Great Eagle Holdings Limited — M&A Activity 2001

Feb 2, 2001

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.

YAOHAN INTERNATIONAL HOLDINGS LIMITED

(incorporated in Hong Kong with limited liability) (In Liquidation)

(incorporated in Bermuda with limited liability)

Financial adviser to Tian An China Investments Company Limited

JOINT ANNOUNCEMENT

RESTRUCTURING PROPOSAL FOR

YAOHAN INTERNATIONAL HOLDINGS LIMITED

(In liquidation)

by way of a scheme of arrangement

under section 99 of the Companies Act

INVOLVING A POSSIBLE SPIN-OFF OF A SUBSIDIARY OF

TIAN AN CHINA INVESTMENTS COMPANY LIMITED

AND A POSSIBLE SECURITIES EXCHANGE OFFER WITH YAOHAN SHAREHOLDERS

On 23 January 2001, Tian An, together with its wholly owned subsidiaries, Shine Star and DSGL, entered into the Agreement with Yaohan, the Liquidators and the Bermudian Liquidators. Pursuant to the Agreement, and in consideration of the assistance provided by Yaohan, the Bermudian Liquidators and the Liquidators in facilitating a listing of the DSGL Shares on the Stock Exchange, DSGL will pay a total sum of HK$20 million to Yaohan (for the benefit of the Creditors). DSGL shall issue a number of DSGL Shares to Yaohan Shareholders in exchange for the entire issued shares of Yaohan. Such amount of DSGL Shares representing approximately 0.125 per cent. of the enlarged issued share capital of DSGL on a fully diluted basis (or such lesser percentage as may be agreed among Tian An, the Bermudian Liquidators and the Liquidators) shall be of a value of at least HK$1 million.

The Agreement, which will also involve the Scheme amongst Yaohan, the Yaohan Shareholders and the Creditors, if implemented, would result in (i) the listing of the Yaohan Shares on the Stock Exchange being withdrawn; (ii) the DSGL Shares being listed on the Stock Exchange by way of introduction subject to the approval of the SFC and the Stock Exchange; and (iii) the Yaohan Shareholders becoming minority shareholders of DSGL. The Restructuring Proposal will be submitted to the Stock Exchange as soon as practicable.

The Scheme, if implemented, will constitute a securities exchange offer under the Code and the parties will ensure compliance with all relevant requirements specified under the Code. The Agreement is subject to the conditions precedent stated below, in particular, the fulfillment of the relevant requirements of the Listing Rules regarding the possible spin-off of DSGL from Tian An and compliance with all relevant requirements specified under the Code.

Completion of the Restructuring Proposal is subject to various conditions precedent set out below and the detailed terms of the Restructuring Proposal are still under negotiation between the parties thereto. Therefore the Restructuring Proposal may or may not proceed. Investors and the Tian An Shareholders should exercise caution when dealing in the securities of Tian An.

Trading in the Yaohan Shares on the Stock Exchange has been suspended since 11 August 1998 and will remain suspended. Further announcement will be made as and when details of the Scheme, the Restructuring Proposal and the proposed spin-off of DSGL are finalised or as appropriate.

INTRODUCTION

Reference is made to the joint announcements of Tian An and Yaohan dated 22 December 2000, 10 January 2001 and 18 January 2001. Unless otherwise defined, terms used herein shall have the same meaning as in the joint announcement of Tian An and Yaohan dated 22 December 2000.

On 23 January 2001, Tian An, together with its wholly owned subsidiaries, Shine Star and DSGL, entered into the Agreement with Yaohan, the Liquidators and the Bermudian Liquidators. If completed, the Agreement will, among other things, involve a Scheme amongst Yaohan, the Yaohan Shareholders and the Creditors which, if approved, would result in (i) the listing of the Yaohan Shares on the Stock Exchange being withdrawn; (ii) the DSGL Shares being listed on the Stock Exchange by way of introduction subject to the approval of the SFC and the Stock Exchange; and (iii) the Yaohan Shareholders becoming minority shareholders of DSGL. The Scheme is required to be approved by are majority in number representing three-fourths in value of the Creditors and by a majority in number representing three-fourths in value of the Yaohan Shareholders present and voting in person or by proxy at separate Court meetings convened for the purpose of considering the Scheme, and sanctioned by the Hong Kong Court and the Bermudian Court. The professional parties are preparing the Restructuring Proposal which will be submitted to the Stock Exchange as soon as it is finalised but in any event no later than 14 March 2001.

Completion of the Restructuring Proposal is subject to various conditions precedent set out below and the detailed terms of the Restructuring Proposal are still under negotiation among the parties thereto. Therefore the Restructuring Proposal may or may not proceed. Investors and the Tian An Shareholders should exercise caution when dealing in the securities of Tian An.

THE AGREEMENT

Date of the Agreement: 23 January 2001

Parties to the Agreement: (1) Yaohan;

(2) the Liquidators;

(3) the Bermudian Liquidators;

(4) Tian An;

(5) Shine Star; and

(6) DSGL.

Tian An, Shine Star and DSGL and their respective associates are neither connected person(s) of, nor parties acting in concert with, the chief executive, directors or substantial shareholders of Yaohan and its subsidiaries and their respective associates within the meaning of the Listing Rules and the Code.

Major terms of the Agreement:

Pursuant to the Agreement, Yaohan will receive the total sum of HK$20 million from DSGL (for the benefit of the Creditors) in consideration of the assistance provided by Yaohan, the Liquidators and the Bermudian Liquidators in facilitating a listing of the DSGL Shares on the Stock Exchange pursuant to Chapter 7 of the Listing Rules. Subject to the satisfaction or waiver of the conditions precedent as stated below for the implementation of the Restructuring Proposal, Tian An shall advance or procure the advance (by way of loan, or in exchange for equity or in such other manner as Tian An shall determine) the sum of HK$20 million (less the amount of the Deposit) to DSGL for the sole purpose of DSGL making payment to Yaohan of the sum of HK$20 million which money shall be held on trust by DSGL for the sole purpose of making the said payment to Yaohan (for the benefit of the Creditors).

In addition, the Restructuring Proposal will, among other matters, involve the Scheme whereby the Yaohan Shareholders will receive the DSGL Shares in exchange for their Yaohan Shares. DSGL shall allot and issue such number of shares representing approximately 0.125 per cent. of the enlarged issued share capital of DSGL on a fully diluted basis (or such lesser percentage as may be agreed between Tian An, the Bermudian Liquidators and the Liquidators). The DSGL Shares to be issued to the Yaohan Shareholders shall be of a value of at least HK$1 million, credited as fully paid and rank pari passu in all respects with the DSGL Shares in issue and to be issued pursuant to the Placing Agreement. DSGL shall transfer all the issued shares of Yaohan to the Liquidators (or their nominees) at nominal consideration which shares shall be held on trust for the Creditors.

Both the payment of HK$20 million to Yaohan (for the benefit of the Creditors) and the number of DSGL Shares to be issued to the Yaohan Shareholders which shall be of a value of at least HK$1 million were determined on normal commercial basis after arm's length negotiation among the parties thereto. The directors of Tian An, the Bermudian Liquidators and the Liquidators (acting on behalf of Yaohan) consider that the terms of the Agreement are in the best interest of Tian An, the Tian An Shareholders, Yaohan, the Yaohan Shareholders and the Creditors respectively.

In addition to the cash consideration of HK$20 million payable on the completion of the Scheme to the Creditors, DSGL shall pay the reasonable costs and expenses incurred in connection with the implementation of the Restructuring Proposal (including the Scheme), including but without limitation: (i) the fees of the Liquidators and their legal and other advisers (excluding barristers' fees) up to a maximum aggregate amount of HK$4 million; and (ii) the fees of the barristers engaged by the Liquidators and their legal advisers up to a maximum of HK$300,000, or such other amount as may be agreed by the Liquidators, the Bermudian Liquidators and Tian An.

Conditions precedent to the Agreement:

Completion of the Restructuring Proposal (including the Scheme) is conditional upon, among other matters, the following conditions being fulfilled or waived (where appropriate) on or before 31 July 2001 or such later date as the parties to the Agreement may agree in writing:

(a) the approval of the Scheme by a majority in number representing three-fourths in value of the Creditors, and by a majority in number representing three-fourths in value of the Yaohan Shareholders, present and voting in person or by proxy at separate Court meetings convened for the purpose of considering the Scheme;

(b) the passing of an ordinary resolution of the Yaohan Shareholders, if required, approving the implementation of the Restructuring Proposal to be proposed at the special general meeting of Yaohan;

(c) the completion of the transfer of the entire issued share capital of Shine Star to DSGL and the transfer to Shine Star of the subsidiaries of Tian An which, immediately prior to the transfers, hold, directly or indirectly, Tian An's investment property interests in the PRC;

(d) written approval by the Listing Committee of the Stock Exchange of the withdrawal of the listing of the Yaohan Shares;

(e) written approval by the Listing Committee of the Stock Exchange of the granting of the listing of and permission to deal in the DSGL Shares in issue and to be issued together with any warrants as appropriate pursuant to the Restructuring Proposal and the Placing Agreement and such approval may be subject to such conditions, if any, acceptable to DSGL and, if separate, written approval by the Listing Committee of the Stock Exchange for Tian An to effect the spin-off of DSGL on conditions acceptable to Tian An;

(f) appropriate approval from the SFC relating to the Restructuring Proposal;

(g) written approval by all relevant authorities for the issue of the DSGL Shares pursuant to the Agreement and the Placing Agreement;

(h) written consents and approvals of all relevant government and regulatory authorities and any other persons for the implementation and completion of the Restructuring Proposal and the Placing Agreement including, without limitation, the written confirmation by Hong Kong Securities Clearing Company Limited that the share capital of DSGL has been accepted as eligible securities for deposit, clearance and settlement in the Central Clearing and Settlement System;

(i) the passing of an ordinary resolution of the Tian An Shareholders, if required, at an extraordinary general meeting of Tian An approving the Restructuring Proposal;

(j) the signing of the Placing Agreement;

(k) the sanction by the Bermudian Court of the Scheme;

(l) the making of the orders by the Hong Kong Court pursuant to section 182 of the Companies Ordinance and by the Bermudian Court pursuant to section 166 of the Companies Act sanctioning the transfer of the Yaohan Shares by the Yaohan Shareholders to DSGL; and

(m) the delivery of an office copy of the order sanctioning the Scheme to the registrar of companies in Bermuda.

The conditions precedent set out in paragraphs (d) and (f) above may only be waived by Tian An/DSGL and the Bermudian Liquidators and the Liquidators jointly by agreement in writing and if the approval referred to in paragraph (d) above is subject to conditions, the conditions shall, in order for the conditions precedent to be satisfied, require the approval from the Liquidators. All other conditions set out above may only be waived by Tian An and DSGL.

REORGANISATION OF DSGL

Under the Reorganisation, DSGL will acquire the entire issued share capital of Shine Star. Shine Star will acquire from Tian An the interests in Tian An's subsidiaries which, immediately prior to the transfers to Shine Star, hold directly or indirectly Tian An's property investments in the PRC (of which the total estimated market value is approximately HK$800 million which was valued by an independent property valuer in December 1999). Tian An agrees to procure the transfer of the entire issued share capital of Shine Star to DSGL on terms that the transfer of the issued share capital of Shine Star to DSGL shall become unconditional prior to the despatch of the combined prospectus and Scheme document.

Tian An will, subject to any necessary third party consents or government or regulatory approvals (including without limitation any PRC government or regulatory approvals) being obtained, procure that DSGL shall be the beneficial owner of the entire issued share capital of Shine Star. Shine Star shall be the beneficial owner of the shares in Tian An's subsidiaries which, immediately prior to the transfers, hold, directly or indirectly, Tian An's investment property interests in the PRC on or prior to the despatch of the combined prospectus and Scheme document.

Upon implementation of the Restructuring Proposal (including the Scheme) and completion of the Reorganisation and the Placing, the listing of the Yaohan Shares on the Stock Exchange will be withdrawn and the DSGL Shares will be listed on the Stock Exchange. The listing of the DSGL Shares on the Stock Exchange will result in a spin-off of Tian An's interests in those subsidiaries which are principally engaged in property investment in the PRC. The implementation of the Scheme would be subject to the approval of the Stock Exchange and would result in a change in control of Yaohan. Listing of DSGL Shares should satisfy the new listing requirements as specified under the Listing Rules. Subject to Tian An and DSGL continue to proceed with the Restructuring Proposal and the satisfaction of conditions prescribed in the section headed "Conditions Precedent to the Agreement", they will comply with all relevant requirements specified under the Code and the Listing Rules.

Tian An and the other parties to the Agreement are working on the detailed terms of the Restructuring Proposal (including the Scheme) and the investment properties in the PRC to be injected into DSGL. Further announcement will be made on any material development on this matter.

It is anticipated that the DSGL Shares will be listed on the Stock Exchange by way of introduction subject to the approval of the SFC and the Stock Exchange. Upon completion of the Scheme, Tian An will hold a majority shareholding of DSGL. DSGL and its controlling shareholder, being Tian An, will undertake to the Stock Exchange to take appropriate steps including the Placing to ensure that not less than 25 per cent. of the DSGL Shares will be held by the public at the time of their listing on the Stock Exchange in strict compliance with Rule 8.08 of the Listing Rules. Should DSGL fail to comply with the public float requirement, the Stock Exchange reserves the right not to grant the listing of the DSGL Shares on the Stock Exchange until appropriate steps have been taken to restore the minimum percentage of the DSGL Shares in public hands pursuant to Rule 8.08 (2) of the Listing Rules. Detailed terms of the Placing will be announced once they have been finalised.

INFORMATION OF TIAN AN

Tian An was incorporated in Hong Kong with limited liability and the securities of which are listed on the Stock Exchange. The principal activities of Tian An and its subsidiaries are property development, merchandise trading, provision of hotel and property management and agency services, and investment holding. After this proposed spin-off of investment properties in the PRC, the remaining assets held by Tian An will mainly consist of development properties for sale in the PRC.

INFORMATION OF YAOHAN

Yaohan was incorporated in Bermuda and became listed on the Stock Exchange in 1993. Its principal businesses included operating department stores and retail shops, catering and bakeries, food processing and trading, indoor family entertainment centres and property activities. Dealings in the Yaohan Shares on the Stock Exchange have been suspended since 11 August 1998. A winding up order was made in respect of Yaohan by the Hong Kong Court on 26 February 1999 and the Liquidators were appointed on 30 June 1999. A winding up order was made in respect of Yaohan by the Bermudian Court on 1 April 1999 and the Bermudian Liquidators were appointed on 26 August 1999. If a resumption proposal for Yaohan is not submitted to the Stock Exchange by 14 March 2001, the Stock Exchange will cancel the listing status of Yaohan. A resumption proposal will be submitted to the Stock Exchange as soon as practicable and in any event on or before 14 March 2001.

GENERAL

As at the date of this announcement, no approval has been received from the Stock Exchange in relation to the Restructuring Proposal and Tian An, DSGL, the Bermudian Liquidators and the Liquidators are in the course of providing all requisite information in relation to the Restructuring Proposal to the Stock Exchange.

Yaohan Shareholders and Tian An Shareholders should note that the Restructuring Proposal is subject to the conditions stated above, in particular, the fulfillment of the relevant requirements of the Listing Rules regarding the possible spin-off of DSGL from Tian An and compliance with the relevant provisions of the Code and therefore the release of this announcement does not in any way imply that the Restructuring Proposal will necessarily be implemented and completed. Accordingly, the Restructuring Proposal may or may not proceed.

In the interim, trading in the Yaohan Shares on the Stock Exchange will remain suspended until further notice.

As the Restructuring Proposal may or may not proceed, investors and the Tian An Shareholders should exercise caution when dealing in the securities of Tian An.

Henco Capital Limited has been retained as the financial adviser to Tian An. An independent financial adviser will be appointed to advise the Yaohan Shareholders.

Further announcement will be made as and when details of the Scheme, the Restructuring Proposal and the proposed spin-off of DSGL are finalised or as appropriate.

DEFINITIONS

"Agreement" the agreement for the implementation of a restructuring proposal dated 23 January 2001 among Tian An, Shine Star, DSGL, Yaohan, the Bermudian Liquidators and the Liquidators;

"Bermudian Court" the Supreme Court of Bermuda;

"Bermudian Liquidators" Mr. Malcolm L. Butterfield and the Liquidators, the joint and several liquidators of Yaohan appointed by the Bermudian Court;

"BVI" the British Virgin Islands;

"Code" the Hong Kong Code on Takeovers and Mergers;

"Companies Act" the Companies Act 1981 of Bermuda;

"Companies Ordinance" the Companies Ordinance (Chapter 32 of the Laws of Hong Kong);

"Completion" the completion of the Restructuring Proposal;

"Creditors" the creditors of Yaohan within the meaning of section 99 of the Companies Act;

"Deposit" the HK$2 million refundable deposit paid by Tian An to the Liquidators on 22 December 2000 pursuant to the letter of intent dated 20 December 2000, together with all interest accrued thereon;

"DSGL" Dazzling Success Group Limited, a company incorporated in the Cayman Islands with limited liability and is a wholly owned subsidiary of Tian An;

"DSGL Shares" shares of DSGL;

"HK$" Hong Kong dollars, the lawful currency of Hong Kong;

"Hong Kong" the Hong Kong Special Administrative Region of the PRC;

"Hong Kong Court" the High Court of Hong Kong;

"Liquidators" Mr. Gabriel C.K. Tam and Mr. Alan C.W. Tang, the joint and several liquidators of Yaohan appointed by the Hong Kong Court on 26 August 1999;

"Listing Rules" the Rules Governing the Listing of Securities on the Stock Exchange;

"Main Board" has the meaning ascribed thereto in the Rules Governing the Listing of Securities on the Growth Enterprise Market of the Stock Exchange;

"Placing" placing of the DSGL Shares (subject, prior to the hearing by the Bermudian Court of the petition for sanction of the Scheme, to such conditions as are customary or otherwise acceptable to the Bermudian Liquidators, the Liquidators and Tian An and thereafter subject only to the making of the order sanctioning the Scheme and the making of orders sanctioning the transfer of the Yaohan Shares pursuant to section 182 of the Companies Ordinance and section 166 of the Companies Act by the Hong Kong Court and the Bermudian Court respectively) so as to maintain that 25 per cent. of the issued share capital of DSGL will be held by the public as required by the Listing Rules;

"Placing Agreement" the legally binding agreement in respect of the Placing to be entered into by DSGL;

"PRC" the People's Republic of China;

"Reorganisation" the reorganisation such that the entire issued share capital of Shine Star will be transferred to DSGL by Tian An and the transfer to Shine Star, of Tian An's subsidiaries which, immediately prior to the transfers, hold directly or indirectly, Tian An's property investment interests in the PRC;

"Restructuring Proposal" the proposal for the reorganisation of Yaohan, including the Scheme, to be put forward to the Yaohan Shareholders and the Creditors for their approval;

"Scheme" the proposed scheme of arrangement between Yaohan, the Yaohan Shareholders and the Creditors under section 99 of the Companies Act;

"SFC" Securities and Futures Commission of Hong Kong;

"Shine Star" Shine Star Properties Limited, a company incorporated in BVI with limited liability and is a wholly owned subsidiary of Tian An;

"Stock Exchange" The Stock Exchange of Hong Kong Limited;

"Tian An" Tian An China Investments Company Limited, a company incorporated in Hong Kong with limited liability and the securities of which are listed on the Main Board of the Stock Exchange;

"Tian An Shareholders" the shareholders of Tian An;

"Yaohan" Yaohan International Holdings Limited (in liquidation), a company incorporated in Bermuda with limited liability and the shares of which are listed on the Main Board of the Stock Exchange;

"Yaohan Shareholders" the shareholders of Yaohan; and

"Yaohan Shares" shares of Yaohan.

By order of the Board For and on behalf of

Tian An China Investments Company Limited Yaohan International Holdings Limited

Edwin Lo (in liquidation)

Executive Director Gabriel C. K. Tam

Joint and Several Liquidators

Hong Kong, 1 February 2001

The directors of Tian An jointly and severally accept full responsibility for the accuracy of information contained in this announcement other than those relating to Yaohan, the Liquidators and the Bermudian Liquidators and confirm, having made all reasonable inquiries, that to the best of their knowledge and belief, opinions expressed in this announcement other than those relating to Yaohan, the Liquidators and the Bermudian Liquidators have been arrived at after due and careful consideration and that there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement other than those relating to Yaohan, the Liquidators and the Bermudian Liquidators misleading.

The Liquidators and the Bermudian Liquidators jointly and severally accept full responsibility for the accuracy of information contained in this announcement other than those relating to Tian An, Shine Star and DSGL and confirm, having made all reasonable inquiries, that to the best of their knowledge and belief, opinions expressed in this announcement other than those relating to Tian An, Shine Star and DSGL have been arrived at after due and careful consideration and that there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement other than those relating to Tian An, Shine Star and DSGL misleading.

"Please also refer to the published version of this announcement in the Hong Kong i-mail"