Regent Pacific Group Limited — M&A Activity 2000

Feb 15, 2000

Listed Company Information

REGENT PACIFIC<0575> - Announcement 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. REGENT PACIFIC GROUP LIMITED (Incorporated in the Cayman Islands with limited liability) CONNECTED TRANSACTION The Board of Directors announces that on 11th February, 2000, the Company entered into an agreement (the Agreement) with La Fayette Management Holdings Limited (the Purchaser) to sell 501 shares of USD1.00 each in La Fayette, representing 50.1% of the total issued capital of La Fayette, to the Purchaser for Consideration of approximately USD1,254,000 (or approximately HKD9,780,000). The Purchaser will settle the Consideration by selling its holdings of 3,604,720 shares in the Company (the Regent Shares) in open market (for reference purposes, the closing price of the shares of the Company on 11th February, 2000 was HKD2.20 per share), together with a cash consideration of USD200,000 (approximately HKD1,560,000). The dividend paid by the Company on 21st December, 1999 of US1.0296 cents per share to the Regent Shares amounting to approximately USD37,114.20 will also form part of the total consideration. The Purchaser currently holds the remaining 49.9% of the issued share capital of La Fayette. La Fayette will become a wholly-owned subsidiary of the Purchaser after the completion of the Disposal. Pursuant to Chapter 14 of the Listing Rules, the Disposal constitutes a connected transaction of the Company. Definitions Company Regent Pacific Group Limited Consideration being approximately USD1,254,000 (or HKD9,780,000), the consideration for the Disposal Disposal the disposal of the 501 shares of USD1.00 each in La Fayette by the Company to the Purchaser Group the Company and its subsidiaries La Fayette La Fayette Management Limited, a company incorporated in the British Virgin Islands Listing Rules the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited Purchaser La Fayette Management Holdings Limited, a company incorporated in the British Virgin Islands and is a shareholder of the Company USD United States dollars, the lawful currency of the United States of America The Parties Agreement: 11th February, 2000 Vendor: the Company Purchaser: La Fayette Management Holdings Limited Target Company: La Fayette Management Limited The Purchaser currently holds 49.9% in La Fayette. After the completion of the Disposal, La Fayette will become a wholly-owned subsidiary of the Purchaser. The Disposal The Company has agreed to sell its entire holding of 501 shares of USD1.00 each in La Fayette, representing 50.1% of the issued share capital of La Fayette to the Purchaser for a Consideration of approximately USD1,254,000 (or approximately HKD9,780,000), representing a premium of 174.24% to the net asset value of La Fayette of USD1,436,560 as at the end of December 1999. The Consideration was negotiated at arm's length. The Purchaser currently holds the remaining 49.9% shareholding in La Fayette. The Consideration The Purchaser will settle the Consideration by selling 3,604,720 shares in the Company (or 0.4% of the total outstanding shares of the Company) in open market to raise cash together with a cash consideration of USD200,000 (approximately HKD1,560,000) and the interim dividend of US1.0296 cents per share paid on the Regent Shares on 21st December, 1999 amounting to approximately USD37,114.20. For reference purposes, the closing price of the shares of the Company on 11th February, 2000 was HKD2.20 per share. The sale proceeds of the Disposal received by the Company will be used for general working capital purposes. The total consideration will amount to approximately USD1,254,000 (or approximately HKD9,780,000). Completion Completion of the Agreement is conditional upon, inter alia, obtaining the approval of the Financial Supervision Authority in the United Kingdom on the setting up of a new subsidiary of La Fayette in the United Kingdom. On completion, the Purchaser shall instruct a broker to sell the Regent Shares and such Regent Shares shall be sold at the earliest opportunity and within ten business days of instructions for sale being given to and accepted by the broker provided that no more than 750,000 shares of the Company shall be sold on any trading day. Information about La Fayette La Fayette is incorporated in the British Virgin Islands. It is a fund management company. The accounts of La Fayette showed a profit before and after taxation as at 31st March, 1999 and 31st March, 1998 of USD1,232,085 and USD1,722,210 respectively. La Fayette is incorporated in British Virgin Islands where there is no requirement for taxation. The net asset value of La Fayette as at 31st March, 1999 was USD854,295. Reasons for the Disposal The Group's principal activities consist of asset management, provision of investment advisory services, corporate finance and advisory services, corporate investment and brokerage. La Fayette is a fund management company specialising in fund- of-funds. It was acquired by the Company from the Purchaser in April 1997 to enhance its fund management capabilities in this specialised area. As the Group has focused increasingly on direct investment as its core business, the Directors considered it an opportune time to sell its stake in La Fayette when the Purchaser approached the Company expressing its interest to buy back the shares they sold to the Company in 1997. General Both the Company and the Purchaser are substantial shareholders of La Fayette and own 50.1% and 49.9% of the issued share capital of La Fayette respectively. The Disposal constitutes a connected transaction for the Company under Rule 14.23 of the Listing Rules. The Consideration represents less than 3% of the net asset value of the Company as at 30th September, 1999, being the date of its latest published unaudited consolidated financial statements for the six months ended 30th September, 1999. Details of the transaction will be published in the next annual report and accounts of the Company. The Directors of the Company, including the independent non- executive Directors, consider that the Disposal and the Consideration are fair and reasonable and that it is in the interest of the Group as a whole to enter into the transaction. By the order of the Board Jim Mellon Chairman Hong Kong, 14th February, 2000