GoFintech Quantum Innovation Limited — M&A Activity 2000

Feb 21, 2000

Listed Company Information

PAC CHALLENGE<0166> - Announcement & Resumption of Trading 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. Pacific Challenge Holdings Limited (incorporated in Bermuda with limited liability) CHANGE OF SUBSTANTIAL SHAREHOLDERS The board of directors (the ``Board'') of Pacific Challenge Holdings Limited (the ``Company'' and with its subsidiaries, the ``Group'') announces that it has been notified by the substantial shareholders of the Company, Roseville Management Limited, Roseville Investments Services Limited and Roseville Consultant Limited (collectively the ``Vendors'') that they signed an agreement (the ``Agreement'') with E1 Media Technology Limited (the ``Purchaser'') on 18 February, 2000 pursuant to which Roseville Management Limited, Roseville Investments Services Limited and Roseville Consultant Limited, agreed to sell 35,840,000, 18,054,000 and 14,040,000 issued shares (collectively the ``Sale Shares'') of the Company respectively, represent\ing approximately 15%, 8% and 6% of the issued share capital of the Company (the ``Shares''), for an aggregate cash consideration of HK$189,593,300. Trading in the Shares was suspended at the request of the Company with effect from 10:00 a.m. on Tuesday, 15 February, 2000 pending the release of this announcement. The Company has applied to The Stock Exchange of Hong Kong Limited (the ``Stock Exchange'') for the resumption of trading of the Shares with effect from 10:00 a.m. on Monday, 21 February 2000. On 15 February, 2000, various shareholders of the Company have started the negotiation with Midland Realty (Holdings) Limited in relation to the acquisition of collectively less than 35% of the issued share capital of the Company. The negotiation subsequently ceased on 18 February, 2000 and the Agreement was entered into between the Purchaser and the Vendors on the same day. Date of Agreement: 18 February, 2000 Parties Vendors: Roseville Management Limited, Roseville Investments Services Limited and Roseville Consultant Limited Purchaser: E1 Media Technology Limited, 2.5% interest of which is owned by the Company and the balance is owned by independent third parties not connected with (as defined in the Listing Rules) the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or an associate (as defined in the Listing Rules) of any of them, a company incorporated in Hong Kong with limited liability Yu Shin Gay, Joseph (``Mr. Yu''), a director of the Company, is the beneficial owner of Roseville Management Limited. Lui Yee Man, Brenda (``Ms. Lui''), a director of the Company, is the beneficial owner of Roseville Investments Services Limited and is also the owner of the only voting share of Roseville Consultant Limited. Upon completion of the Agreement (``Completion''), Mr. Yu and Ms. Lui will cease to be the substantial shareholders of the Company. Mr. Yu will hold 3,210,000 Shares (which represents 1.34% of the issued Shares) upon Completion. Ms. Lui will not hold any Shares upon Completion. Consideration: The aggregate cash consideration for the sale of the Shares (at the same price for every Sale Share) is HK$189,593,300, representing approximately HK$2.79 per share. Completion: Completion is expected to take place at 11:00 a.m. on the later of (i) the third Business Day after the conditions set out in the section headed ``Conditions precedent'' below having been fulfilled or waived or (ii) 22 March, 2000 (or such other date as the parties to the Agreement may agree in writing). Conditions precedent Completion is conditional upon: (a) The Stock Exchange confirming that the written approval of the Stock Exchange under rule 317 of the Rules of the Stock Exchange is not required or is granted, and the Hong Kong Futures Exchange Limited (the ``Future Exchange'') confirming that the written approval of the board of directors of the Futures Exchange under rule 507(b) of the Rules of the Futures Exchange is not required or is granted, in each case, as a result of the transfer of the Sale Shares contemplated under the Agreement or, that the Stock Exchange or (as the case may be) the Futures Exchange has no objection to such transfer; (b) none of Mr. Yu, Ms. Lui and Loh Jiah Yee, Katherine, a director of one of the members of the Group, tendering resignation whether as director or employee of any members of the Group (other than the Company) on or before Completion; (c) no notice being received by any member of the Group or the Purchaser that the registration or memberships of any members of the Group will be suspended, revoked or withdrawn as a result of Completion on or before Completion; and (d) no notice being received by the Company or the Purchaser that the listing of the shares of the Company on the Stock Exchange will or may be revoked or suspended indefinitely and the trading in the Shares not being suspended for more than ten consecutive trading days (other than as a result of clearance of any announcement relating to the Agreement) after such clearance. Change of directors: Upon Completion, three new directors nominated by the Purchaser, out of the three directors of the Board, will be appointed to the Company, one of whom will be the chairman of the Board, and Mr. Yu, Ms. Lui and Mr. Hui Chung Yee, Richard, a director and a shareholder of the Company, will resign as directors of the Company. As at the date of the announcement, the three new directors to be appointed have not yet been identified. Further annoncement will be made upon the appointment of the directors. Future plans of the Company: The change in the substantial shareholders of the Company is not expected to have any negative impact on the Company or any of its operating subsidiaries, for the following reasons: (a) both Mr. Yu and Ms. Lui will remain as chief executive and managing director respectively for all the operating subsidiaries within the Group; (b) the Purchaser will hold 30% of the Company following Completion. The Company is already controlling approximately 2.5% of the voting rights of the Purchaser, which invests in and develops start-up Internet, multimedia and e-commerce related ventures. The Purchaser has no concrete plan to inject asset into the Company after Completion. No such assets has been identified to date. Furthermore, the Purchaser currently has no plan to acquire further interest in the Company after Completion; and (c) looking to the future, the Company intends to increase its emphasis on fee-based income, versus traditional brokerage activities, which are expected to face reduced commission levels in coming years. The Company's link with the Purchaser is expected to facilitate an increased focus on Internet business. Shareholder structure and controlling Shareholder The Purchaser will become the single largest shareholder upon Completion. The following table illustrates the distribution of shareholding before and immediately upon completion: Shareholding Before Completion Immediately upon Completion % % Mr. Yu 16.3% 1.34% Ms. Lui 13.4% 0% Purchaser 0% 30% Other shareholders of the Company 70.3% 68.66% Total 100% 100% Resumption of Trading At the request of the Company, trading in the Shares on the Stock Exchange was suspended with effect from 10:00 a.m. on Tuesday, 15 February, 2000 pending release of this announcement. The Company has applied to the Stock Exchange for the resumption of trading in the Shares with effect from 10:00 a.m. on Monday, 21 February, 2000. By order of the Board Pacific Challenge Holdings Limited Yu Shin Gay, Joseph Chairman Hong Kong, 19 February, 2000 * For identification purposes only The directors of Pacific Challenge Holdings Limited jointly and severally accept full responsibility for the accuracy of the information contained in this announcement and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement misleading.