Cornerstone Technologies Holdings Limited - M&A Activity 2019

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this joint announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this joint announcement.

This joint announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of the Company.

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eleGance commercial and Financial Global Fortune PrintinG GrouP limited Global limited 精雅商業財經印刷集團有限公司 (Incorporated in the British Virgin Islands with limited liability) (Incorporated in the Cayman Islands with limited liability)

(Stock code: 8391)

Joint announcement

(1) conditional aGreement in relation to tHe Sale and PurcHaSe oF SHareS in eleGance commercial and Financial PrintinG GrouP limited;

(2) PoSSible mandatorY unconditional caSH oFFer bY VbG caPital limited For and on beHalF oF tHe oFFeror to acQuire all oF tHe iSSued SHareS oF eleGance commercial and Financial PrintinG GrouP limited (otHer tHan tHoSe alreadY oWned and/or aGreed to be acQuired bY tHe oFFeror and/or PartieS actinG in concert WitH it); (3) aPPointment oF indePendent Financial adViSer; and reSumPtion oF tradinG

Financial adviser to the offeror VbG caPital limited

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tHe Sale and PurcHaSe aGreement

The Board was informed by the Vendor that, on 5 November 2019 (after trading hours of the Stock Exchange), the Vendor (as vendor), the Offeror (as purchaser) and Mr. So entered into the Sale and Purchase Agreement, pursuant to which the Vendor has conditionally agreed to sell and the Offeror has conditionally agreed to purchase the Sale Shares, being 223,800,000 Shares,

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representing approximately 50.86% of the entire issued share capital of the Company as at the date of this joint announcement. The Consideration for the Sale Shares is HK$59,978,400 (equivalent to HK$0.268 per Sale Share).

The Completion is conditional upon the fulfilment (or, where applicable, waiver) of all the conditions as set out under the paragraph headed “Conditions for the Completion of the Sale and Purchase Agreement” of this joint announcement.

PoSSible mandatorY unconditional caSH oFFer

As of the date of this joint announcement, the Offeror, its ultimate beneficial owners and parties acting in concert with any of them (excluding the Vendor) do not hold, own or have control over any Shares or voting rights of the Company. Assuming that there are no changes to the issued share capital of the Company from the date of this joint announcement, upon Completion, the Offeror, its ultimate beneficial owners and parties acting in concert with any of them (excluding the Vendor) will own or control a total of 223,800,000 Shares, representing approximately 50.86% of the entire issued share capital of the Company, whilst the Vendor will own or control the Remaining Shares, representing approximately 24.14% of the entire issued share capital of the Company. Pursuant to the Takeovers Code, because each of the Vendor and the Offeror owns or controls more than 20% of the issued voting shares in the Company, they are presumed to be acting in concert under the Takeovers Code. They will in aggregate hold 330,000,000 Shares, representing 75% of the entire issued share capital of the Company. As the Offeror’s shareholding will increase to approximately 50.86%, the leader of the concert group will be changed.

Pursuant to Rule 26.1 of the Takeovers Code, subject to Completion, the Offeror will be required to make a mandatory unconditional cash offer for all the issued Shares (other than those already owned and/or agreed to be acquired by the Offeror, its ultimate beneficial owners and/or parties acting in concert with any of them).

Subject to and upon Completion, VBG Capital will make the Offer for and on behalf of the Offeror on the following basis in compliance with the Takeovers Code:

For each offer Share � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � HK$0�325 in cash

The Offer Price of HK$0.325 per Offer Share under the Offer is equal to the price paid by Mr. Liang for the acquisition of the Shares within six months prior to the commencement of the offer period. The Offer will be extended to all Independent Shareholders other than the Offeror and parties acting in concert with it in accordance with the Takeovers Code.

As at the date of this joint announcement, the Company has 440,000,000 Shares in issue and does not have any outstanding options, warrants or derivatives or securities convertible into Shares.

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The Offer will be unconditional in all aspects when it is made and will not be conditional upon acceptances being received in respect of a minimum number of the Offer Shares.

Principal terms of the Offer are set out in the section headed “POSSIBLE MANDATORY UNCONDITIONAL CASH OFFER” of this joint announcement.

tHe irreVocable undertaKinG

Immediately after Completion, the Vendor will continue to own and control the Remaining Shares, representing approximately 24.14% of the entire issued share capital of the Company. Pursuant to the Irrevocable Undertaking, the Vendor has irrevocably undertaken to the Offeror that, in respect of the Remaining Shares, it will not accept the Offer and it will not, whether directly or indirectly, sell, transfer, charge, pledge or grant any option over or otherwise dispose of or create any encumbrances in respect of any of the Shares held by the Vendor or any interest in any of the Remaining Shares immediately after Completion up to and including the date of the close of the Offer. Accordingly, the Offer will not be extended to the Vendor (which is presumed to be a party acting in concert with the Offeror).

total value of the offer

As at the date of this joint announcement, there are 440,000,000 Shares in issue. On the basis of the Offer Price of HK$0.325 per Sale Share, the entire issued share capital of the Company would be valued at HK$143,000,000.

Immediately after Completion and on the basis that there are 110,000,000 Shares (excluding the 106,200,000 Shares held by the Vendor, which is a party acting in concert with the Offeror and has given the Irrevocable Undertaking) subject to the Offer and assuming that there is no change in the issued share capital of the Company, the value of the Offer is HK$35,750,000.

Financial resources available to the offeror

The Offeror will finance and satisfy the aggregate Consideration payable in respect of the Sale Shares and consideration payable under the Offer by its internal resources. VBG Capital, being the financial adviser to the Offeror, is satisfied that sufficient financial resources are available to the Offeror to satisfy the Consideration payable for the Sale Shares under the Sale and Purchase Agreement and the consideration payable on full acceptance of the Offer (excluding the 106,200,000 Shares held by the Vendor, which is a party acting in concert with the Offeror and has given the Irrevocable Undertaking).

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deSPatcH oF comPoSite document

It is the intention of the Offeror and the Company to combine the offer document and the offeree board circular in a Composite Document in accordance with the Takeovers Code. Pursuant to Rule 8.2 of the Takeovers Code, the Composite Document is required to be despatched within 21 days of the date of this joint announcement or such later date as the Executive may approve.

As there is a pre-condition (that is, the Completion of the sale and purchase of the Sale Shares) to the making of the Offer, if the Vendor and the Offeror are unable to complete the Sale and Purchase Agreement and despatch the Composite Document within 21 days under Rule 8.2 of the Takeovers Code, an application will be made by the Offeror and the Company for the Executive’s consent under Note 2 to Rule 8.2 of the Takeovers Code to extend the deadline for the despatch of the Composite Document to within 7 days from the Completion Date.

reSumPtion oF tradinG

At the request of the Company, trading in the Shares on the Stock Exchange was suspended with effect from 1:00 p.m. on 5 November 2019 pending the release of this joint announcement. Application has been made by the Company for resumption of trading in the Shares on the Stock Exchange with effect from 9:00 a.m. on 14 November 2019.

WarninG

the offer is subject to completion which is conditional upon the satisfaction (or waiver by the offeror, where applicable) of certain conditions under the Sale and Purchase agreement� accordingly, the Sale and Purchase agreement may or may not be completed and the offer may or may not proceed� the issue of this joint announcement does not in any way imply that the offer will be made� independent Shareholders and potential investors of the company are advised to exercise caution when dealing in the securities of the company� if the independent Shareholders and the potential investors of the company are in any doubt about their position, they should consult their professional advisers�

this joint announcement is made in compliance with the takeovers code for the purpose of, among other things, informing the independent Shareholders and the potential investors of the company of the offer to be made� the directors make no recommendation as to the fairness or reasonableness of the offer or as to the acceptance of the offer in this joint announcement� independent Shareholders should read the composite document, including the recommendations of the independent board committee and the letter of advice from the independent Financial adviser, before forming a view on the offer�

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The Board was informed by the Vendor that, on 5 November 2019 (after trading hours), the Vendor (being a controlling shareholder of the Company), the Warrantors and the Offeror (as purchaser) entered into the Sale and Purchase Agreement, details of which are set out below.

tHe Sale and PurcHaSe aGreement

date: 5 November 2019 (after trading hours)

Parties: (a) Glorytwin Limited, as vendor, being one of the Warrantors;

(b) Global Fortune Global Limited, as purchaser, being the Offeror; and
(c) Mr. So Wing Keung, being one of the Warrantors.

Each of the Offeror, its ultimate beneficial owners and parties acting in concert with any of them (excluding the Vendor) is a third party independent of and not connected with the Company and the Company’s connected persons.

the Sale Shares

Pursuant to the Sale and Purchase Agreement, the Vendor has conditionally agreed to sell and the Offeror has conditionally agreed to acquire a total of 223,800,000 Shares, being the Sale Shares (representing approximately 50.86% of the issued share capital of the Company as at the date of this joint announcement), free from all encumbrances and together with all rights and benefits attached and accrued to them at the Completion Date.

consideration for the Sale Shares

The Consideration for the sale and purchase of the Sale Shares under the Sale and Purchase Agreement shall be the aggregate sum of HK$59,978,400, being HK$0.268 per Sale Share, which was agreed between the Offeror and the Vendor after arm’s length negotiations, taking into account, among others the audited consolidated net asset value per Share as at 31 March 2019. The Consideration shall be payable by the Offeror to the Vendor in cash in the following manner:

(a) HK$10,000,000 being the initial deposit and part payment of the Consideration; and

(b) HK$49,978,400 being the balance of the Consideration.

The Offeror has already settled the initial deposit of the Consideration. The Offeror will settle the remaining balance of the Consideration in cash in Hong Kong dollars on the Completion Date. The Consideration will be financed by the Offeror with its internal resources.

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conditions for the completion of the Sale and Purchase agreement

Completion is conditional upon the satisfaction (or waiver by the Offeror, where applicable) of the following conditions:

(a) the completion of due diligence investigation by the Offeror, and its advisors, authorised agents and representatives into the Group, including but limited to the business, affairs, operations, assets, accounts, liabilities, financial condition, legal, taxation, prospects and records of the Group and the results of such due diligence investigation being satisfactory to the Offeror at its sole and absolute discretion and that there is no matter arising from the due diligence review which in the opinion of the Offeror may adversely affect the value of the Sale Shares;
(b) no applicable law, order or governmental authority shall have been enacted, made effective or constituted (as the case may be) that materially delays or makes illegal the performance of the Sale and Purchase Agreement;
(c) all regulatory approvals required to have been obtained by the Offeror, Vendor and Warrantors having been obtained on terms reasonably and satisfactorily to the Offeror;
(d) the passing of the board resolutions of the Vendor to approve the execution of the Sale and Purchase Agreement and the transactions contemplated thereunder, including but not limited to the acquisition of the Sale Shares;
(e) no material adverse change having occurred to the business, assets, financial position and performance of the Group;
(f) no objection having been raised by the SFC and/or other governmental or regulatory bodies to the transactions contemplated under the Sale and Purchase Agreement prior to or on the Completion Date, and the Company having issued this joint announcement;
(g) the Vendor having duly executed and delivered the Irrevocable Undertaking to the Purchaser;
(h) the warranties contained in the Sale and Purchase Agreement shall remain true, accurate and not misleading in any material aspect as given as the date of the Sale and Purchase Agreement and at all times up to and including the Completion Date; and
(i) the Shares remaining listed and traded on GEM at all times from the date of the Sale and Purchase Agreement and on the Completion Date, save for suspension on account of clearance of any announcement on any documents in respect of the transactions contemplation under the Sale and Purchase Agreement.

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The Offeror has the right to waive conditions (a), (d), (e) and (g) in writing. If any of the conditions above have not been satisfied or otherwise waived on or before the Long Stop Date (or such other date as agreed by parties to the Sale and Purchase Agreement in writing), the Sale and Purchase Agreement shall be terminated.

As at the date of this joint announcement, all conditions have been fulfilled.

indemnity

Pursuant to the Sale and Purchase Agreement, the Warrantors shall indemnify and at all times keep indemnified the Indemnified Parties from and against all losses, liabilities, damages, costs (including legal costs), charges, interests, penalties, expenses (including taxation), disbursements, actions, claims or proceedings reasonably incurred, suffered or sustained by each of the Indemnified Parties or asserted against each of the Indemnified Parties or any or all of them directly or indirectly resulting from or arising out of or in connection with any of the following:

(a) any breach of warranties or any breach by the Vendor of any material terms of the Sale and Purchase Agreement;
(b) any breach of any of the undertakings under the Sale and Purchase Agreement by the Vendor;
(c) all existing, contingent or conditional liabilities of the Group, save and except ELE Print Solutions Limited, a wholly-owned subsidiary of the Company, with a cause or origin in events, facts or transactions arising on or before the date of the Company Accounts and which have not been accounted or provided for, or the part of such liabilities exceeding the amount accounted or provided for in the Company Accounts;
(d) any losses including taxes, duties, levies, delayed interest or penalties not provided for in the Company Accounts, or the part of such losses exceeding the amount accounted or provided in the Company Accounts which may result from any administrative, Tax, customs or social security investigation of the Group in relation to the period prior to the Completion Date; and
(e) any fictitious assets of the Group as accounted for in the Company Accounts.

completion of the Sale and Purchase agreement

Subject to the fulfillment (or, where applicable, waiver) of all the Conditions, Completion shall take place on the Completion Date, which is within seven (7) Business Days after the day on which the last Condition is fulfilled or such other date as may be mutually agreed in writing between the Vendor and the Offeror. An announcement will be made upon Completion in accordance with the Listing Rules.

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PoSSible mandatorY unconditional caSH oFFer

Pursuant to Rule 26.1 of the Takeovers Code, subject to Completion, the Offeror will be required to make an unconditional mandatory cash offer for all the issued Shares (other than those already owned and/or agreed to be acquired by the Offeror, its ultimate beneficial owners and/or parties acting in concert with any of them).

Subject to and upon Completion, VBG Capital will make the Offer for and on behalf of the Offeror on the following basis in compliance with the Takeovers Code:

For each Offer Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$0.325 in cash

The Offer will be unconditional in all aspects when it is made and will not be conditional upon acceptances being received in respect of a minimum number of Offer Shares.

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offer Price and comparison of value

The Offer Price of HK$0.325 per Offer Share represents:

(a) a discount of approximately 14.5% to the closing price of HK$0.38 per Share as quoted on the Stock Exchange on 5 November 2019, being the Last Trading Day;
(b) a discount of approximately 13.33% to the average of the closing prices as quoted on the Stock Exchange for the five consecutive trading days immediately prior to and including the Last Trading Day of approximately HK$0.375 per Share;
(c) a discount of approximately 14.7% over the average of the closing prices as quoted on the Stock Exchange for the 10 consecutive trading days immediately prior to and including the Last Trading Day of approximately HK$0.381 per Share;
(d) a discount of approximately 23.0% over the average of the closing prices as quoted on the Stock Exchange for the 30 consecutive trading days immediately prior to and including the Last Trading Day of approximately HK$0.422 per Share; and
(e) a premium of approximately 55.5% over the audited consolidated net assets per Share of approximately HK$0.209 as at 31 March 2019 (being the date to which the latest audited consolidated annual results of the Group were made up), calculated based on the Group’s audited consolidated net assets attributable to the Shareholders of approximately HK$92,060,000 as at 31 March 2019 and 440,000,000 Shares in issue as at the date of this joint announcement.

Highest and lowest Share price

During the six-month period up to and including the Last Trading Day:

(i) the highest closing price of the Shares as quoted on the Stock Exchange was HK$0.56 per Share on 28 and 29 August 2019; and
(ii) the lowest closing price of the Shares as quoted on the Stock Exchange was HK$0.202 per Share on 28 and 29 May 2019.

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the irrevocable undertaking

Immediately after Completion, the Vendor will continue to own and control the Remaining Shares, being 106,200,000 Shares and representing approximately 24.14% of the entire issued share capital of the Company as at the date of this joint announcement. The Vendor intends to hold the Remaining Shares for investment purpose. The Vendor has irrevocably undertaken to the Offeror that, in respect of the Remaining Shares, it will not accept the Offer and it will not, whether directly or indirectly, sell, transfer, charge, pledge or grant any option over or otherwise dispose of or create any encumbrances in respect of any of the Shares held by the Vendor or any interest in any of the Remaining Shares immediately after Completion up to and including the date of the close of the Offer. Accordingly, the Offer will not be extended to the Vendor (which is presumed to be a party acting in concert with the Offeror).

The Irrevocable Undertaking shall cease to be binding if the Sale and Purchase Agreement is terminated and the Offer is not proceeded with.

total value of the offer

confirmation of financial resources

The aggregate Consideration payable by the Offeror in respect of the Sale Shares under the Sale and Purchase Agreement and the maximum consideration payable under the Offer will amount to HK$95,728,400.

The Offeror will finance and satisfy the aggregate Consideration payable in respect of the Sale Shares under the Sale and Purchase Agreement and consideration payable under the Offer by its internal resources. As at the date of this joint announcement, VBG Capital and its associates did not have any interest in any Shares and other relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company.

VBG Capital, being the financial adviser to the Offeror, is satisfied that sufficient financial resources are available to the Offeror to satisfy the Consideration payable by the Offeror for the Sale Shares under the Sale and Purchase Agreement and the consideration payable under the full acceptance of the Offer (excluding the 106,200,000 Shares held by the Vendor, which is a party acting in concert with the Offeror and has given the Irrevocable Undertaking).

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effect of accepting the offer

The Offer will be unconditional in all respects. Acceptance of the Offer will be irrevocable and not capable of being withdrawn, except as permitted under the Takeovers Code.

Provided that valid acceptance forms and the relevant certificate(s) and/or other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) are complete and in good order and have been received by the registrar of the Company, the Independent Shareholders will sell their tendered Shares to the Offeror free from all encumbrances and together with all rights attaching or accruing hereto, including, without limitation, the rights to receive in full all dividends and other distributions, if any, recommended, declared, made or paid by reference to a record date on or after the date on which the Offer is made, that is, the date of the posting of the Composite Document. As at the date of this joint announcement, the Company has no plan to distribute and/or declare any dividend during the offer period.

Acceptance of the Offer by any Independent Shareholder will be deemed to constitute a warranty by such person that all Shares sold by such person under the Offer are free from all encumbrances whatsoever and together with all rights accruing or attaching thereto, including, without limitation, the right to receive dividends and distributions recommended, declared, made or paid, if any, by reference to a record date on or after the date on which the Offer is made.

Payment

Payment in cash in respect of acceptances of the Offer will be made as soon as possible but within seven (7) Business Days of the date of receipt of a duly completed acceptance of the Offer. Relevant documents evidencing title must be received by or on behalf of the Offeror to render such acceptance of the Offer complete and valid.

No fractions of a cent will be payable and the amount of the consideration payable to an Independent Shareholder who accepts the Offer will be rounded up to the nearest cent.

dealing and interests in the company’s securities

On or about 29 April 2019, Mr. Liang bought on market 400,000 Shares at a price of HK$0.325 per Share. On or about 4 October 2019, Mr. Liang disposed on market of those 400,000 Shares at prices ranging from HK$0.405 to HK$0.435 per Share. Save for the aforesaid dealings and the Sale and Purchase Agreement, to which each of the Offeror and the Vendor is a party, none of the Offeror, its ultimate beneficial owners, the Vendor and its ultimate beneficial owners, nor parties acting in concert with any of them has dealt in any Shares, options, derivatives, warrants or other securities convertible into Shares during the six-month period prior to the date of this joint announcement.

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overseas independent Shareholders

As the Offer to persons not resident in Hong Kong may be affected by the laws of the relevant jurisdiction in which they are resident, Overseas Independent Shareholders who are citizens, residents or nationals of a jurisdiction outside Hong Kong should observe any applicable legal or regulatory requirements and, where necessary, consult their own professional advisers in respect of the acceptance of the Offer. It is the responsibilities of Overseas Independent Shareholders who wish to accept the Offer to satisfy themselves as to the full observance of the laws and regulations of the relevant jurisdictions in connection with the acceptance of the Offer (including the obtaining of any governmental or other consent which may be required or the compliance with other necessary formalities and the payment of any transfer or other taxes due in respect of such jurisdictions).

any acceptance of the offer by any overseas independent Shareholder will be deemed to constitute a representation and warranty from such overseas independent Shareholder to the offeror that the local laws and requirements have been complied with� the overseas independent Shareholders should consult their professional advisers if in doubt�

Hong Kong stamp duty

The seller’s Hong Kong ad valorem stamp duty arising in connection with acceptances of the Offer will be payable by the Independent Shareholders who accept the Offer at the rate of 0.1% of the consideration payable by the Offeror for the Shares of such Independent Shareholders, or (if higher) the value of the Shares as determined by the Collector of Stamp Revenue under the Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong). The relevant amount of stamp duty payable by the Independent Shareholders will be deducted from the consideration payable to the accepting Independent Shareholders under the Offer. The Offeror will bear its own portion of buyer’s ad valorem stamp duty at the rate of 0.1% of the consideration payable in respect of acceptances of the Offer and will account to the Stamp Office of Hong Kong for all the stamp duty payable for the sale and purchase of the Shares which are validly tendered for acceptance under the Offer.

taxation advice

Independent Shareholders are recommended to consult their own professional advisers if they are in any doubt as to the taxation implications of accepting or rejecting the Offer. It is emphasised that none of the Company, the Offeror or any of their respective directors, officers or associates or any other person involved in the Offer accepts responsibility for any taxation effects on, or liabilities of, any persons as a result of their acceptance or rejection of the Offer.

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other arrangements

Each of the Offeror and the Vendor confirms that as at the date of this joint announcement:

(i) none of the Offeror and its ultimate beneficial owners, the Vendor and its ultimate beneficial owners and/or parties acting in concert with any of them has received any irrevocable commitment to accept the Offer;
(ii) there is no outstanding derivative in respect of securities in the Company which has been entered into by the Offeror and its ultimate beneficial owners, the Vendor and its ultimate beneficial owners and/or parties acting in concert with any of them;
(iii) save for the Sale and Purchase Agreement and the Irrevocable Undertaking referred to above, there is no arrangement (whether by way of option, indemnity or otherwise) in relation to the Offeror or the Company which may be material to the Offer (as referred to in Note 8 to Rule 22 of the Takeovers Code);
(iv) none of the Offeror and its ultimate beneficial owners, the Vendor and its ultimate beneficial owners and/or parties acting in concert with any of them owns or has control or direction over any voting rights or rights over the Shares or convertible securities, options, warrants or derivatives of the Company;
(v) save for the Sale and Purchase Agreement, there is no agreement or arrangement to which the Offeror and its ultimate beneficial owners, the Vendor and its ultimate beneficial owners and/or parties acting in concert with any of them is a party which relates to circumstances in which it may or may not invoke or seek to invoke a precondition or a condition to the Offer;
(vi) none of the Offeror and its ultimate beneficial owners, the Vendor and its ultimate beneficial owners and/or parties acting in concert with any of them has borrowed or lent any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company;
(vii) apart from the Consideration for the Sale Shares, there is no other consideration, compensations or benefits in whatever form paid or to be paid by the Offeror or any parties acting in concert with it (excluding the Vendor) to the Vendor or parties acting in concert with the Vendor (excluding the Offeror) in connection with the sale and purchase of the Sale Shares;
(viii) there is no understanding, arrangement, agreement or special deal (as defined under Rule 25 of the Takeovers Code) between the Offeror or parties acting in concert with it (excluding the Vendor) on the one hand and the Vendor and parties acting in concert with the Vendor (excluding the Offeror) on the other hand; and
(ix) there is no understanding, arrangement or agreement or special deal between (1) any Shareholder; and (2)(a) the Offeror and any party acting in concert with it, including the Vendor, or (b) the Company, its subsidiaries or associated companies.

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SHareHoldinG Structure oF tHe comPanY

The following table sets out the shareholding structure of the Company (i) immediately before Completion and as at the date of this joint announcement; and (ii) immediately after Completion but before the Offer is made:

name of Shareholders (i) immediately before completion and as at the date of this joint announcement Number of Shares Approximate % The Offeror and parties in concert with it (excluding the Vendor) — — The Vendor and parties in concert with it_(Note)_ 330,000,000 75 Subtotal 330,000,000 75 Public Shareholders 110,000,000 25 total 440,000,000 100	(ii) immediately after completion but before the offer is made Number of Shares Approximate % 223,800,000 50.86 106,200,000 24.14 330,000,000 75 110,000,000 25 440,000,000 100

Note: As at the date of this joint announcement, the Vendor is ultimately controlled by Mr. So, who owns 90% of the issued share capital of the Company through his wholly-owned company, Colorful Bay; and Mr. Leung, who owns 10% of the issued share capital of the Company through his wholly-owned company, Deep Champion. Mr. So and Mr. Leung are executive Directors.

inFormation on tHe PartieS

the Group

The Company is incorporated in the Cayman Islands with limited liability and its Shares are listed on GEM of the Stock Exchange (stock code: 8391). The principal activity of the Company is investment holding. The principal activities of the Group are the provision of printing services. It provides commercial printing and financial printing services. In addition, the Group also provides standalone ad hoc design and artwork, and translation services to corporate customers.

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Set out below is a summary of the audited consolidated financial result of the Group for the financial years ended 31 March 2018 and 31 March 2019, prepared in accordance with the relevant accounting principles and financial regulations applicable to the International Financial Reporting Standards:

	For the financial	year ended
	31 March
	2018	2019
	HK$	HK$
	(audited)	(audited)
Revenue	80,610,000	73,976,000
Loss before tax	7,894,000	7,751,000
Loss for the year	8,562,000	7,569,000
Net assets	42,558,000	92,060,000

the offeror

The Offeror is a company incorporated in the BVI with limited liability and is owned as to 51% by Mr. Wu and as to 49% by Mr. Liang. As at the date of this joint announcement, the directors of the Offeror are Mr. Wu and Mr. Liang.

Mr. Wu, aged 37, obtained a diploma in Information Technology from the Singapore Temasek Polytechnic. Mr. Wu has extensive experience in investing and managing companies. He is currently the chief executive officer of Chang Yuan Investments Pte Ltd, Chang He Holdings Pte Ltd and Champion Management Pte Ltd in Singapore. His business encompasses property investment, asset management, business restructuring, hotel management and electric vehicles. He is mainly responsible for overseeing his business’s performance and management and directing the formulation of business development strategies. From 2012 to 2015, under his management and leadership, his business has acquired the property investment portfolio aggregately valued over approximately SG$150.0 million at the respective purchase dates including (i) commercial offices located at Marine Parade and Paya Lebar; (ii) hotels located at Joo Chiat and North Canal; and (iii) retail, food and beverage units at Katong. Mr. Wu does not have any experience in the provision of printing services.

Mr. Liang, aged 38, obtained his bachelor of business administration, marketing from the University of Regina, Canada in 2007. Mr. Liang has been the chairman of 廣州市番禺區邦騰化工有限公司 (transliterated in English as Guangzhou Panyu District Bangteng Chemical Industry Limited), a company that is principally engaged in the production of industrial unsaturated resin, paints and powder coating since 2007. Mr. Liang has also been the chairman of 廣州番禺區宏豪投資有限公司 (transliterated in English as Guangzhou Panyu District Honghao Investment Limited), a company that is principally engaged in the provision of investment consultancy service and property management since 2018. Mr. Liang does not have any experience in the provision of printing services.

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As at the date of this joint announcement, the Offeror is principally engaged in investment holding and save for entering into the Sale and Purchase Agreement, the Offeror did not engage in any other business activities.

intention oF tHe oFFeror reGardinG tHe GrouP

Upon Completion, the Offeror intends that the Group will continue to carry on its existing businesses and will maintain the listing status of the Company on GEM.

The Offeror will, following the close of the Offer, conduct a detailed review of the business operations and financial position of the Group to formulate a sustainable business plans and a longterm strategy for the Group and explore other suitable business or investment opportunities for enhancing its future development and strengthening its revenue base. Subject to the results of the review, the Offeror may explore other business opportunities for the Company and consider whether any asset disposals, asset acquisitions, business rationalisation, business divestment, fund raising, restructuring of the business and/or business diversification will be appropriate in order to enhance long-term growth potential of the Group.

Notwithstanding the above, as at the date of this joint announcement, no investment or business opportunity has been identified nor has the Offeror entered into any agreements, arrangements, understandings or negotiations in relation to the injection of any assets or business into the Group, and the Offeror has no intention to discontinue the employment of the employees (save for the change in the composition of the Board) or to dispose of or re-deploy the assets of the Group other than those in its ordinary course of business.

Public Float and maintenance oF tHe liStinG StatuS oF tHe comPanY

The Offeror intends to maintain the listing of the Shares on the Stock Exchange following the close of the Offer.

The Stock Exchange has stated that if, at the close of the Offer, less than the minimum prescribed percentage applicable to the Company, being 25% of the issued Shares, are held by the public, or if the Stock Exchange believes that:

(a) a false market exists or may exist in the trading of the Shares; or
(b) there are insufficient Shares in public hands to maintain an orderly market,

it will consider exercising its discretion to suspend dealings in the Shares.

— 16 —

Therefore, it should be noted that upon close of the Offer, there may be insufficient public float of the Shares and the trading in the Shares may be suspended until sufficient public float exists for the Shares. Each of the Offeror and the Company will undertake to the Stock Exchange to take appropriate steps to ensure that sufficient public float exists in the Shares following completion of the Offer.

deSPatcH oF tHe comPoSite document

The Composite Document will contain, among other things, details of the Offer (accompanied by the acceptance and transfer forms) and incorporate the letter of recommendation from the Independent Board Committee and the letter of advice from the Independent Financial Adviser and other relevant information on the Offeror and the Group as required under the Takeovers Code.

indePendent board committee and indePendent Financial adViSer

The Independent Board Committee, comprising all independent non-executive Directors, namely Mr. Kwong Chi Wing, Mr. Chan Ka Yeung and Mr. Tam Ka Hei Raymond, has been established by the Company pursuant to Rule 2.1 of the Takeovers Code to advise the Independent Shareholders in respect of the Offer, as to whether the terms of the Offer are fair and reasonable and as to the acceptance of the Offer.

An Independent Financial Adviser will be appointed by the Company pursuant to Rule 2.1 of the Takeovers Code to advise the Independent Board Committee in respect of the Offer and, in particular, as to whether or not the Offer is fair and reasonable and as to the acceptance of the Offer. A further announcement will be made by the Company as soon as possible after the appointment of the Independent Financial Adviser.

— 17 —

diScloSure oF dealinGS

In accordance with Rule 3.8 of the Takeovers Code, associates of the Company or the Offeror (including persons holding 5% or more of a class of relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company or the Offeror, or any person who as a result of any transaction owns or controls 5% or more of any class of securities of the Company and of the Offeror respectively) are reminded to disclose their dealings in the securities of the Company pursuant to the Takeovers Code.

The full text of Note 11 to Rule 22 of the Takeovers Code is reproduced below pursuant to Rule 3.8 of the Takeovers Code:

“Responsibility of stockbrokers, banks and other intermediaries

Stockbrokers, banks and others who deal in relevant securities on behalf of clients have a general duty to ensure, so far as they are able, that those clients are aware of the disclosure obligations attaching to associates of an offeror or the offeree company and other persons under Rule 22 and that those clients are willing to comply with them. Principal traders and dealers who deal directly with investors should, in appropriate cases, likewise draw attention to the relevant Rules. However, this does not apply when the total value of dealings (excluding stamp duty and commission) in any relevant security undertaken for a client during any 7 day period is less than HK$1 million.

This dispensation does not alter the obligation of principals, associates and other persons themselves to initiate disclosure of their own dealings, whatever total value is involved.

Intermediaries are expected to co-operate with the Executive in its dealings enquiries. Therefore, those who deal in relevant securities should appreciate that stockbrokers and other intermediaries will supply the Executive with relevant information as to those dealings, including identities of clients, as part of that co-operation.”

reSumPtion oF tradinG in tHe SHareS

— 18 —

WarninG

deFinitionS

In this joint announcement, the following expressions shall have the meanings set out below unless the context requires otherwise.

“acting in concert”	has the meaning ascribed thereto under the Takeovers Code
“associate(s)”	has the meaning ascribed thereto under the Takeovers Code
“Board”	the board of Directors
“Business Day(s)”	a day on which the Stock Exchange is open for the transaction
	of business
“BVI”	The British Virgin Islands
“Colorful Bay”	Colorful Bay Limited, a company incorporated in the BVI with
	limited liability and is wholly-owned by Mr. So as at the date
	of this joint announcement
“Company”	Elegance Commercial and Financial Printing Group Limited,
	a company incorporated in the Cayman Islands with limited
	liability, the Shares of which are listed on GEM of the Stock
	Exchange (stock code: 8391)

— 19 —

“Company Accounts”

the audited consolidated balance sheet of the Group at the Last Accounting Date and the audited consolidated profit and loss statement and cash flow statement of the Group for the 12-month period ended on the Last Accounting Date, and all notes, reports and other documents annexed to those accounts
“Completion”

the completion of the sale and purchase of the Sale Shares in accordance with the terms and conditions of the Sale and Purchase Agreement

“Completion Date”
within seven (7) Business Days immediately after the date on which the last of the Conditions to Completion pursuant to the Sale and Purchase Agreement is fulfilled or waived (or such other date as shall be agreed among the parties to the Sale and Purchase Agreement)
“Composite Document”
the composite offer and response document to be jointly issued and despatched by the Offeror and the Company to the Independent Shareholders in connection with the Offer in compliance with the Takeovers Code, containing, among other things, the Offer (accompanied by the acceptance and transfer form), the recommendation of the Independent Board Committee and the advice of the Independent Financial Adviser
“Conditions”
the conditions precedent set out in the paragraph headed ‘‘Conditions for the Completion of the Sale and Purchase Agreement’’
“connected person(s)”
has the meaning ascribed thereto under the Listing Rules
“Consideration”
being HK$59,978,400, representing the amount payable by the Offeror to the Vendor for the purchase of the Sale Shares under the Sale and Purchase Agreement
“controlling shareholder”
has the meaning ascribed thereto under the Listing Rules
“Deep Champion”
Deep Champion Limited, a company incorporated in the BVI with limited liability and is wholly-owned by Mr. Leung as at the date of this joint announcement
“Director(s)” the director(s) of the Company

— 20 —

“Executive”

“GEM”
“Group”
“HK$”
“Hong Kong”
“Indemnified Parties”
“Independent Board Committee”
“Independent Financial Adviser”
“Independent Shareholder(s)”
“Irrevocable Undertaking”
“Last Accounting Date”
“Last Trading Day”

the Executive Director of the Corporate Finance Division of the SFC or any of his delegates

GEM operated by the Stock Exchange

the Company and its subsidiaries
Hong Kong dollars, the lawful currency of Hong Kong
the Hong Kong Special Administrative Region of the PRC
the Offeror (or its nominee(s)) and the Group
the independent board committee of the Board, comprising all independent non-executive Directors, namely Mr. Kwong Chi Wing, Mr. Chan Ka Yeung and Mr. Tam Ka Hei Raymond, formed for the purpose of advising the Independent Shareholders in respect of the Offer
the independent financial adviser to be appointed for the purpose of advising the Independent Board Committee in relation to the terms of the Offer and in particular (i) as to whether the Offer is, or is not, fair and reasonable; and (ii) as to acceptance of the Offer
holder(s) of Shares other than (i) the Vendor and (ii) the Offeror and persons acting in concert with any of them
the irrevocable undertaking given by the Vendor to the Offeror in respect of the 106,200,000 Shares held by it (representing approximately 24.14% of the issued share capital of the Company as at the date of this joint announcement), details of which are set out in the paragraph headed “The Irrevocable Undertaking” in this joint announcement
31 March 2019 in respect of the financial statements of the Group
5 November 2019, being the day on which Shares last traded on the Stock Exchange immediately prior to the publication of this joint announcement

— 21 —

“Listing Rules”

the Rules Governing the Listing of Securities on GEM of The Stock Exchange of Hong Kong Limited, as may be amended, supplemented or otherwise modified from time to time

“Long Stop Date” seven (7) days from and including the date of the Sale and Purchase Agreement, or such other later date as may be mutually agreed in writing between the Vendor and the Offeror

“Mr. Leung” Mr. Leung Shu Kin, an executive Director of the Company. Mr. Leung is also a controlling shareholder of the Company as at the date of this joint announcement
“Mr. Liang” Mr. Liang Zihao, who legally and beneficially owns 49% of the issued share capital of the Offeror as at the date of this joint announcement
“Mr. So” Mr. So Wing Keung, the chairman, the chief executive officer and an executive Director of the Company. Mr. So is also a controlling shareholder of the Company as at the date of this joint announcement
“Mr. Wu” Mr. Wu Jianwei, who legally and beneficially owns 51% of the issued share capital of the Offeror as at the date of this joint announcement
“Offer” the mandatory unconditional cash offer to be made by VBG Capital for and on behalf of the Offeror, to acquire all the issued Shares not already owned and/or agreed to be acquired by the Offeror and/or parties acting in concert with it (excluding the Vendor) in accordance with the Takeovers Code

“Offeror” Global Fortune Global Limited, a company incorporated in the BVI with limited liability, details of which are set out in the paragraph headed “INFORMATION ON THE PARTIES — The Offeror” in this joint announcement

“Offer Price” the cash amount of HK$0.325 payable by the Offeror for each Offer Share

“Offer Share(s)” all the issued Shares (other than those already owned or agreed to be acquired by the Offeror and parties acting in concert with it)

— 22 —

“Overseas Independent	Independent Shareholder(s) whose address(es), as shown on the
Shareholder(s)”	register of members of the Company, is/are outside Hong Kong
“PRC”	the People’s Republic of China, which, for the purposes of this
	joint announcement, excludes Hong Kong, the Macau Special
	Administrative Region of the PRC and Taiwan
“Remaining Shares”	106,200,000 Shares held by the Vendor immediately after
	Completion
“Sale and Purchase Agreement”	the sale and purchase agreement dated 5 November 2019
	entered into among the Offeror, the Warrantors and the Vendor
	in respect of, among other things, the purchase by the Offeror,
	and the sale by the Vendor of the Sale Shares
“Sale Shares”	223,800,000 Shares held by the Vendor, representing
	approximately 50.86% of the entire issued share capital of the
	Company as at the date of this joint announcement
“SFC”	the Securities and Futures Commission of Hong Kong
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the Laws
	of Hong Kong)
“Share(s)”	ordinary share(s) of HK$0.01 each in the issued share capital of
	the Company
“Shareholder(s)”	holder(s) of Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeovers Code”	the Code on Takeovers and Mergers
“VBG Capital”	VBG Capital Limited, the financial adviser of the Offeror and
	parties acting in concert with it in respect of the Offer, and is a
	corporation licensed to carry out type 1 (dealing in securities)
	and type 6 (advising on corporate finance) regulated activities
	under the SFO

— 23 —

“Vendor”

Glorytwin Limited, a company incorporated in the BVI with limited liability and is owned as to 90% by Colorful Bay and as to 10% by Deep Champion as at the date of this joint announcement

“Warrantors” collectively, Mr. So and the Vendor “%” per cent

By order of the board of directors of By order of the Board of Global Fortune Global limited elegance commercial and Financial Printing Group limited Wu Jianwei So Wing Keung Director Chairman and Chief Executive Officer

Hong Kong, 13 November 2019

for identification purpose only

As at the date of this joint announcement, the Board comprises Mr. SO Wing Keung and Mr. LEUNG Shu Kin as executive Directors, and Mr. KWONG Chi Wing, Mr. CHAN Ka Yeung and Mr. TAM Ka Hei Raymond as independent non-executive Directors.

This joint announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this joint announcement (other than that relating to the Offeror, its associates and parties acting in concert with it) is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this joint announcement misleading.

The Directors jointly and severally accept full responsibility for the accuracy of the information contained in this joint announcement (other than that relating to the Offeror, its associates and parties acting in concert with it (excluding the Vendor)) and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in this joint announcement (other than opinions expressed by the directors of the Offeror) have been arrived at after due and careful consideration and there are no other facts not contained in this joint announcement, the omission of which would make any statement in this joint announcement misleading.

As at the date of this joint announcement, the directors of the Offeror are Mr. Wu Jianwei and Mr. Liang Zihao.

— 24 —

The directors of the Offeror jointly and severally accept full responsibility for the accuracy of the information contained in this joint announcement (other than that relating to the Group and the Vendor) and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in this joint announcement (other than opinions expressed by the Directors) have been arrived at after due and careful consideration and there are no other facts not contained in this joint announcement, the omission of which would make any statement in this joint announcement misleading.

This joint announcement will be published on GEM website at http://www.hkgem.com on the “Latest Listed Company Information” page for at least 7 days from the date of publication and on the Company’s website at www.elegance.hk.

In case of any inconsistency, the English text of this joint announcement shall prevail over the Chinese text.

— 25 —

AI assistant

Cornerstone Technologies Holdings Limited — M&A Activity 2019

51420_rns_2019-11-13_f2b6e432-06e4-43b8-b616-40e53ceb8f48.pdf

eleGance commercial and Financial Global Fortune PrintinG GrouP limited Global limited 精雅商業財經印刷集團有限公司 (Incorporated in the British Virgin Islands with limited liability) (Incorporated in the Cayman Islands with limited liability)

Joint announcement

tHe Sale and PurcHaSe aGreement

PoSSible mandatorY unconditional caSH oFFer

tHe irreVocable undertaKinG

total value of the offer

Financial resources available to the offeror

deSPatcH oF comPoSite document

reSumPtion oF tradinG

WarninG

tHe Sale and PurcHaSe aGreement

the Sale Shares

consideration for the Sale Shares

conditions for the completion of the Sale and Purchase agreement

indemnity

completion of the Sale and Purchase agreement

PoSSible mandatorY unconditional caSH oFFer

offer Price and comparison of value

Highest and lowest Share price

the irrevocable undertaking

total value of the offer

confirmation of financial resources

effect of accepting the offer

Payment

dealing and interests in the company’s securities

overseas independent Shareholders

Hong Kong stamp duty

taxation advice

SHareHoldinG Structure oF tHe comPanY

inFormation on tHe PartieS

the Group

the offeror

intention oF tHe oFFeror reGardinG tHe GrouP

Public Float and maintenance oF tHe liStinG StatuS oF tHe comPanY

deSPatcH oF tHe comPoSite document

indePendent board committee and indePendent Financial adViSer

diScloSure oF dealinGS

“Responsibility of stockbrokers, banks and other intermediaries

reSumPtion oF tradinG in tHe SHareS

WarninG

deFinitionS

“Executive”

“Listing Rules”

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Cornerstone Technologies Holdings Limited M&A Activity 2019