemption was
also requested for the shareholders of MGA Entertainment, Inc. who are
shareholders of Zapf Creation AG and who act together with MGA Entertainment,
Inc. and Ron Brawer. A positive decision regarding these applications is
expected in the next weeks. The exemption may be revoked if certain
restructuring goals are not reached or reached in time. Details regarding this
will be published in an official stock exchange gazette and an electronic
distribution system.

The decision made by BaFin also makes it possible to implement the financing
concept for the Zapf Creation Group that was agreed with a banking syndicate on
July 20, 2007. This concept calls for the infusion of equity totaling EUR 30
million as a key requirement for granting a new syndicated loan. Such infusion
of equity has been guaranteed by major shareholders. The exemption became
necessary after MGA Entertainment, Inc. had agreed to take over that part of the
financing package to which Betham Ltd., whose chief executive officer Gustavo
Perez is a member of Zapf Creation's Supervisory Board, had originally committed
itself. This commitment of MGA Entertainment, Inc. is subject to the conditions
that the banks give their consent to an extension of the current loans until
November 30, 2007 and that the agreements with the new lenders will be adjusted
accordingly. The assumption of this additional obligation became necessary
because Betham Ltd. was unable to fulfill its obligations due to legal
restrictions.

Based on this new situation, it is possible — as soon as the shareholders of MGA
Entertainment, Inc. have also been exempted — for MGA Entertainment, Inc. or its
shareholders and Ron Brawer to exceed the voting rights threshold of 30% in
accordance with the WpÜG without having to submit a takeover offer.

Further inquiry note:
Frank Elsner
Frank Elsner Kommunikation für Unternehmen GmbH
Phone.: +49 (0) 54 04 - 91 92 0
Fax: +49 (0) 54 04 - 91 92 29

end of announcement euro adhoc 18.09.2007 15:55:27
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emitter: Zapf Creation AG
Mönchrödener Straße 13
D-96472 Rödental
phone: +49 (0)9563 7251-0
FAX: +49 (0)9563 7251-387
mail: info@zapf-creation.com
WWW: http://www.zapf-creation.de
sector: Consumer Goods
ISIN: DE0007806002
indexes: CDAX, Classic All Share, Prime All Share
stockmarkets: official dealing/prime standard: Börse Frankfurt, free trade:
Börse Berlin, Börse Hamburg, Börse Stuttgart, Börse Düsseldorf,
Börse Hannover, Börse München
language: English

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