JD Logistics, Inc. — M&A Activity 2000

Feb 3, 2000

Listed Company Information

MIDAS PRINTING<1172>-Announcement & Resumption of Trading The Stock Exchange of Hong Kong Limited (the `Stock Exchange') 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. MIDAS PRINTING GROUP LIMITED (Incorporated in the Cayman Islands with limited liability) (the `Company') SALE OF 33.77% OF THE SHARES OF THE COMPANY SUMMARY The Company was informed by its controlling shareholder, ERI Holdings Limited that a sale and purchase agreement was entered into on 30th January, 2000 between ERI Holdings Limited, Mr. C.K. Lau, Gold Throne Finance Limited and Moscow Profits Limited whereby ERI Holdings Limited agreed to sell and Gold Throne Finance Limited and Moscow Profits Limited agreed to purchase 80,000,000 shares of HK$0.10 each representing 33.77% in the Company for an aggregate consideration of HK$70,400,000 (equivalent to HK$0.88 per share), subject to adjustments. Completion of the Agreement is subject to the satisfaction the conditions set out below including the Executive confirming in writing that the Purchasers (and all parties acting in connection with them) will not be required to make a general offer under Rule 26.1 of the Code. The Purchasers have indicated to the Company that they will be submitting an application to the Executive for the confirmation shortly and that they will not complete the Agreement unless the confirmation in writing is obtained or the Purchasers are otherwise satisfied that they (and parties acting in concert with them) are not required to make any general offer under Rule 26.1 of the Code in connection with the Agreement. The Executive may or may not issue such confirmation. If any of the conditions (which have not previously been waived by the parties) have not been fulfilled on or before 5 pm on 8th March, 2000, then the Agreement will terminate. Upon completion, the interest of ERI and parties acting in concert with it will decrease to 9.6%. Application will be made for resumption of trading of the Company's shares with effect from 3rd February, 2000. Investors should exercise extreme caution in dealing in the Company's shares. The Agreement Date of agreement: 30th January, 2000 Parties: ERI Holdings Limited (`ERI') as vendor Gold Throne Finance Limited (`Purchaser 1') and Moscow Profits Limited (`Purchaser 2') as purchasers Purchaser 1 is a sole purpose investment vehicle, wholly-owned subsidiary of Chuang's China Investments Limited (`Chuang China'), a company the shares of which are listed on the Stock Exchange of Hong Kong Limited (`Stock Exchange') and Purchaser 2 is a sole purpose investment vehicle owned by Mr. Alan Chuang Shaw Swee (`Mr Chuang') as to 66% and owned by Ms. Alice Siu Chuang Siu Suen (`Ms. Chuang') as to 34%. The Purchasers are both independent third parties not connected to the directors, chief executives or substantial shareholders of the Company and its subsidiaries or an associate (as defined in the Rules Governing the Listing of Securities on the Stock Exchange (`Listing Rules')) of any of them. Ms Chuang and Mr Chuang are the controlling shareholders of Chuang's Consortium International Limited, the holding company of Chuang's China and the shares of which are also listed on the Stock Exchange. Other parties: Mr. C.K. Lau (`Mr. Lau'), a director of the Company and holder of 58% of ERI. The remaining 42% of ERI is held by Wan Siu Kau as to 12%, Martin Yue-Nien Tang as to 4.9% and by independent third parties not connected with the directors, chief executive or substantial shareholder of the Company and its subsidiaries or any associate (as defined in the Listing Rules) as to the remaining 25.1% of any of them. Shares to be sold: 80,000,000 shares of the Company (`Sale Shares'), representing 33.77% of the issued share capital of the Company to be purchased as to 60,000,000 Sale Shares by Purchaser 1 and 20,000,000 Sale Shares by Purchaser 2. Payment Terms: The purchase price of HK$70,400,000 (`Sale Price') equivalent to HK$0.88 per share is payable as follows:- (a) HK$7,000,000 as a deposit to be held by the Purchasers' solicitors in escrow on signing; and (b) the balance on completion. Conditions: Completion of the Agreement is conditional upon the satisfaction of the following conditions on or before 8th March, 2000 (or such other date as the parties may agree in writing):- (a) the obtaining of all consents and approvals of any relevant governmental authorities in Hong Kong, the Cayman Islands, the People's Republic of China or elsewhere as may reasonably be considered necessary by the Purchasers for the validity, enforceability or the execution and implementation of this Agreement; (b) the receipt by the Group of all relevant waivers from financial institutions as may be necessary for the purpose of the Agreement and the transactions contemplated therein such that completion of the agreement will not trigger events of default or breach of any terms of financing agreements covering bank loans of not less than HK$80 million of the Group; (c) a disclosure letter having been delivered to the Purchasers not less than one business day prior to completion date in a form reasonably satisfactory to the Purchaser; (d) the Shares remaining listed on the Stock Exchange at all times after the date hereof and prior to and on the completion date save and except for a suspension of not more than seven consecutive business days; (e) no indication being received on or before Completion and not being withdrawn within 5 business days, from the Securities and Futures Commission or the Stock Exchange to the effect that the listing of the Shares on the Stock Exchange may be withdrawn or objected to (or unusual and onerous conditions may be attached thereto) as a result of Completion or in connection with the terms of this Agreement; (f) the Executive having confirmed in writing that the Purchasers (and all parties acting in concert with any of the Purchasers) will not be required to make any general offer under Rule 26.1 of the Hong Kong Code on Takeovers and Mergers (the `Code') in connection with this Agreement; and (g) if required by the Stock Exchange, all necessary shareholders' approval of this Agreement having been obtained by the Company and/or Chuang's China in accordance with the Listing Rules. If any of the Conditions (which have not previously been waived by the parties) have not been fulfilled on or before 5:00 p.m. on the 8th March, 2000 or such other date as the parties may agree in writing, then the Agreement shall forthwith terminate. The Purchasers have indicated to the Company that they will be submitting an application to the Executive for the confirmation referred to in Clause (f) above shortly and that they will not complete the Agreement unless the confirmation in writing is obtained or the Purchasers are otherwise satisfied that they (and parties acting in concert with them) are not required to make any general offer under Rule 26.1 of the Code in connection with the Agreement. The Executive may or may not issue such confirmation. Reasons for ERI's disposal of the Sale Shares: ERI has agreed to dispose of the Sales Shares as it believes that the Sale Price is a fair and reasonable price to realise its investment. Change in Shareholding Before Completion After Completion ERI Holdings 43.37% 9.60% Limited Gold Throne Finance 0% 25.33% Limited Moscow Profits 0% 8.44% Limited Public 56.63% 56.63% Changes: The Company does not expect that the sale of the Sale Shares to have any material effect on the Company as it is intended that Mr C. K. Lau will remain in management. Mr. C.K. Lau entered into a service agreement with the Company which is terminable on six month's notice, save and except for certain specified circumstances e.g. summary dismissal on grounds of misconduct. The Company does not expect that its business will change after completion of the sale of the Sale Shares. The Purchasers have informed the Company that they do not at present have plans for injection of assets into the Company. The Stock Exchange has stated that, if Midas Printing Group Limited remains a listed company, any future acquisitions or disposals (in particular from the Purchasers or their respective associates under the Listing Rules) by Midas Printing Group Limited and its subsidiaries (the `Group') will be subject to the provisions of the Listing Rules. Pursuant to the Listing Rules, the Stock Exchange has the discretion to require Midas Printing Group Limited to issue a circular to its shareholders where any acquisitions or disposals by the Group are proposed, irrespective of the size of such acquisitions or disposals and in particular where such acquisitions or disposals represents a departure from the principal activities of the Group. The Stock Exchange also has the power, pursuant to the Listing Rules, to aggregate a series of acquisitions or disposals by the Group and any such acquisitions or disposals may, in any event, result in the Group being treated as a new applicant for listing and subject to the requirements for new applicants as set out in the Listing Rules. Board of Directors: On completion of the Agreement, Martin Yue-Nien Tang (the non-executive chairman) and Professor Chia Wei Woo (an independent non-executive director), Ng Chun Kit, Wan Siu Kau (executive directors) will resign as directors and not more than 4 executive directors (including one of them being the new Chairman of the board of directors of the Company) will be nominated by the Purchasers to become directors of the Company. After completion of the Agreement and assuming that the Purchasers appoint 4 directors, the board will consist of 11 members with 4 directors nominated by the Purchasers (including the Chairman), 5 of the existing executive directors and two independent non-executive directors . A further announcement will be made on completion of the Agreement. Share Price Movement The Board notes the recent increases in the price of the shares of the Company on and submitted a standard 39.2 announcement to the Stock Exchange on 24th January, 2000. Subsequently, the Company was informed by ERI that negotiations for the possible sale of shares in the Company have progressed and the Company requested for suspension of trading of its shares immediately at 10:50 a.m. on 25th January, 2000. The Board wishes to state that save as referred to above it is not aware of any reasons for such increase. The Board also confirms that save as referred to above there are no negotiations or agreements relating to intended acquisitions or realisations which are discloseable under paragraph 3 of the Listing Agreement, neither is the Board aware of any matter discloseable under the general obligation imposed by paragraph 2 of the Listing Agreement, which is or may be of a price-sensitive nature. Application will be made for resumption of trading of the Company's shares with effect from 3rd February, 2000. By Order of the Board Midas Printing Group Limited Lau Chuk Kin Managing Director Hong Kong, 2nd February, 2000 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, 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.