Hang Lung Group Limited — M&A Activity 2008

Mar 25, 2008

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.

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PCCW Limited

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(Incorporated in Hong Kong with limited liability)

(Stock Code: 0008)

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PACIFIC CENTURY PREMIUM DEVELOPMENTS LIMITED

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(Incorporated in Bermuda with limited liability) (Stock Code: 0432)

PICVILLE INVESTMENTS LIMITED

(Incorporated in the British Virgin Islands with limited liability)

JOINT ANNOUNCEMENT

(1) PROPOSED PRIVATISATION OF PACIFIC CENTURY PREMIUM DEVELOPMENTS LIMITED BY

PICVILLE INVESTMENTS LIMITED BY WAY OF A SCHEME OF ARRANGEMENT (UNDER SECTION 99 OF THE COMPANIES ACT OF BERMUDA), AT THE OFFER PRICE OF HK$2.85 PER SCHEME SHARE

(2) DISCLOSEABLE TRANSACTION FOR PCCW LIMITED

(3) DESPATCH OF SCHEME DOCUMENT AND LETTER TO OPTIONHOLDER

(4) DESPATCH OF DISCLOSEABLE TRANSACTION CIRCULAR BY PCCW LIMITED

Sole Financial Adviser to PCCW Limited and Picville Investments Limited

Independent Financial Adviser to the Independent Board Committee of Pacific Century Premium Developments Limited

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The Scheme Document and a letter from the Offeror to the Optionholder in relation to cancellation of Options, conditional upon the Scheme becoming effective, will be despatched to the Shareholders and the Optionholder, respectively on Tuesday, 25 March, 2008.

The respective notices of the Court Meeting and the SGM to be held on Thursday, 17 April, 2008 are set out in the Scheme Document.

Independent Shareholders should consider carefully the recommendation of the Independent Board Committee and the factors, reasons and recommendation in relation to the Proposal as set out in the letter from Rothschild, the independent financial adviser to the Independent Board Committee, before making a decision on the Proposal.

Having considered the principal factors and reasons as set out in the letter from Rothschild contained in the Scheme Document, and as of the date of the Scheme Document, Rothschild considers the terms of the Proposal to be fair and reasonable so far as the Independent Shareholders are concerned and advises the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the resolution to approve the Scheme at the Court Meeting and the special resolution to approve and give effect to the Scheme at the SGM.

Shareholders and potential investors are reminded that the Proposal is subject to a number of conditions being fulfilled or waived, as applicable, and therefore may or may not become effective. Subject to all the conditions of the Proposal being fulfilled or waived, as applicable, the Scheme is expected to become effective on Friday, 9 May, 2008. Details of these conditions are set out in the Scheme Document. The Scheme will lapse if it does not become effective on or before Sunday, 31 August, 2008. Shareholders will be notified accordingly by announcement(s).

PCCW will despatch its discloseable transaction circular in relation to the Proposal, pursuant to Rule 14.38 of the Listing Rules, to shareholders of PCCW on Tuesday, 25 March, 2008.

INTRODUCTION

Reference is made to the joint announcements of PCCW, the Offeror and PCPD on 13 February, 2008 (the “13 February Announcement”) and 4 March, 2008 and the announcement of PCPD on 21 February, 2008. Terms defined in the 13 February Announcement have the same meanings when used in this announcement, unless otherwise defined herein.

DESPATCH OF THE SCHEME DOCUMENT AND LETTER TO OPTIONHOLDER

The Scheme Document and a letter from the Offeror to the Optionholder in relation to cancellation of Options, conditional upon the Scheme becoming effective, will be despatched to the Shareholders and the Optionholder, respectively on Tuesday, 25 March, 2008.

The Scheme Document contains, among other things, further details about the proposal for the privatisation of PCPD by the Offeror by way of the Scheme, including an offer for the Options (the “Proposal”) and the Scheme, the expected timetable, the explanatory statement required under Section 100 of the Companies Act, information regarding the PCPD Group, the letter from the Independent Board Committee, the letter from N M Rothschild & Sons (Hong Kong) Limited (“Rothschild”), the independent financial adviser to the Independent Board Committee, a notice of the Court Meeting and a notice of the SGM.

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RECOMMENDATION OF THE INDEPENDENT BOARD COMMITTEE AND ROTHSCHILD

As announced in PCPD's announcement dated 21 February, 2008, the Independent Board Committee comprising the four independent non-executive directors of PCPD, namely Mr Cheung Kin Piu, Valiant, Mr Tsang Link Carl, Brian, Prof Wong Yue Chim, Richard, SBS, JP and Dr Allan Zeman, GBS, JP , was established to advise the Independent Shareholders in respect of the Proposal and Rothschild has been appointed as the independent financial adviser to advise the Independent Board Committee in respect of the Proposal. The Scheme Document contains, among other things, a letter from Rothschild giving its advice and recommendation to the Independent Board Committee on the Proposal.

Independent Shareholders should consider carefully the recommendation of the Independent Board Committee and the principal factors, reasons and recommendation in relation to the Proposal as set out in the letter from Rothschild contained in the Scheme Document before making a decision on the Proposal.

Having considered the principal factors and reasons set out in the letter from Rothschild contained in the Scheme Document, and as of the date of the Scheme Document, Rothschild considers the terms of the Scheme to be fair and reasonable so far as the Independent Shareholders are concerned and advises the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the resolution to approve the Scheme at the Court Meeting and the special resolution to approve and give effect to the Scheme at the SGM. Having considered the terms of the Proposal and the advice from Rothschild, as of the date of the Scheme Document, the Independent Board Committee considers that the terms of the Proposal are fair and reasonable so far as the Independent Shareholders are concerned and recommends the Independent Shareholders to vote in favour of the resolution to approve the Scheme at the Court Meeting and in favour of the special resolution to approve and give effect to the Scheme at the SGM.

MEETINGS

The Court Meeting and the SGM will be held at 10:00 a.m. and 10:30 a.m. (or as soon thereafter as the Court Meeting shall have been concluded or adjourned), respectively, on Thursday, 17 April, 2008 in the Conference Room, 14th Floor, PCCW Tower, TaiKoo Place, 979 King's Road, Quarry Bay, Hong Kong. Notices of the Court Meeting and the SGM are set out in the Scheme Document. For the purpose of the Court Meeting and the SGM, dealings in the Shares are expected to be suspended from 9:30 a.m. on Thursday, 17 April, 2008, pending the release of the results of the Court Meeting and the SGM. Dealings in the Shares are expected to resume at 9:30 a.m. on Friday, 18 April, 2008, following the announcement of the results of the Court Meeting and the SGM. Mr Chung Cho Yee, Mico, the Optionholder, has undertaken to the Offeror and PCPD not to exercise any of the Options prior to the Proposal either becoming effective or lapsing and, accordingly, will not be eligible to vote on the Proposal as an Independent Shareholder at the Court Meeting. PCCW-HKT Partners Limited, an indirect wholly-owned subsidiary of PCCW and a person deemed to be acting in concert with the Offeror for the purposes of the Takeovers Code, is the holder of the Note. The Note is convertible into an aggregate of 672,222,222 new Shares at a conversion price of HK$3.60 per Share. PCCW-HKT Partners Limited has confirmed to PCCW, the Offeror and PCPD that PCCW-HKT Partners Limited will not exercise any of the conversion rights conferred by the Note, and will not transfer the Note or any part thereof, in each case, prior to the Proposal either becoming effective or lapsing. Accordingly, PCCW-HKT Partners Limited will not be eligible to vote on the Proposal as an Independent Shareholder in the Court Meeting.

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A further announcement will be made in relation to, inter alia, the voting results of the Court Meeting and the SGM.

CLOSURE OF REGISTER OF MEMBERS OF PCPD

For the purpose of determining the entitlements of Independent Shareholders to attend and vote at the Court Meeting and the Shareholders to attend and vote at the SGM, the register of members of PCPD will be closed from Tuesday, 15 April, 2008 to Thursday, 17 April, 2008 (both days inclusive). During such period no transfer of Shares will be effected. In order to qualify to vote at the Court Meeting and the SGM, all transfers accompanied by the relevant share certificates must be lodged with the branch share registrar of PCPD in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong by not later than 4:30 p.m. on Monday, 14 April, 2008.

Provided that the Proposal is approved, the last day for dealing in the Shares will be Monday, 28 April, 2008. To qualify for entitlements under the Scheme, all transfers accompanied by the relevant share certificates must be lodged with Computershare Hong Kong Investor Services Limited by not later than 4:30 p.m. on Tuesday, 6 May, 2008.

CONDITIONS OF THE PROPOSAL

Shareholders and potential investors are reminded that the Proposal is subject to a number of conditions being fulfilled or waived, as applicable, and therefore may or may not become effective. Subject to all the conditions of the Proposal being fulfilled or waived, as applicable, the Scheme is expected to become effective on Friday, 9 May, 2008. Details of these conditions are set out in the explanatory statement contained in the Scheme Document. The Scheme will lapse if it does not become effective on or before Sunday, 31 August, 2008. Shareholders will be notified accordingly by announcement(s).

The directors of PCPD intend that the listing of the Shares on the Stock Exchange will be withdrawn if the Scheme is implemented and be maintained in the event that the Scheme is not approved or if it lapses.

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EXPECTED TIMETABLE

Hong Kong time (unless otherwise stated)

Latest time for lodging transfers of Shares to qualify for attending and voting at the Court Meeting and the SGM………………………………….4:30 p.m. on Monday, 14 April, 2008 Register of members of PCPD closed for determination of entitlements of Scheme Shareholders to attend Tuesday, 15 April, 2008 to and vote at the Court Meeting and of Shareholders Thursday, 17 April, 2008 to attend and vote at the SGM…………………………………………...(both days inclusive) Latest time for lodging forms of proxy in respect of the Court Meeting (Note 1) ………………………..10:00 a.m. on Tuesday, 15 April, 2008 Latest time for lodging forms of proxy in respect of the SGM (Note 1) …………………………….........10:30 a.m. on Tuesday, 15 April, 2008 Suspension of dealing in the Shares................................9:30 a.m. on Thursday, 17 April, 2008 Court Meeting (Note 1) ……………………………….10:00 a.m. on Thursday, 17 April, 2008 SGM (Note 1) …………………………………………10:30 a.m. on Thursday, 17 April, 2008 Announcement of the results of the Court Meeting no later than 7:00 p.m. on and the SGM………………………………………………………..Thursday, 17 April, 2008 Resumption of dealing in the Shares……………………...9:30 a.m. on Friday, 18 April, 2008 Latest time for dealing in the Shares……………………4:00 p.m. on Monday, 28 April, 2008 Latest time for lodging transfers of the Shares to qualify for entitlements under the Scheme………........4:30 p.m. on Tuesday, 6 May, 2008 Court hearing of the petition to sanction the Scheme (Note 2 and Note 3) …………………………..……...........……………..Friday, 9 May, 2008 Record Date…………………………………………….........……………Friday, 9 May, 2008 Effective Date (Note 3) …………………………….……...…...………….Friday, 9 May, 2008 Public holiday in Hong Kong………………………………..…...…….Monday, 12 May, 2008 Announcement of (i) the result of the Court hearing of the petition to sanction the Scheme, (ii) the Effective Date and no later than 9:00 a.m. on (iii) the withdrawal of the listing of the Shares………………........…Tuesday, 13 May, 2008 Withdrawal of the listing of the Shares on the Stock Exchange becomes effective………………………9:30 a.m. on Tuesday, 13 May, 2008

Cheques for cash entitlements under the Scheme to be despatched…………………………………………..on or before Monday, 19 May, 2008

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Shareholders should note that the above timetable is subject to change. Further announcement(s) will be made in the event that there is any change.

Notes:

1. Forms of proxy should be lodged, by hand or by post, with Computershare Hong Kong Investor Services Limited, the branch share registrar of PCPD, at Rooms 1806-1807, 18th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, as soon as possible and in any event no later than the times and dates stated above. In the case of the pink form of proxy in respect of the Court Meeting, it may be returned by facsimile at number (852) 2989 6268 (marked for the attention of the “Company Secretary”) or it may be handed to the chairman of the Court Meeting at the Court Meeting if it is not so lodged. In order to be valid, the pink form of proxy for the Court Meeting and the white form of proxy for the SGM must be lodged not later than the times and dates stated above. Completion and return of a form of proxy for the Court Meeting or the SGM will not preclude a Shareholder from attending the relevant meetings and voting in person. In such event, the returned form of proxy will be deemed to have been revoked.

2. All references in this announcement to times and dates are references to Hong Kong times and dates, other than the expected dates of the Court hearing of the petition to sanction the Scheme and the Effective Date, which are the relevant dates in Bermuda. Bermuda time is 11 hours behind Hong Kong time.

3. The Scheme shall become effective upon all the Conditions being fulfilled and/or otherwise waived (as the case may be).

PCCW'S DISCLOSEABLE TRANSACTION CIRCULAR

The Proposal, if effected, constitutes a discloseable transaction for PCCW under the Listing Rules. PCCW will despatch its discloseable transaction circular in relation to the Proposal, pursuant to Rule 14.38 of the Listing Rules, to shareholders of PCCW on Tuesday, 25 March, 2008.

GENERAL

The Scheme Document (in both English and Chinese versions) will be available on PCCW's website (www.pccw.com) and on PCPD's website (www.pcpd.com) from Tuesday, 25 March, 2008.

PCCW's discloseable transaction circular will also be available (in both English and Chinese versions) on PCCW's website from that date.

By Order of the board of By Order of the board of PCCW Limited Pacific Century Premium Philana WY Poon Developments Limited Group General Counsel and Chan Ya Lai, Alice Company Secretary Company Secretary

By Order of the board of Picville Investments Limited Hui Hon Hing, Susanna Director

Hong Kong, 20 March, 2008

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As at the date of this announcement, the directors of PCCW are as follows:

Executive Directors:

Li Tzar Kai, Richard (Chairman); Alexander Anthony Arena (Group Managing Director); Peter Anthony Allen; Chung Cho Yee, Mico; Lee Chi Hong, Robert

Non-Executive Directors:

Sir David Ford, KBE, LVO ; Zhang Chunjiang; Zuo Xunsheng (Deputy Chairman); Li Fushen

Independent Non-Executive Directors:

Prof Chang Hsin-kang; Dr The Hon Sir Li Kwok Po, David, GBM, GBS, OBE, JP ; Sir Roger Lobo, CBE, LLD, JP ; Aman Mehta; The Hon Raymond George Hardenbergh Seitz

As at the date of this announcement, the directors of PCPD are as follows:

Executive Directors:

Li Tzar Kai, Richard (Chairman); Alexander Anthony Arena (Deputy Chairman); Lee Chi Hong, Robert (Chief Executive Officer); Lam Yu Yee; James Chan and Gan Kim See, Wendy

Independent Non-Executive Directors:

Cheung Kin Piu, Valiant; Tsang Link Carl, Brian; Prof Wong Yue Chim, Richard, SBS, JP and Dr Allan Zeman, GBS, JP

As at the date of this announcement, the directors of the Offeror are Alexander Anthony Arena and Hui Hon Hing, Susanna.

The directors of PCCW jointly and severally accept full responsibility for the accuracy of the information contained in this announcement (other than that relating to the PCPD Group) and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions (other than those relating to the PCPD Group) 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.

The directors of PCPD jointly and severally accept full responsibility for the accuracy of the information contained in this announcement (other than that relating to the PCCW Group) and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions (other than those relating to the PCCW Group) 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.

The directors of the Offeror jointly and severally accept full responsibility for the accuracy of the information contained in this announcement (other than that relating to the PCPD Group) and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions (other than those relating to the PCPD Group) 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.

* For identification only

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