Legendary Education Group Ltd. — M&A Activity 2016

Sep 12, 2016

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of WLS nor shall there be any sale, purchase or subscription for securities of WLS in any jurisdiction in which such offer, solicitation or sale would be unlawful absent the filing of a registration statement or the availability of an applicable exemption from registration or other waiver. This announcement is not for release, publication or distribution in or into any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction.

Favourite Number Limited

(Incorporated in the British Virgin Islands with limited liability)

WLS Holdings Limited 滙隆控股有限公司[*]

(Incorporated in the Cayman Islands and continued in Bermuda with limited liability)

(Stock Code: 8021)

JOINT SUPPLEMENTAL ANNOUNCEMENT

(1) PRE-CONDITIONAL VOLUNTARY CONDITIONAL SECURITIES EXCHANGE AND CASH OFFERS BY VBG CAPITAL LIMITED ON BEHALF OF FAVOURITE NUMBER LIMITED TO ACQUIRE ALL THE ISSUED SHARES OF L&A INTERNATIONAL HOLDINGS LIMITED (OTHER THAN THOSE ALREADY OWNED BY FAVOURITE NUMBER LIMITED AND PARTIES ACTING IN CONCERT WITH IT) AND TO CANCEL ALL OUTSTANDING OPTIONS OF L&A INTERNATIONAL HOLDINGS LIMITED; AND (2) VERY SUBSTANTIAL ACQUISITION OF WLS

Financial adviser to Favourite Number Limited and WLS Holdings Limited

==> picture [9 x 9] intentionally omitted <==

Reference is made to the announcements of WLS dated 22 July 2016, 9 August 2016, 18 August 2016, 1 September 2016 and 2 September 2016 respectively.

– 1 –

As at the date of the Offer Announcement, based on publicly-available information, (i) there were only 24,000,000,000 L&A Shares in issue; and (ii) there were no outstanding options, derivatives, warrants or other securities in issue convertible or exchangeable into the L&A Shares.

However, subsequent to the publication of the Offer Announcement, L&A announced on 22 August 2016 that 1,800,000,000 L&A Options were granted and accepted on 22 July 2016; and as further disclosed in L&A’s Next Day Disclosure Return published on 24 August 2016, 1,600,000,000 New L&A Shares were allotted and issued under the L&A Options on 22 August 2016.

Favourite Number did not take into account the L&A Options as well as the New L&A Shares at the time of the Offer Announcement because it did not then know anything about the L&A Options and the New L&A Shares were not in issue then. Since the 1,600,000,000 New L&A Shares are in existence and, based on publicly-available information, there are 200,000,000 L&A Options outstanding as at the date of this announcement, Favourite Number will extend the Share Offer (previously defined as the “Offer” in the Offer Announcement) to all L&A Shareholders (including holders of the New L&A Shares) and make the Option Offer to all holders of the outstanding L&A Options in compliance with General Principle 1 and Rule 13.1 of the Takeovers Code respectively.

THE OFFERS

The Offers to be made by VBG on behalf of Favourite Number shall comprise the Share Offer and the Option Offer.

The Share Offer

The basis of the Share Offer will remain unchanged, and will be as follows: For every 400 L&A Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 57 new WLS Shares and HK$5.60 in cash

The Option Offer

Based on publicly-available information, there are 200,000,000 outstanding L&A Options as at the date of this announcement. As the exercise price of each outstanding L&A Option (i.e. HK$0.0256) is lower than the ascribed value of HK$0.058175 per L&A Share under the Share Offer, the see-through price of the Option Offer is HK$0.032575 for each outstanding L&A Option, and the Option Offer will be made on the following terms:

For cancellation of every 100 outstanding L&A Options . . . . . . . . . . . . . . . . . . 8 new WLS Shares and HK$0.7775 in cash

THE NEW SHAREHOLDERS’ AGREEMENT

Due to (i) the increase in the number of issued shares of L&A resulting from the allotment and issue of the New L&A Shares; and (ii) the outstanding L&A Options, Mr. Hue, Apex Gain, WLS and Favourite Number further entered into a supplemental agreement on 12 September 2016 to amend certain terms of the original Shareholders’ Agreement. Save for those amendments as disclosed in this announcement, all other terms and conditions of the Shareholders’ Agreement shall be effective and remain in full force.

– 2 –

IMPLICATIONS UNDER THE GEM LISTING RULES RELATING TO WLS

As the highest applicable percentage ratio (as defined under the GEM Listing Rules) for WLS in respect of the transactions in connection with the Offers is more than 100%, the Offers constitute a very substantial acquisition for WLS under Chapter 19 of the GEM Listing Rules and will therefore be subject to the notification, announcement, circular and WLS Shareholders’ approval requirements under Chapter 19 of the GEM Listing Rules.

The Specific Mandate (which shall cover all the WLS Shares to be allotted and issued in settlement of the securities portion of the consideration for the Offers) is also subject to the approval of the WLS Shareholders at the WLS SGM pursuant to Rule 17.39(1) of the GEM Listing Rules.

A resolution will be proposed at the WLS SGM to approve (i) the Transactions; and (ii) the grant of the Specific Mandate. Based on the information available to the directors of WLS as at the date of this announcement and to the best of their knowledge, information and belief having made all reasonable enquiries, no WLS Shareholders will be required to abstain from voting at the WLS SGM on the resolution relating to the Transactions and the Specific Mandate. A circular containing, among other things, details of the Transactions and the proposed grant of the Specific Mandate and the notice convening the WLS SGM will be despatched to the WLS Shareholders on or before 29 September 2016.

THE OFFER DOCUMENT

The Offer Document will contain, among other things, further details of the Offers, and will be despatched within seven days after the satisfaction of the Pre-condition, which is expected to be on or before 24 October 2016. Favourite Number has applied to the Executive for its consent under Note 2 to Rule 8.2 of the Takeovers Code and the Executive is minded to grant such consent.

THE WLS SGM

The WLS SGM will be held to consider and, if thought fit, pass the requisite resolution to approve the Transactions and the grant of the Specific Mandate.

WARNING

Shareholders and potential investors of WLS and/or L&A should be aware that the Offers will be made only if the Pre-condition is satisfied and if made will be subject to the satisfaction or waiver (where applicable) of the conditions of the Offers. Accordingly, the Offers may or may not be made and if made may or may not become unconditional. WLS Shareholders, L&A Shareholders and potential investors of WLS and/or L&A should therefore exercise caution when dealing in WLS Shares and/or L&A Shares. Persons who are in doubt as to the action they should take should consult their stockbroker, bank manager, solicitor or other professional advisers.

Reference is made to the announcements of WLS dated 22 July 2016, 9 August 2016, 18 August 2016 (the “ Offer Announcement ”), 1 September 2016 and 2 September 2016 respectively. Unless otherwise specified, capitalised terms used in this announcement shall have the same meanings as those defined in the Offer Announcement.

– 3 –

As at the date of the Offer Announcement based on publicly-available information, (i) there were only 24,000,000,000 L&A Shares in issue; and (ii) there were no outstanding options, derivatives, warrants or other securities in issue convertible or exchangeable into the L&A Shares.

However, subsequent to the publication of the Offer Announcement, L&A announced on 22 August 2016 that 1,800,000,000 options (the “ L&A Option(s) ”) were granted and accepted on 22 July 2016; and as further disclosed in L&A’s Next Day Disclosure Return published on 24 August 2016, 1,600,000,000 new additional L&A Shares (the “ New L&A Shares ”) were allotted and issued under the L&A Options on 22 August 2016.

Favourite Number did not take into account the L&A Options as well as the New L&A Shares at the time of the Offer Announcement because it did not then know anything about the L&A Options and the New L&A Shares were not in issue then. Since the New L&A Shares are in existence and, based on publicly-available information, there are 200,000,000 L&A Options outstanding as at the date of this announcement, Favourite Number will extend the share offer (previously defined as the “Offer” in the Offer Announcement) to all L&A Shareholders (including holders of the New L&A Shares) (the “ Share Offer ”) and make the option offer to all holders of the outstanding L&A Options (the “ Option Offer ”) in compliance with General Principle 1 and Rule 13.1 of the Takeovers Code respectively (the Share Offer together with the Option Offer, the “ Offers ”).

As at the date of this announcement, Favourite Number, WLS, Mr. Hue and parties acting in concert with any of them do not hold or have control or direction over any L&A Shares or hold any convertible securities, warrants or options in respect of any L&A Shares.

Favourite Number, being the offeror of the Offers, is a company incorporated in the British Virgin Islands on 28 June 2016 and is principally engaged in investment holding. Favourite Number has been owned as to 47% by Apex Gain (a wholly-owned subsidiary of WLS) and as to 53% ultimately and beneficially by Mr. Hue since its activation on 22 July 2016.

THE OFFERS

The Offers to be made by VBG on behalf of Favourite Number, shall comprise the Share Offer and the Option Offer.

The Share Offer

The basis of the Share Offer will remain unchanged, and will be as follows:

For every 400 L&A Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 new WLS Shares and HK$5.60 in cash

– 4 –

The Option Offer

Based on publicly-available information, there are 200,000,000 outstanding L&A Options as at the date of this announcement. As the exercise price of each outstanding L&A Option (i.e. HK$0.0256) is lower than ascribed value of HK$0.058175 per L&A Share under the Share Offer, the see-through price of the Option Offer is HK$0.032575 for each outstanding L&A Option, and the Option Offer will be made on the following terms:

For cancellation of every 100 outstanding L&A Options . . . . . . . . . . . . . . . . . . . . . 8 new WLS Shares and HK$0.7775 in cash

Following the Option Offer becoming unconditional, the relevant L&A Options tendered for cancellation together with all rights attaching thereto will be entirely cancelled and renounced.

Pre-condition

The transactions contemplated under the Offers (comprising the acquisition of L&A Shares by Favourite Number which is a joint venture formed by Apex Gain and Mr. Hue, the issue of WLS Shares (including the Additional WLS Shares) by WLS) (the “ Transactions ”) constitute a very substantial acquisition for WLS for the purpose of the GEM Listing Rules. Accordingly, the Offers will be made after satisfaction of the Pre-condition that the Transactions and the proposed grant of the Specific Mandate have been approved by the WLS Shareholders at the WLS SGM in accordance with the GEM Listing Rules. The Pre-condition cannot be waived.

Conditions of the Offers

The conditions of the Share Offer have been disclosed in the paragraph headed “CONDITIONS OF THE OFFER” of the Offer Announcement.

The Option Offer is conditional upon the Share Offer becoming unconditional in all aspects.

Value of the Offers

As at the date of this announcement, based on publicly-available information, the relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of L&A in issue comprise (i) 25,600,000,000 L&A Shares; and (ii) 200,000,000 outstanding L&A Options to subscribe for 200,000,000 L&A Shares. Save as disclosed above, based on publicly-available information, L&A has no other relevant securities as at the date of this announcement.

Based on the exchange ratio of 57 WLS Shares per 400 L&A Shares and 25,600,000,000 L&A Shares in issue (based on publicly-available information) as at the date of this announcement, the maximum number of new WLS Shares that may fall to be issued in connection with the Share Offer is 3,648,000,000. Based on the exchange ratio of 8 WLS Shares per 100 L&A Options and 200,000,000 outstanding L&A Options (based on publicly available information) as at the date of this announcement, the maximum number of new WLS Shares that may fall to be issued in connection with the Option Offer is 16,000,000. The 3,664,000,000 new WLS Shares in total represents (i) approximately 28.70% of the existing issued share capital of WLS of 12,767,101,072 WLS Shares as at the date of this announcement; and (ii) approximately

– 5 –

22.30% of the enlarged issued share capital of WLS of 16,431,101,072 WLS Shares immediately following the issue of the aforesaid number of new WLS Shares.

In the event that all outstanding L&A Options are exercised before the Closing Date, L&A will have to issue 200,000,000 new additional L&A Shares. Assuming that the Share Offer is accepted in full (including all new L&A Shares issued and allotted as a result of the exercise of the L&A Options), the maximum number of new WLS Shares that may fall to be issued in connection with the Share Offer is 3,676,500,000. This represents (i) approximately 28.80% of the existing issued share capital of WLS of 12,767,101,072 WLS Shares as at the date of this announcement; and (ii) approximately 22.36% of the enlarged issued share capital of WLS of 16,443,601,072 WLS Shares immediately following the issue of the aforesaid number of new WLS Shares.

Based on the closing price of each WLS Share of HK$0.310, as quoted on the Stock Exchange on the Last Trading Day and the exchange ratio of 57 WLS Share plus HK$5.60 in cash per 400 L&A Shares, the ascribed value per L&A Share under the Share Offer is HK$0.058175. Based on such ascribed value per L&A Share, the entire issued share capital of L&A as at the date of this announcement is valued at HK$1,489,280,000. In addition, the amount required to satisfy the cancellation of all outstanding L&A Options based on the see-through price of HK$0.032575 per outstanding L&A Option is HK$6,515,000. In view of the above and assuming that no L&A Options are exercised before the Closing Date, the Offers are valued at HK$1,495,795,000 in aggregate.

In the event that all outstanding L&A Options are exercised before the Closing Date, L&A will have to issue 200,000,000 new additional L&A Shares. Assuming that the Share Offer is accepted in full (including all new L&A Shares issued and allotted as a result of the exercise of the L&A Options), the maximum value of the Share Offer will be increased to HK$1,500,915,000. In such case, no amount will be payable by Favourite Number under the Option Offer.

Based on the closing price of each WLS Share of HK$0.239 as quoted on the Stock Exchange on 9 September 2016, being the last trading day before the date of this announcement, and the exchange ratio of 57 WLS Shares plus HK$5.60 in cash per 400 L&A Shares, the ascribed value per L&A Share under the Share Offer is HK$0.0480575.

On the other hand, the implied issue price of approximately HK$0.267 per new WLS Share (being the closing price of HK$0.052 per L&A Share as quoted on the Stock Exchange on 9 September 2016, being the last trading day before the date of this announcement, multiplied by 400, and minus HK$5.60; and then divided by 57) represents a premium of approximately 11.72% over the closing price of WLS Shares of HK$0.239 as quoted on the Stock Exchange on 9 September 2016, being the last trading day before the date of this announcement.

Confirmation of financial resources

Favourite Number will finance the cash required for the Offers from its own cash reserves, as contributed by Mr. Hue from his own cash on hand as well as the Gold Medal Loan.

VBG, being the financial adviser to Favourite Number in respect of the Offers, has confirmed that it is satisfied that sufficient financial resources are available to Favourite Number to satisfy full acceptance of the Offers in accordance with their terms.

– 6 –

THE NEW SHAREHOLDERS’ AGREEMENT

Due to (i) the increase in the number of issued shares of L&A resulting from the allotment and issue of the New L&A Shares; and (ii) the outstanding L&A Options, Mr. Hue, Apex Gain, WLS and Favourite Number further entered into a supplemental agreement on 12 September 2016 to amend certain terms of the original Shareholders’ Agreement (the Shareholders’ Agreement as supplemented by the supplemental agreement dated 12 September 2016, the “ New Shareholders’ Agreement ”). Save for the below amendments, all other terms and conditions of the Shareholders’ Agreement shall be effective and remain in full force.

Cash contribution by Mr. Hue

Scenario One

As at the date of this announcement, based on publicly-available information, there are 25,600,000,000 L&A Shares in issue and 200,000,000 L&A Options outstanding. Assuming that there will be no change in the issued share capital of L&A since the date of this announcement and up to the Closing Date, the maximum subscription price to be paid in cash by Mr. Hue for subscription of his additional shares in Favourite Number pursuant to the New Shareholders’ Agreement is HK$359,955,000 (representing the cash portion of the Share Offer as well as the Option Offer).

Scenario Two

In the event that all outstanding L&A Options are exercised before the Closing Date, L&A will have to issue 200,000,000 new additional L&A Shares. Assuming that the Share Offer is accepted in full (including all new L&A Shares issued and allotted as a result of the exercise of the L&A Options), the maximum subscription price to be paid in cash by Mr. Hue for subscription of his additional shares in Favourite Number pursuant to the New Shareholders’ Agreement is HK$361,200,000 (representing the cash portion of the Share Offer only).

Pursuant to the terms of the New Shareholders’ Agreement, Mr. Hue has already deposited approximately HK$362,000,000 in immediately available funds to a bank account designated by Favourite Number and irrevocably authorised Favourite Number and/or any other party to the New Shareholders’ Agreement to arrange the application thereof in satisfaction of the subscription price referred to above.

Contribution of WLS Shares by Mr. Hue

Under Scenario One, the aggregate price of the maximum number of Additional WLS Shares that Mr. Hue is required to pay is HK$331,431,298 (i.e. HK$0.2578 * {(25,600,000,000 * 20/ 400) + (200,000,000 * 0.08 * 20/ 57)}), which will be settled by Mr. Hue by way of the delivery of the Promissory Note in the maximum principal amount of HK$331,431,298 issued by him to Apex Gain. The actual principal amount of the Promissory Note will depend on the level of acceptances under the Offers.

Under Scenario Two, the aggregate price of the maximum number of Additional WLS Shares that Mr. Hue is required to pay is HK$332,562,000 (i.e. HK$0.2578 * 25,800,000,000 * 20/ 400), which will be settled by Mr. Hue by way of the delivery of the Promissory Note in the maximum principal amount of HK$332,562,000 issued by him to Apex Gain. The actual principal amount of the Promissory Note will depend on the level of acceptances under the Share Offer.

– 7 –

In conclusion, under Scenario One, Mr. Hue will be contributing to the Offers a maximum of HK$359,955,000 in cash and 1,285,614,035 WLS Shares (i.e. (25,600,000,000 * 20/ 400) + (200,000,000 * 0.08 * 20/ 57)), which he will acquire through arrangements with Apex Gain pursuant to the New Shareholders’ Agreement. Under Scenario Two, Mr. Hue will be contributing to the Share Offer HK$361,200,000 in cash and 1,290,000,000 WLS Shares (i.e. 25,800,000,000 * 20/ 400), which he will acquire through arrangements with Apex Gain pursuant to the New Shareholders’ Agreement.

Cash contribution by Apex Gain

Under both Scenario One and Scenario Two, Apex Gain is not required to contribute any cash for the making the Offers pursuant to the New Shareholders’ Agreement.

Contribution of WLS Shares by Apex Gain

Under Scenario One, the maximum Apex Gain’s Contribution is approximately HK$613,147,902 (i.e. HK$0.2578 * {(25,600,000,000 * 37/ 400) + (200,000,000 * 0.08 * 37/ 57)}). The Apex Gain’s Contribution shall be satisfied by WLS, allotting and issuing, credited as fully paid at the Agreed Price, of such number of new WLS Shares ultimately and directly to the accepting L&A Shareholders at the direction of Favourite Number. Accordingly, a maximum of 2,378,385,965 WLS Shares (i.e. HK$613,147,902/ HK$0.2578) may be allotted and issued under the Apex Gain’s Contribution.

Under Scenario Two, the maximum Apex Gain’s Contribution is HK$615,239,700 (i.e. HK$0.2578 * 25,800,000,000 * 37/ 400). The Apex Gain’s Contribution shall be satisfied by WLS, allotting and issuing, credited as fully paid at the Agreed Price, of such number of new WLS Shares ultimately and directly to the accepting L&A Shareholders at the direction of Favourite Number. Accordingly, a maximum of 2,386,500,000 WLS Shares (i.e. HK$615,239,700/ HK$0.2578) may be allotted and issued under the Apex Gain’s Contribution.

In conclusion, under Scenario One, Apex Gain will be contributing a maximum of 2,368,000,000 WLS Shares and 10,385,965 WLS Shares to the Share Offer and the Option Offer respectively. Under Scenario Two, Apex Gain will be contributing a maximum of 2,386,500,000 WLS Shares to the Share Offer.

To this end, taking into account the cash to be contributed by Mr. Hue to the Offers and the Agreed Price for each WLS Share to be contributed by Mr. Hue and Apex Gain for the Offers, the contributions to be made by Mr. Hue (Scenario One: HK$691,386,298 in total; Scenario Two: HK$693,762,000 in total) and Apex Gain (Scenario One: HK$613,147,902; Scenario Two: HK$615,239,700) to Favourite Number are proportionate to their respective shareholding interests (53%/ 47%) in Favourite Number.

THE SPECIFIC MANDATE

All the WLS Shares (including the Additional WLS Shares) to be allotted and issued to satisfy the securities portion of the consideration for the Offers will be allotted and issued, credited as fully paid, by WLS ultimately and directly to the L&A Shareholders for the sole purpose of the Offers. As all the WLS Shares to be allotted and issued pursuant to the Specific Mandate will be applied towards settlement of acceptances of the Offers, no cash proceeds will be received by WLS in connection with such allotment.

– 8 –

REASONS FOR THE OFFERS

On 19 May 2016, L&A announced the proposed sub-division of every one (1) existing issued and unissued L&A Share into five (5) subdivided L&A Shares. Before 6 July 2016, the market prices of L&A Shares (after adjustments due to the aforesaid sub-division) were relatively stable and stayed above HK$0.40 over the past year most of the time. There was a sudden significant drop in the L&A Share price on 6 July 2016 from HK$0.395, the day’s highest, to HK$0.017 the day’s lowest and the price closed at HK$0.032. Thereafter, the market prices of L&A Shares remained below HK$0.030. Trading in the L&A Shares was suspended between 22 July 2016 (afternoon session only) and 28 July 2016 (full trading day). After the resumption of trading, the market prices of L&A Shares rose to above HK$0.040 but are still below HK$0.060 as at the date of this announcement. The directors of WLS consider the market price of L&A Shares to be attractive.

In or around early July 2016, Mr. Hue noted the sudden decline of the market price of the L&A Shares and started to consider whether it was feasible to acquire a majority stake in L&A. Mr. Hue then started to arrange financing for the possible acquisition of L&A Shares. On 21 July 2016, Mr. Hue approached Mr. Ng Tang (“ Mr. Ng ”), an executive director of WLS, to see if WLS was interested in making the Offers. Mr. Hue is a personal friend of Mr. Ng. Mr. Ng then reported this possible investment opportunity to the board of directors of WLS on 22 July 2016 for discussion and consideration.

One of the principal businesses of the WLS Group is securities investment, and the directors of WLS are of the view that the Offers represent an opportunity for WLS to make a significant investment given the current exceptional low market capitalisation of L&A as compared to the previous levels. WLS will participate in the Offers through Favourite Number, a joint venture in which it has a 47% shareholding interest such that L&A will not be a subsidiary of WLS during or immediately after completion of the Offers, and hence the financial results of L&A will not be consolidated into those of the WLS Group.

In addition, although the issue of new WLS Shares under the Offers will dilute the shareholding interests of the existing WLS Shareholders, as balanced against the fact that the Offers do not require any cash outlay on the part of WLS, the existing business and operations of the WLS Group will not be materially affected by WLS’s participation in the Offers.

The directors of WLS confirm that the terms and conditions of the Offers and the transactions contemplated thereunder are fair and reasonable and on normal commercial terms. Having considered the terms and conditions of the Offers, the directors of WLS further confirm that the Offers and the transactions contemplated thereunder are in the interests of WLS and the WLS Shareholders as a whole regardless of the possible response of the existing management of L&A as the public L&A Shareholders (based on publicly-available information) are holding the majority of L&A’s total issued shares.

SHAREHOLDING STRUCTURE OF WLS

As at the date of this announcement, there are 12,767,101,072 WLS Shares in issue. Save and except for the outstanding share options granted by WLS to subscribe for 4,320,000 WLS Shares, there are no outstanding options, derivatives, warrants or other securities in issue convertible or exchangeable into WLS Shares.

– 9 –

Set out below are the possible shareholding structure of WLS both before and after completion of the Offers:

WLS Shareholders Dr. So Yu Shing (Note) Mr. Kong Kam Wang (Note) Ms. Lai Yuen Mei, Rebecca (Note) Mr. So Wang Chun, Edmond (Note) Mr. Ng Tang (Note) Avant Capital Management (Hong Kong) Limited and its funds Existing public shareholders Acceptors of the Offers Total	As at the date of this announcement No. of WLS Shares % 3,320,000 0.03 1,778,000 0.01 3,320,000 0.03 800,000 0.01 5,536,000 0.04 2,022,000,000 15.84 10,730,347,072 84.05 – – 12,767,101,072 100.00	Immediately after completion of the Offers (assuming all L&A Shareholders validly elect to accept the Offers, no L&A Options are exercised and all L&A Options are tendered for cancellation) No. of WLS Shares % 3,320,000 0.02 1,778,000 0.01 3,320,000 0.02 800,000 0.00 5,536,000 0.03 2,022,000,000 12.31 10,730,347,072 65.31 3,664,000,000 22.30 16,431,101,072 100.00	Immediately after completion of the Offers (assuming all L&A Shareholders validly elect to accept the Offers and all outstanding L&A Options are exercised) No of WLS Shares % 3,320,000 0.02 1,778,000 0.01 3,320,000 0.02 800,000 0.00 5,536,000 0.03 2,022,000,000 12.30 10,730,347,072 65.26 3,676,500,000 22.36 16,443,601,072 100.00	Immediately after completion of the Offers (assuming all L&A Shareholders validly elect to accept the Offers and all outstanding L&A Options are exercised) No of WLS Shares % 3,320,000 0.02 1,778,000 0.01 3,320,000 0.02 800,000 0.00 5,536,000 0.03 2,022,000,000 12.30 10,730,347,072 65.26 3,676,500,000 22.36 16,443,601,072 100.00
				100.00

Note: Each of them is an executive Director.

SHAREHOLDING STRUCTURE OF L&A

Based on publicly-available information as at the date of this announcement, there are 25,600,000,000 L&A Shares in issue. There are no classes of securities of L&A in issue other than the L&A Shares.

Based on publicly-available information as at the date of this announcement, other than the outstanding L&A Options, there are no other outstanding options, derivatives, warrants or other securities in issue convertible or exchangeable into the L&A Shares.

– 10 –

Set out below are the possible shareholding structure of L&A both before and after completion of the Offers:

L&A Shareholders Yang’s Holdings Capital Limited (Note) Favourite Number Public shareholders Total	As at the date of this announcement (based on publicly-available information) No. of L&A Shares % 6,003,880,000 23.45 – – 19,596,120,000 76.55 25,600,000,000 100.00	Immediately after completion of the Offers (assuming all L&A Shareholders validly elect to accept the Offers, no outstanding L&A Options are exercised and all L&A Options are tendered for cancellation) No. of L&A Shares % – – 25,600,000,000 100.00 – – 25,600,000,000 100.00	Immediately after completion of the Offers (assuming all L&A Shareholders validly elect to accept the Offers and all outstanding L&A Options are exercised) No. of L&A Shares % – – 25,800,000,000 100.00 – – 25,800,000,000 100.00	Immediately after completion of the Offers (assuming all L&A Shareholders validly elect to accept the Offers and all outstanding L&A Options are exercised) No. of L&A Shares % – – 25,800,000,000 100.00 – – 25,800,000,000 100.00
				100.00

Note: According to publicly-available information, the entire issued share capital of Yang’s Holdings Capital Limited is wholly-owned by YWH Investment Holding Limited, which in turn, is wholly-owned by Cantrust (Far East) Limited, the trustee of the Yang’s Family Trust, whereby Mr. Yang Si Hang, an executive director and the chief executive officer of L&A, is one of the beneficiaries of the Yang’s Family Trust.

IMPLICATIONS UNDER THE GEM LISTING RULES RELATING TO WLS

As the highest applicable percentage ratio (as defined under the GEM Listing Rules) for WLS in respect of the transactions in connection with the Offers is more than 100%, the Offers constitute a very substantial acquisition for WLS under Chapter 19 of the GEM Listing Rules and will therefore be subject to the notification, announcement, circular and WLS Shareholders’ approval requirements under Chapter 19 of the GEM Listing Rules.

The Specific Mandate (which shall cover all the WLS Shares to be allotted and issued in settlement of the securities portion of the consideration for the Offers) is also subject to the approval of the WLS Shareholders at the WLS SGM pursuant to Rule 17.39(1) of the GEM Listing Rules.

– 11 –

A resolution will be proposed at the WLS SGM to approve (i) the Transactions; and (ii) the grant of the Specific Mandate. Based on the information available to the directors of WLS as at the date of this announcement and to the best of their knowledge, information and belief having made all reasonable enquiries, no WLS Shareholders will be required to abstain from voting at the WLS SGM on the resolution relating to the Transactions and the Specific Mandate. A circular containing, among other things, details of the Transactions and the proposed grant of the Specific Mandate and the notice convening the WLS SGM will be despatched to the WLS Shareholders on or before 29 September 2016.

THE OFFER DOCUMENT

The Offer Document will contain, among other things, further details of the Offers, and will be despatched within seven days after the satisfaction of the Pre-condition, which is expected to be on or before 24 October 2016. Favourite Number has applied to the Executive for its consent under Note 2 to Rule 8.2 of the Takeovers Code and the Executive is minded to grant such consent.

THE WLS SGM

The WLS SGM will be held to consider and, if thought fit, pass the requisite resolution to approve the Transactions and the grant of the Specific Mandate.

WARNING

Shareholders and potential investors of WLS and/or L&A should be aware that the Offers will be made only if the Pre-condition is satisfied and if made will be subject to the satisfaction or waiver (where applicable) of the conditions of the Offers. Accordingly, the Offers may or may not be made and if made may or may not become unconditional. WLS Shareholders, L&A Shareholders and potential investors of WLS and/or L&A should therefore exercise caution when dealing in WLS Shares and/or L&A Shares. Persons who are in doubt as to the action they should take should consult their stockbroker, bank manager, solicitor or other professional advisers.

By order of the board of directors of By order of the board of directors of Favourite Number Limited WLS Holdings Limited So Wang Chun, Edmond So Yu Shing Director Chairman and Executive Director

Hong Kong, 12 September 2016

The directors of Favourite Number jointly and severally accept full responsibility for the accuracy of the information contained in this announcement, other than that relating to WLS and the WLS Group, and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in this announcement (other than those expressed by WLS and the WLS Group) 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 statements in this announcement misleading.

– 12 –

The directors of WLS 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 statements in this announcement misleading.

This announcement, for which the directors of WLS collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to WLS. The directors of WLS, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this announcement misleading.

As at the date of this announcement, the board of directors of Favourite Number comprises Mr. So Wang Chun, Edmond and Mr. Hue Kwok Chu Raymond.

As at the date of this announcement, the board of directors of WLS comprises Dr. So Yu Shing (Chairman and Executive Director), Mr. Kong Kam Wang (Executive Director and Chief Executive Officer), Ms. Lai Yuen Mei Rebecca (Executive Director), Mr. So Wang Chun, Edmond (Executive Director), Mr. Ng Tang (Executive Director), Mr. Yuen Chun Fai (Executive Director), Mr. Law Man Sang (Independent Nonexecutive Director), Mr. Chan Ngai Sang, Kenny (Independent Non-executive Director) and Mr. Ong Chi King (Independent Non-executive Director).

This announcement will remain on the GEM website at www.hkgem.com on the “Latest Company Announcements” page for at least 7 days from the date of its posting and on the website of WLS at www.wls.com.hk.

• For identification purposes only

– 13 –