Esprit Holdings Limited — M&A Activity 2000

Apr 5, 2000

Listed Company Information

GRANDE HOLDINGS<0186> & TOYO HOLDINGS<0094> - Joint Announcement The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. THE GRANDE HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) TOYO HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) CONNECTED TRANSACTION CONNECTED AND ASSET ACQUISITION DISCLOSEABLE TRANSACTION ASSET DISPOSITION Financial adviser to Toyo Holdings Limited PACIFIC CHALLENGE Pacific Challenge Capital Limited The respective boards of directors of The Grande Holdings Limited and Toyo Holdings Limited wish to announce that Toyo and Tomei Technologies, a wholly owned subsidiary of Grande, have entered into a conditional sale and purchase agreement whereby Tomei Technologies has conditionally agreed to purchase from Toyo the entire issued share capital of Tomei BVI at a cash consideration of HK$181,429,000. Grande, being the controlling shareholder of Toyo, beneficially owns approximately 50.11% of the shareholding interest of Toyo. The Agreement constitutes a connected transaction for Toyo under the Listing Rules, and is required under the Listing Rules to be conditional upon the approval of the independent shareholders of Toyo in the SGM to be convened by Toyo. A Circular containing further details of the Agreement and a notice to convene the SGM to approve the acquisition of the entire issued share capital of Temei BVI will be despatched to the shareholders of Toyo as soon as practicable. An independent financial adviser will be appointed to advise the independent board committee of Toyo in relation to the Agreement. As the transaction contemplated under the Agreement is a transaction between Tomei Technologies, Grande's wholly owned subsidiary, and Toyo, Grande's non-wholly owned subsidiary, the Agreement constitutes a connected transaction for Grande under the Listing Rules. However, insofar as the directors of Grande are aware, none of the substantial shareholders has any interest in Toyo otherwise than indirect interest in Toyo through Grande. Barrican Investments Corporation, a controlling shareholder of Grande with approximately 70.8% shareholding interest as at the date of this announcement, has expressed that it will vote in favour of the acquisition of the entire issued share capital of Tomei BVI. Barrican will submit to the Stock Exchange a written confirmation that it will vote in favour of the acquisition if a shareholders' meeting were to be held. Grande will apply to the Stock Exchange for a waiver under rule 14.10 of the Listing Rules to convene a shareholders' meeting to approve the acquisition by Tomei Technologies as described in this announcement. A circular containing further details of the Agreement will be despatched to the shareholders of Grande as soon as practicable. An independent financial adviser will be appointed to advise the independent board committee of Grande in relation to the Agreement. THE SALE AND PURCHASE AGREEMENT DATED 2nd April, 2000 (the "Agreement") Parties Vendor : Toyo Holdings Limited ("Toyo") Purchaser : Tomei Technologies Limited ("Tomei Technologies"), a wholly owned subsidiary of the Grande Holdings Limited ("Grande") incorporated in the British Virgin Islands with limited liability. Assets to be acquired Tomei Technologies has conditionally agreed to acquire the 50,000 shares of US$1.00 each (the "Sale Shares") in Tomei International (BVI) Limited ("Tomei BVI"), being the entire issued share capital of Tomei BVI. Tomei BVI, a company incorporated in the British Virgin Islands with limited liability, is a wholly owned subsidiary of Toyo. Consideration The consideration for the Sale Shares is HK$181,429,000 (the "Sale Price"), which was agreed upon after arm's length negotiation between Toyo and Tomei Technologies. Tomei Technologies shall pay the Sale Price in cash to Toyo at completion of the Agreement (the "Completion"). Condition of the Agreement Completion is conditional upon the obtaining of the approval from the independent shareholders of Toyo and all other necessary approvals as required by The Rules governing the Listing of Securities (the "Listing Rule") on The Stock Exchange of Hong Kong Limited (the "Stock Exchange") on or before 23rd July, 2000 or such later date as may be agreed between Toyo and Tomei Technologies (the "Condition"). Completion Completion will take place on the next business day following the satisfaction of the Condition. INFORMATION ON TOYO Toyo and its subsidiaries (the "Toyo Group") are principally engaged in the design, manufacture and sale of popular priced consumer audio and video products, components and other consumer products. The Toyo Group has recently divested its business into the field of internet business-to-business commerce by the acquisition of the entire shareholding interest of Asia eMarket Limited which beneficially owns 50% shareholding interest of Bizipoint.com Limited, the principal business of which is the operation of Bizipoint.com, a vertical business-to-business trade and business application portal in the computer and electronics industry. INFORMATION ON GRANDE Tomei Technologies is a wholly owned subsidiary of Grande. Grande and its subsidiaries are principally engaged in the design, development, manufacture and distribution of computer peripheral, consumer electronic products and high-end consumer audio products. Grande is a controlling shareholder of Toyo with approximately 50.11% shareholding interest of Toyo. INFORMATION ON TOMEI BVI Tomei BVI is a wholly owned subsidiary of Toyo. Tomei BVI and its subsidiaries (the "Tomei BVI Group") are principally engaged in the manufacturing and trading of electronic products and components, and the trading of plastic materials. The unaudited draft consolidated net asset value and net profit of Tomei BVI for the year ended 31st December, 1999 were approximately HK$72.88 million and HK$15.24 million respectively. The Sale Price represents approximately 2.5 times the unaudited draft consolidated net asset value as at 31st December, 1999 and approximately 11.9 times the unaudited draft consolidated net profit for the year ended 31st December, 1999. REASONS AND BENEFITS FOR THE SALE AND PURCHASE The acquisition of the Tomei BVI Group by Tomei Technologies will further enhance the ability of Grande to allocate its manufacturing resources and facilities more efficiently and to provide better services to the customers of Grande. The disposal of the Tomei BVI Group by Toyo will generate additional funds for the Toyo Group to improve and strengthen its working capital position. The Sale Price was determined after arm's length negotiation between Toyo and Tomei Technologies, and was based on the net assets value of Tomei BVI plus a reasonable premium. The directors of Toyo consider the terms of the Agreement as fair and reasonable based on the net assets value of Tomei BVI and the premium received from the disposition. USE OF PROCEEDS OF TOYO The net proceeds to be received by Toyo upon Completion will be used as general working capital for the Toyo Group. GENERAL Grande, being the controlling shareholder of Toyo, beneficially owns approximately 50.11% of the shareholding interest of Toyo. The Agreement constitutes a connected transaction for Toyo under the Listing Rules, and is required under the Listing Rules to be conditional upon the approval of the independent shareholders of Toyo in the special general meeting (the "SGM") to be convened by Toyo. A Circular containing further details of the Agreement and a notice to convene the SGM to approve the acquisition of the entire issued share capital of Temei BVI will be despatched to the shareholders of Toyo as soon as practicable. An independent financial adviser will be appointed to advise the independent board committee of Toyo in relation to the Agreement. As the transaction contemplated under the Agreement is a transaction between Tomei Technologies, Grande's wholly owned subsidiary, and Toyo, Grande's non-wholly owned subsidiary, the Agreement constitutes a connected transaction for Grande under the Listing Rules. However, insofar as the directors of Grande are aware, none of the substantial shareholders has any interest in Toyo otherwise than indirect interest in Toyo through Grande. Barrican Investments Corporation ("Barrican"), a controlling shareholder of Grande with approximately 70.8% shareholding interest as at the date of this announcement, has expressed that it will vote in favour of the acquisition of the entire issued share capital of Tomei BVI. Barrican will submit to the Stock Exchange a written confirmation that it will vote in favour of the acquisition if a shareholders' meeting were to be held. Grande will apply to the Stock Exchange for a waiver under rule 14.10 of the Listing Rules to convene a shareholders' meeting to approve the acquisition by Tomei Technologies as described in this announcement. A Circular containing further details of the Agreement will be despatched to the shareholders of Grande as soon as practicable. An independent financial adviser will be appointed to advise the independent board committee of Grande in relation to the Agreement. By order of the Board By order of the Board The Grande Holdings Limited Toyo Holdings Limited Christopher W. Ho Christopher W. Ho President and Group Chief Executive Executive Chairman Hong Kong, 3rd April, 2000