Hang Lung Group Limited — M&A Activity 2006

Jun 20, 2006

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.

PCCW Limited

電訊盈科有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 0008)

ANNOUNCEMENT

The Company wishes to announce that it received a non binding expression of interest on 16 June 2006 from an independent third party in relation to a possible acquisition of substantially all the telecommunications and media related assets of the Company.

At the request of the Company, trading in the shares of the Company on the Stock Exchange was suspended with effect from 9:30 a.m. on 19 June 2006 pending the release of this announcement. Application has been made by the Company to the Stock Exchange for resumption of trading in the shares in the Company with effect from 9:30 a.m. on 20 June 2006.

PCCW Limited (the "Company") wishes to announce that it received a non binding expression of interest on 16 June 2006 from an independent third party, in relation to a possible acquisition of substantially all the telecommunications and media related assets of the Company (the "Proposed Transaction").

The Company is in the process of evaluating the merits of the Proposed Transaction and believes it is in the best interests of the Company and its shareholders as a whole to continue discussions in relation to the Proposed Transaction with the independent third party.

The possible transaction which has been proposed is an acquisition of the Company's telecommunications and media related assets by way of an acquisition of assets and shares in certain subsidiaries of the Company. The Proposed Transaction would not involve the acquisition of shares in the Company. Lehman Brothers Asia Limited has been appointed as financial adviser to the Company in relation to the Proposed Transaction.

At this stage, there is no certainty that such discussions (which are necessarily confidential) will or will not result in a transaction by or involving the Company and/or any of its subsidiaries. Further announcements will be made by the Company in relation to the progress of the discussions, as and when appropriate.

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The Company and its subsidiaries are principally engaged in the provision of local, mobile and international telecommunications services, internet and interactive multimedia services, the sale and rental of telecommunications equipment, and the provision of computer, engineering and other technical services, mainly in Hong Kong; investment in, and development of, systems integration and technology-related businesses; and investment in, and development of, infrastructure and properties in Hong Kong and in the People's Republic of China.

In the meantime, shareholders of the Company are advised to exercise caution when dealing in the shares of the Company.

At the request of the Company, trading in the shares on The Stock Exchange of Hong Kong Limited (the "Stock Exchange") was suspended with effect from 9:30 a.m. on 19 June 2006 pending the release of this announcement. Application has been made by the Company to the Stock Exchange for resumption of trading in the shares of the Company with effect from 9:30 a.m. on 20 June 2006.

By the Order of the Board PCCW Limited Hubert Chak Company Secretary

Hong Kong, 19 June 2006

The directors of the Company as at the date of this announcement are as follows:

Executive Directors: Li Tzar Kai, Richard (Chairman); So Chak Kwong, Jack (Deputy Chairman and Group Managing Director); Peter Anthony Allen; Alexander Anthony Arena; Chung Cho Yee, Mico; Lee Chi Hong, Robert; Dr Fan Xingcha

Non-Executive Directors: Sir David Ford, KBE, LVO; Zhang Chunjiang; Dr Tian Suning (Deputy Chairman)

Independent Non-Executive Directors: Prof Chang Hsin-kang; Dr Fung Kwok King, Victor; Dr The Hon Sir Li Kwok Po, David, GBS, OBE, JP; Sir Roger Lobo, CBE, LLD, JP; Aman Mehta; The Hon Raymond George Hardenbergh Seitz

The directors of the Company jointly and severally accept full responsibility for the accuracy of the information contained in this announcement and confirm having made all reasonable inquiries that, to the best of their knowledge, the 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.

Please also refer to the published version of this announcement in The Standard.

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