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SPT Energy Group Inc. — M&A Activity 2011
May 27, 2011
49801_rns_2011-05-27_3925344f-e6c0-405d-ae42-c4374f435b5d.pdf
M&A Activity
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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this joint 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 joint announcement.
Profit United Investments Limited
(Incorporated in the British Virgin Islands with limited liability)
(Incorporated in Hong Kong with limited liability) (Stock code: 570)
JOINT ANNOUNCEMENT
(1) ACQUISITION OF SALE SHARES IN WINTEAM PHARMACEUTICAL GROUP LIMITED BY PROFIT CHANNEL DEVELOPMENT LIMITED AND EXTRA BENEFIT CORP.
(2) UNCONDITIONAL MANDATORY CASH OFFER BY
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Shenyin Wanguo Securities (H.K.) Limited
FOR AND ON BEHALF OF PROFIT UNITED INVESTMENTS LIMITED FOR ALL THE ISSUED SHARES IN WINTEAM PHARMACEUTICAL GROUP LIMITED (OTHER THAN THOSE ALREADY OWNED OR AGREED TO BE ACQUIRED BY PROFIT UNITED INVESTMENTS LIMITED AND PARTIES ACTING IN CONCERT WITH IT)
AND
(3) RESUMPTION OF TRADING
Financial Adviser to Financial Adviser to Profit United Investments Limited Winteam Pharmaceutical Group Limited
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Shenyin Wanguo Capital (H.K.) Limited
Optima Capital Limited
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THE S&P AGREEMENT
Pursuant to the S&P Agreement, the Vendor has agreed to sell 605,290,886 Shares and each of Profit Channel and Extra Benefit has agreed to acquire 302,645,443 Shares. The total consideration for the Sale Shares of HK$680,952,246.75 (or HK$1.125 per Sale Share) has been and will be settled in cash as follows:
-
(i) the First Instalment (representing 30% of the Consideration) was paid by the Purchasers to the Vendor upon signing of the S&P Agreement; and
-
(ii) the remaining 70% of the Consideration will be payable by the Purchasers at Completion.
The S&P Agreement is unconditional. Completion shall take place on or before 18 October 2011, being the date falling on the expiry of the five-month period after the date of the S&P Agreement, when the remaining 70% of the Consideration is settled by the Purchasers in cash.
An irrevocable undertaking has been given by the Vendor in favour of the Purchasers as one of the terms of the S&P Agreement pursuant to which the voting rights attached to 181,587,266 Shares, representing approximately 30% of the Sale Shares, are vested upon the Purchasers during the Undertaking Period.
UNCONDITIONAL MANDATORY CASH OFFER
Upon the execution of the Undertaking, the total voting rights of the Company in percentage vested upon the Offeror, the Purchasers and parties acting in concert with any of them has increased by approximately 10.18% from approximately 40.32% to 50.50%. Pursuant to Rule 26.1(d) of the Takeovers Code, the Offeror and parties acting in concert with it are mandatorily required to make the Offer for all the issued Shares (other than those already owned or agreed to be acquired by the Offeror and parties acting in concert with it).
Shenyin Wanguo Securities (H.K.) Limited will make the Offer for and on behalf of the Offeror in compliance with the Takeovers Code on the following terms:
For every Offer Share ...........................................................................................HK$1.125 in cash
The Offer Price of HK$1.125 per Offer Share is the same as the price per Sale Share paid or payable by the Purchasers under the S&P Agreement.
The principal terms of the Offer are set out in the section headed “Unconditional mandatory cash offer” in this joint announcement.
On the basis of the Offer Price of HK$1.125 per Offer Share and 1,783,410,807 Shares in issue as at the date of this joint announcement, the entire issued share capital of the Company is valued at HK$2,006,337,157.875. As at the date of this joint announcement, the voting rights attached to 900,689,829 Shares, representing approximately 50.50% of the total voting rights attached to all
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the issued Shares, are owned or controlled or directed by the Offeror and parties acting in concert with it. Immediately after Completion, the Offeror and parties acting in concert with it will have owned 1,324,393,449 Shares, representing approximately 74.26% of the total issued Shares. Hence, 459,017,358 Offer Shares are subject to the Offer and are valued at HK$516,394,527.75 on the basis of the Offer Price.
The financial resources of the Offeror to fund the Offer amounting to an aggregate of HK$516,394,527.75 are financed as to HK$466,000,000 by the Facility granted by Shenyin Wanguo Securities (H.K.) Limited and by the Offeror’s own cash for the remaining balance of HK$50,394,527.75. Shenyin Wanguo Capital (H.K.) Limited has been appointed as the financial adviser to the Offeror in respect of the Offer and is satisfied that sufficient financial resources are available to the Offeror to satisfy full acceptance of the Offer.
GENERAL
The Independent Board Committee comprising all the independent non-executive Directors has been established to advise the Independent Shareholders as to whether the Offer is, or is not, fair and reasonable and as to its acceptance. The Independent Financial Adviser will be appointed by the Company after approval by the Independent Board Committee to advise the Independent Board Committee in respect of the Offer and in particular as to whether the Offer is, or is not, fair and reasonable and as to its acceptance.
It is the intention of the Offeror and the Company to combine the offer document from the Offeror with the offeree board circular from the Company in a composite document. In accordance with Rule 8.2 of the Takeovers Code, the composite document containing, among other things: (i) details of the Offer (including the expected timetable); (ii) a letter of recommendation from the Independent Board Committee to the Independent Shareholders in relation to the Offer; and (iii) a letter of advice from the Independent Financial Adviser to the Independent Board Committee in relation to the Offer, together with the relevant form of acceptance and transfer, is required to be despatched to the Shareholders within 21 days of the date of this joint announcement.
WARNING
The Directors make no recommendation as to the fairness or reasonableness of the Offer or as to the acceptance of the Offer in this joint announcement, and strongly recommend the Independent Shareholders not to form a view on the Offer unless and until they have received and read the composite document, including the recommendation of the Independent Board Committee in respect of the Offer and the letter of advice from the Independent Financial Adviser.
Shareholders and potential investors are advised to exercise caution when dealing in the Shares, and if they are in any doubt about their position, they should consult their professional advisers.
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SUSPENSION AND RESUMPTION OF TRADING
At the request of the Company, trading in the Shares on the Stock Exchange was suspended with effect from 9:00 a.m. on 20 May 2011 pending the release of this joint announcement. An application has been made by the Company to the Stock Exchange for the resumption of trading in the Shares on the Stock Exchange with effect from 9:00 a.m. on 30 May 2011.
Reference is made to the announcements of the Company dated 21 December 2010, 20 January 2011, 18 February 2011, 21 March 2011 and 20 April 2011.
THE S&P AGREEMENT
On 19 May 2011, the Purchasers and the Vendor entered into the S&P Agreement in relation to the sale and purchase of the Sale Shares. The principal terms of the S&P Agreement are summarised below:
Date
19 May 2011 (after trading hours)
Parties
Purchasers: (i) Profit Channel; and (ii) Extra Benefit
Vendor: Hensil Investments Group Limited
Subject of the S&P Agreement
Pursuant to the S&P Agreement, the Vendor has agreed to sell 605,290,886 Shares and each of Profit Channel and Extra Benefit has agreed to acquire 302,645,443 Shares.
The Sale Shares will be sold free from all Encumbrances together with all rights attaching thereto as at the date of Completion including but not limited to all dividends paid, declared or made on or after the date of Completion.
Consideration
The total consideration for the Sale Shares of HK$680,952,246.75 (or HK$1.125 per Sale Share) which has been agreed between the Purchasers and the Vendor after arm’s length negotiations has been and will be settled in cash as follows:
-
(i) the First Instalment (representing 30% of the Consideration) was paid by the Purchasers to the Vendor upon signing of the S&P Agreement; and
-
(ii) the remaining 70% of the Consideration will be payable by the Purchasers at Completion.
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The Undertaking
Pursuant to the provisions of the Undertaking, the Vendor irrevocably undertakes to the Purchasers that: (i) prior to receiving the written instruction given by the Purchasers in respect of the voting rights attached to 181,587,266 Shares, representing approximately 30% of the Sale Shares, the Vendor shall not vote at any general meeting of the Company in respect of such Sale Shares; and (ii) the Vendor shall only exercise the voting rights attached to 181,587,266 Shares in accordance with the written instruction given by the Purchasers prior to any general meeting of the Company during the Undertaking Period.
In the event that the S&P Agreement is terminated, the Undertaking will lapse and the Vendor will no longer have to vote at any general meeting of the Company in accordance with the written instruction given by the Purchasers in respect of the voting rights attached to 181,587,266 Shares. Accordingly, the total voting rights of the Company in percentage vested upon the Vendor will restore from approximately 23.76% back to 33.94%. In this case, the Vendor will not be mandatorily required to make any conditional mandatory general offer under the Takeovers Code.
Completion
The S&P Agreement is unconditional. Completion shall take place on or before 18 October 2011, being the date falling on the expiry of the five-month period after the date of the S&P Agreement, when the remaining 70% of the Consideration is settled by the Purchasers in cash.
In the event of the Purchasers failing to settle the remaining 70% of the Consideration in cash in accordance with the terms of the S&P Agreement at Completion and the S&P Agreement being terminated accordingly, the First Instalment will be forfeited. In such event, the Undertaking will lapse and the total voting rights of the Company in percentage vested upon the Offeror, the Purchasers and parties acting in concert with any of them will restore from approximately 50.50% back to 40.32%.
The Purchasers have joint and several liabilities in respect of their obligations (including the settlement of the remaining 70% of the Consideration) under the S&P Agreement.
UNCONDITIONAL MANDATORY CASH OFFER
Upon the execution of the Undertaking, the total voting rights of the Company in percentage vested upon the Offeror, the Purchasers and parties acting in concert with any of them has increased by approximately 10.18% from approximately 40.32% to 50.50%. Pursuant to Rule 26.1(d) of the Takeovers Code, the Offeror and parties acting in concert with it are mandatorily required to make the Offer for all the issued Shares (other than those already owned or agreed to be acquired by the Offeror and parties acting in concert with it).
Upon Completion, the total voting rights of the Company in percentage vested upon the Offeror, the Purchasers and parties acting in concert with any of them will further increase from approximately 50.50% to 74.26% at the same price as the Offer Price. Such increase is in compliance with Rule 31.3 of the Takeovers Code and no further unconditional mandatory general offer obligation will be triggered accordingly.
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As at the date of this joint announcement, the Company has no outstanding options, warrants or convertible or exchangeable securities carrying rights to subscribe for, convert or exchange, into Shares.
Principal terms of the Offer
Shenyin Wanguo Securities (H.K.) Limited will make the Offer for and on behalf of the Offeror in compliance with the Takeovers Code on the following terms:
For every Offer Share ............................................................................................... HK$1.125 in cash
The Offer Price of HK$1.125 per Offer Share is the same as the price per Sale Share paid or payable by the Purchasers under the S&P Agreement.
Comparison of value
The Offer Price of HK$1.125 represents:
-
(i) a discount of approximately 26.95% to the closing price of HK$1.54 per Share as quoted on the Stock Exchange on the Last Trading Day;
-
(ii) a discount of approximately 26.66% to the average of the closing prices of the Shares as quoted on the Stock Exchange for the 5 consecutive trading days up to and including the Last Trading Day of HK$1.534 per Share;
-
(iii) a discount of approximately 23.37% to the average of the closing prices of the Shares as quoted on the Stock Exchange for the 10 consecutive trading days up to and including the Last Trading Day of HK$1.468 per Share; and
-
(iv) a premium of approximately 140.08% over the audited consolidated net asset value attributable to Shareholders of approximately HK$0.4686 per Share as at 31 December 2010.
Highest and lowest Share prices
The highest and lowest closing prices of the Shares as quoted on the Stock Exchange during the period commencing six months preceding the commencement of the Offer period i.e. the date of the announcement of the Company dated 21 December 2010 up to and including the Last Trading Day were HK$1.54 per Share (on 13, 18 and 19 May 2011) and HK$1.04 per Share (on 30 August 2010) respectively.
Value of the Offer
On the basis of the Offer Price of HK$1.125 per Offer Share and 1,783,410,807 Shares in issue as at the date of this joint announcement, the entire issued share capital of the Company is valued at HK$2,006,337,157.875. As at the date of this joint announcement, the voting rights attached to 900,689,829 Shares, representing approximately 50.50% of the total voting rights attached to all the
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issued Shares, are owned or controlled or directed by the Offeror and parties acting in concert with it. Immediately after Completion, the Offeror and parties acting in concert with it will have owned 1,324,393,449 Shares, representing approximately 74.26% of the total issued Shares. Hence, 459,017,358 Offer Shares are subject to the Offer and are valued at HK$516,394,527.75 on the basis of the Offer Price.
Financial resources available for the Offer
The financial resources of the Offeror to fund the Offer amounting to an aggregate of HK$516,394,527.75 are financed as to HK$466,000,000 by the Facility granted by Shenyin Wanguo Securities (H.K.) Limited and by the Offeror’s own cash for the remaining balance of HK$50,394,527.75. In connection with the provision of the Facility, Shenyin Wanguo Securities (H.K.) Limited entered into a participation agreement on 26 May 2011 with Sun Hung Kai Investment Services Limited whereby Shenyin Wanguo Securities (H.K.) Limited can unconditionally draw down from Sun Hung Kai Investment Services Limited an amount of up to HK$200,000,000 in cash for the sole purpose of satisfying the Offeror’s financial obligation under the Offer. Sun Hung Kai Investment Services Limited is principally engaged in investment holding, share broking and margin financing and is a corporation licensed to carry on type 1 (dealing in securities) and type 4 (advising on securities) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). Sun Hung Kai Investment Services Limited is presumed to be acting in concert with the Offeror under the Takeovers Code.
Shenyin Wanguo Capital (H.K.) Limited has been appointed as the financial adviser to the Offeror in respect of the Offer and is satisfied that sufficient financial resources are available to the Offeror to satisfy full acceptance of the Offer.
Effect of accepting the Offer
By accepting the Offer, Shareholders will sell their Offer Shares to the Offeror free from all Encumbrances and with all rights attached to them including but not limited to the rights to receive all dividends and distribution declared, paid or made, if any, on or after the date of this joint announcement.
Dealings in the Company’s securities
Save for the transactions under the S&P Agreement including the Undertaking, none of the Offeror and parties acting in concert with it has dealt in the Shares and any outstanding options, derivatives, warrants or other securities convertible into Shares during the period commencing six months preceding the commencement of the Offer period i.e. the date of the announcement of the Company dated 21 December 2010 up to and including the date of this joint announcement.
As at the date of this joint announcement, the Offeror and parties acting in concert with it have not entered into any arrangements or contracts in relation to the outstanding derivatives in respect of securities in the Company.
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Stamp duty
In Hong Kong, seller’s ad valorem stamp duty arising in connection with acceptances of the Offer will be payable by relevant Shareholders at a rate of 0.1% of: (i) the market value of the Offer Shares; or (ii) the consideration payable by the Offeror in respect of the relevant acceptances of the Offer, whichever is higher, and will be deducted from the cash amount payable by the Offeror on behalf of the relevant Shareholders accepting the Offer. The Offeror will arrange for payment of the seller’s ad valorem stamp duty on behalf of the relevant Shareholders accepting the Offer and will pay the buyer’s ad valorem stamp duty in connection with the acceptances of the Offer and the transfers of the Offer Shares in accordance with the Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong).
Payment
Payment in cash in respect of acceptances of the Offer will be made as soon as possible but in any event within 10 days of the date on which the relevant documents of title are received by the Offeror to render each such acceptance complete and valid.
Other arrangements
As at the date of this joint announcement,
-
(i) there is no arrangement (whether by way of option, indemnity or otherwise) of the kind referred to in Note 8 to Rule 22 of the Takeovers Code in relation to the shares of the Offeror or the Shares and which might be material to the Offer;
-
(ii) save for the transactions under the S&P Agreement including the Undertaking, there is no agreement or arrangement to which the Offeror is a party which relates to circumstances in which it may or may not invoke or seek to invoke a pre-condition or a condition to the Offer;
-
(iii) none of the Offeror and parties acting in concert with it has received any irrevocable commitment to accept the Offer; and
-
(iv) none of the Offeror and parties acting in concert with it has borrowed or lent any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) in the Company.
Overseas Shareholders
Shareholders who have registered addresses outside Hong Kong and wish to accept the Offer should satisfy themselves as to the full observance of the applicable laws and regulations of the relevant jurisdiction in connection therewith (including the obtaining of any governmental or other consent which may be required or the compliance with other necessary formalities and the payment of any transfer of other taxes due by such accepting Shareholders in respect of such jurisdiction).
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SHAREHOLDING STRUCTURE OF THE COMPANY
Set out below is the shareholding structure of the Company in terms of voting rights attached to the issued Shares immediately before the date of the S&P Agreement, as at the date of this joint announcement and during the Undertaking Period, and immediately after Completion (assuming there will be no other changes to the shareholding structure of the Company from the date of this joint announcement to the date of Completion and excluding any Offer Shares tendered for acceptances under the Offer):
| Shareholders The Vendor The Offeror, the Purchasers and parties acting in concert with any of them_(note)_ Public Shareholders |
Immediately before the date of the S&P Agreement Voting rights Approx. % 605,290,886 33.94% 719,102,563 40.32% 459,017,358 25.74% 1,783,410,807 100.00% |
As at the date of this joint announcement and during the Undertaking Period Voting rights Approx. % 423,703,620 23.76% 900,689,829 50.50% 459,017,358 25.74% 1,783,410,807 100.00% |
Immediately after Completion Voting rights Approx. % – – 1,324,393,449 74.26% 459,017,358 25.74% 1,783,410,807 100.00% |
Immediately after Completion Voting rights Approx. % – – 1,324,393,449 74.26% 459,017,358 25.74% 1,783,410,807 100.00% |
|---|---|---|---|---|
| 100.00% |
Set out below is the shareholding structure of the Company in terms of legal and benefi cial interests of the issued Shares immediately before the date of the S&P Agreement, as at the date of this joint announcement and during the Undertaking Period, and immediately after Completion (assuming there will be no other changes to the shareholding structure of the Company from the date of this joint announcement to the date of Completion and excluding any Offer Shares tendered for acceptances under the Offer):
| As at the date of | this joint | ||||||
|---|---|---|---|---|---|---|---|
| Immediately before the date | announcement and during | Immediately after | |||||
| of the S&P Agreement | the Undertaking Period | Completion | |||||
| Shareholders | Number of Shares | Approx. % | Number of Shares | Approx. % | Number of Shares | Approx. % | |
| The Vendor | 605,290,886 | 33.94% | 605,290,886 | 33.94% | – | – | |
| The Offeror, the | 719,102,563 | 40.32% | 719,102,563 | 40.32% | 1,324,393,449 | 74.26% | |
| Purchasers and | |||||||
| parties acting in | |||||||
| concert with any | |||||||
| of them_(note)_ | |||||||
| Public | 459,017,358 | 25.74% | 459,017,358 | 25.74% | 459,017,358 | 25.74% | |
| Shareholders | |||||||
| 1,783,410,807 | 100.00% | 1,783,410,807 | 100.00% | 1,783,410,807 | 100.00% |
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Note: As at the date of this joint announcement, 719,102,563 Shares are directly owned as to 564,102,563 Shares by Sureplan Limited, as to 77,500,000 Shares by Profit Channel and as to 77,500,000 Shares by Extra Benefit.
Sureplan Limited is owned as to 25% by First Linkup Development Limited, 50% by Profit Channel and 25% by Extra Benefit, each of which is in turn wholly owned by Mr. WU Chiu Kong, Mr. Yang and Mr. Xu respectively. Mr. Wu Chiu Kong is a director of Sureplan Limited and is presumed to be acting in concert with the Purchasers. He has extensive experience in investment and international trading.
Profit Channel and Extra Benefit are together the Purchasers. The Offeror (which is owned as to 50% by Mr. Yang and as to 50% by Mr. Xu) does not own any Share as at the date of this joint announcement.
INFORMATION ON THE OFFEROR
The Offeror is an investment holding company incorporated in the BVI with limited liability and is owned as to 50% by Mr. Yang and as to 50% by Mr. Xu. Mr. Yang and Mr. Xu are the only two directors of the Offeror. The Offeror has not conducted any business since its incorporation on 19 April 2011. As at the date of this joint announcement, the Offeror does not own any Share.
Mr. Yang was appointed to the Board on 6 February 2009 and has been the Managing Director of the Company since 11 February 2009. As at the date of this joint announcement, Profit Channel is wholly and beneficially owned by Mr. Yang, which directly holds 77,500,000 Shares and a 50% interest in Sureplan Limited. In turn, Sureplan Limited directly owns 564,102,563 Shares.
Mr. Xu was appointed to the Board on 10 June 2009 and has been the Executive Deputy Chairman of the Company since 30 July 2009. As at the date of this joint announcement, Extra Benefit is wholly and beneficially owned by Mr. Xu, which directly holds 77,500,000 Shares and a 25% interest in Sureplan Limited. In turn, Sureplan Limited directly owns 564,102,563 Shares.
As at the date of this joint announcement, the voting rights attached to 900,689,829 Shares, representing approximately 50.50% of the total voting rights attached to all the issued Shares, are owned or controlled or directed by the Offeror and parties acting in concert with it. Further details regarding the shareholdings of the Offeror, the Purchasers and parties acting in concert with any of them in the Company are set out in the section headed “Shareholding structure of the Company” in this joint announcement.
INFORMATION ON THE GROUP
The Company is an investment holding company incorporated in Hong Kong with limited liability and, through its subsidiaries, is principally engaged in research and development, production and sale of pharmaceutical products in the PRC.
The Group recorded audited profits attributable to Shareholders of approximately HK$44,054,000 and HK$60,925,000 for the financial years ended 31 December 2009 and 2010 respectively. The audited consolidated net asset value attributable to Shareholders as at 31 December 2010 was approximately HK$835,659,000.
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INTENTION OF THE OFFEROR AND THE PURCHASERS IN RELATION TO THE GROUP
It is the intention of the Offeror and the Purchasers that the Group will continue with its existing principal businesses. The Offeror and the Purchasers do not intend to introduce any major changes to the existing operations and business of the Company (including the composition of the Board). The Offeror and the Purchasers will conduct a review on the operations of the Group and subject to the result of the review, the Offeror and the Purchasers may formulate a business strategy with a view to enhancing its growth. The Offeror and the Purchasers have no intention to discontinue the employment of the employees or to dispose of or deploy the assets of the Group other than those in its ordinary course of business. As at the date of this joint announcement, the Offeror and the Purchasers have no intention or plans for any acquisition or disposal of assets and/or business by the Group.
MAINTAINENCE OF THE LISTING STATUS OF THE COMPANY
The Offeror intends to maintain the listing of the Shares on the Stock Exchange after the close of the Offer and will undertake to the Stock Exchange to take appropriate steps as soon as possible following the close of the Offer to ensure that a sufficient public float exists for the Shares.
The Stock Exchange has stated that if, upon the close of the Offer, less than the minimum prescribed percentage applicable to the Company, being 25%, of the issued Shares are held by the public or if the Stock Exchange believes that: (i) a false market exists or may exist in the trading of the Shares; or (ii) there are insufficient Shares in public hands to maintain an orderly market, then it will consider exercising its discretion to suspend trading in the Shares.
GENERAL
The Independent Board Committee and the Independent Financial Adviser
Rule 2.8 of the Takeovers Code requires the Company to establish an independent committee of the Board to give a recommendation to the Independent Shareholders on the Offer and that such independent committee should comprise all the non-executive Directors who have no direct or indirect interest in the Offer other than as a Shareholder. Mr. Du was the chairman of Foshan Public Utilities from July 2006 to December 2008 and is currently a 調研員 (senior consultant[#] ) of Foshan Public Utilities. Foshan Public Utilities, through its wholly-owned subsidiary, Foshan Overseas Investment Limited ( 佛山海外投資有限公司 *), holds the entire issued share capital of the Vendor. In view of the role of Mr. Du in Foshan Public Utilities, the Directors consider that it is more appropriate that Mr. Du does not sit on the Independent Board Committee. Accordingly, the Independent Board Committee comprising all the independent non-executive Directors has been established to advise the Independent Shareholders in respect of the Offer, in particular as to whether the Offer is, or is not, fair and reasonable and as to its acceptance.
The Independent Financial Adviser will be appointed by the Company after approval by the Independent Board Committee to advise the Independent Board Committee in respect of the Offer and in particular as to whether the Offer is, or is not, fair and reasonable and as to its acceptance. Further announcement will be made by the Company regarding the appointment of the Independent Financial Adviser as soon as practicable.
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Despatch of the composite document
It is the intention of the Offeror and the Company to combine the offer document from the Offeror with the offeree board circular from the Company in a composite document. In accordance with Rule 8.2 of the Takeovers Code, the composite document containing, among other things: (i) details of the Offer (including the expected timetable); (ii) a letter of recommendation from the Independent Board Committee to the Independent Shareholders in relation to the Offer; and (iii) a letter of advice from the Independent Financial Adviser to the Independent Board Committee in relation to the Offer, together with the relevant form of acceptance and transfer, is required to be despatched to the Shareholders within 21 days of the date of this joint announcement.
Dealings disclosure
In accordance with Rule 3.8 of the Takeovers Code, associates (as defined under the Takeovers Code) of the Company and the Offeror (including persons who own or control 5% or more of any class of relevant securities issued by the Company or the Offeror) are hereby reminded to disclose their dealings in the securities of the Company pursuant to the Takeovers Code.
In accordance with Rule 3.8 of the Takeovers Code, the full text of Note 11 to Rule 22 of the Takeovers Code is reproduced below:
“Responsibilities of stockbrokers, banks and other intermediaries
Stockbrokers, banks and others who deal in relevant securities on behalf of clients have a general duty to ensure, so far as they are able, that those clients are aware of the disclosure obligations attaching to associates and other persons under Rule 22 of the Takeovers Code and that those clients are willing to comply with them. Principal traders and dealers who deal directly with investors should, in appropriate cases, likewise draw attention to the relevant rules of the Takeovers Code. However, this does not apply when the total value of dealings (excluding stamp duty and commission) in any relevant security undertaken for a client during any 7 day period is less than HK$1 million.
This dispensation does not alter the obligation of principals, associates and other persons themselves to initiate disclosure of their own dealings, whatever total value is involved.
Intermediates are expected to co-operate with the Executive in its dealings enquiries. Therefore, those who deal in relevant securities should appreciate that stockbrokers and other intermediates will supply the Executive with relevant information as to those dealings, including identities of clients, as part of that co-operation.”
WARNING
The Directors make no recommendation as to the fairness or reasonableness of the Offer or as to the acceptance of the Offer in this joint announcement, and strongly recommend the Independent Shareholders not to form a view on the Offer unless and until they have received and read the composite document, including the recommendation of the Independent Board Committee in respect of the Offer and the letter of advice from the Independent Financial Adviser.
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Shareholders and potential investors are advised to exercise caution when dealing in the Shares, and if they are in any doubt about their position, they should consult their professional advisers.
SUSPENSION AND RESUMPTION OF TRADING
At the request of the Company, trading in the Shares on the Stock Exchange was suspended with effect from 9:00 a.m. on 20 May 2011 pending the release of this joint announcement. An application has been made by the Company to the Stock Exchange for the resumption of trading in the Shares on the Stock Exchange with effect from 9:00 a.m. on 30 May 2011.
DEFINITIONS
In this joint announcement, the following expressions have the meanings set out below unless the context requires otherwise:
| “acting in concert” | has the meaning ascribed thereto in the Takeovers Code |
|---|---|
| “Board” | the board of Directors |
| “BVI” | British Virgin Islands |
| “Company” | Winteam Pharmaceutical Group Limited (盈天醫藥集團有限公司), a |
| company incorporated in Hong Kong with limited liability, the issued | |
| Shares of which are listed on the Main Board of the Stock Exchange | |
| “Completion” | completion of the sale and purchase of the Sale Shares in accordance |
| with the terms and conditions of the S&P Agreement | |
| “Consideration” | the total consideration of HK$680,952,246.75 (inclusive of the First |
| Instalment) payable by the Purchasers to the Vendor for the Sale Shares | |
| “Directors” | directors of the Company |
| “Encumbrances” | any mortgage, charge, pledge, lien, (otherwise than arising by statute |
| or operation of law), equities, hypothecation or other encumbrance, | |
| priority or security interest, deferred purchase, title retention, leasing, | |
| sale-and-repurchase or sale-and-leaseback arrangement whatsoever over | |
| or in any property, assets or rights of whatsoever nature and includes | |
| any agreement for any of the same | |
| “Extra Benefit” | Extra Benefit Corp., a company incorporated in the BVI with limited |
| liability and wholly and beneficially owned by Mr. Xu | |
| “Facility” | a standby loan facility of up to HK$466,000,000, which is secured by |
| the personal guarantees of Mr. Yang and Mr. Xu including 578,076,922 | |
| Shares legally and beneficially owned by Mr. Yang and Mr. Xu, granted | |
| by Shenyin Wanguo Securities (H.K.) Limited to the Offeror |
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| “First Instalment” | HK$204,285,674.03, representing 30% of the Consideration |
|---|---|
| “Foshan Public Utilities” | 佛山市公用事業控股有限公司(Foshan Public Utilities Holding Co., |
| Ltd.*), a company incorporated in the PRC with limited liability whose | |
| ultimate beneficial owner is佛山市人民政府(Foshan Municipal | |
| People’s Government), and which holds the entire issued share capital | |
| of the Vendor through its wholly-owned subsidiary, Foshan Overseas | |
| Investment Limited (佛山海外投資有限公司*) | |
| “Group” | the Company and its subsidiaries |
| “Hong Kong” | Hong Kong Special Administrative Region of the PRC |
| “Independent Board | the independent committee of the Board comprising all the independent |
| Committee” | non-executive Directors, namely Messrs. LO Wing Yat, PANG |
| Fu Keung, WANG Bo and ZHANG Jianhui, established to give a | |
| recommendation to the Independent Shareholders regarding the terms of | |
| the Offer | |
| “Independent Financial | the independent financial adviser to be appointed by the Company for |
| Adviser” | the purpose of advising the Independent Board Committee in respect of |
| the Offer | |
| “Independent Shareholders” | Shareholders other than the Offeror and parties acting in concert with it |
| “Mr. Du” | 杜日成先生(Mr. DU Richeng), the non-executive Director and the |
| Chairman of the Company | |
| “Mr. Xu” | 徐鉄峰先生(Mr. XU Tiefeng), an executive Director, the Executive |
| Deputy Chairman of the Company and a substantial shareholder of the | |
| Company (as defined in the Takeovers Code and the Listing Rules, | |
| and details of his shareholding in the Company are set out in the | |
| section headed “Shareholding structure of the Company” in this joint | |
| announcement) | |
| “Mr. Yang” | 楊斌先生(Mr. YANG Bin), an executive Director, the Managing |
| Director of the Company and a substantial shareholder of the Company | |
| (as defined in the Takeovers Code and the Listing Rules, and details | |
| of his shareholding in the Company are set out in the section headed | |
| “Shareholding structure of the Company” in this joint announcement) | |
| “Last Trading Day” | 19 May 2011, being the last trading day of the Shares immediately prior |
| to the suspension of trading in the Shares on the Stock Exchange at 9:00 | |
| a.m. on 20 May 2011 | |
| “Listing Rules” | the Rules Governing the Listing of Securities on the Stock Exchange |
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| “Offer” | the unconditional mandatory cash offer to be made by Shenyin Wanguo |
|---|---|
| Securities (H.K.) Limited for and on behalf of the Offeror for all the | |
| issued Shares (other than those already owned or agreed to be acquired | |
| by the Offeror and parties acting in concert with it) pursuant to Rule | |
| 26.1(d) of the Takeovers Code | |
| “Offer Price” | the price at which the Offer will be made, being HK$1.125 per Offer |
| Share | |
| “Offer Share(s)” | issued Share(s) other than those already owned or agreed to be acquired |
| by the Offeror and parties acting in concert with it | |
| “Offeror” | Profit United Investments Limited, a company incorporated in the BVI |
| with limited liability on 19 April 2011 and legally and beneficially | |
| owned as to 50% by Mr. Yang and as to 50% by Mr. Xu | |
| “PRC” | the People’s Republic of China which, for the purpose of this |
| joint announcement, shall exclude Hong Kong, the Macau Special | |
| Administrative Region of the PRC and Taiwan | |
| “Profit Channel” | Profit Channel Development Limited, a company incorporated in |
| the BVI with limited liability and wholly and beneficially owned by | |
| Mr. Yang | |
| “Purchasers” | together (i) Profit Channel; and (ii) Extra Benefit |
| “S&P Agreement” | the sale and purchase agreement dated 19 May 2011 entered into |
| between the Purchasers and the Vendor in relation to the sale and | |
| purchase of the Sale Shares | |
| “Sale Shares” | the legal and beneficial interests of 605,290,886 Shares representing the |
| entire shareholding interests in the Company owned by the Vendor as at | |
| the date of this joint announcement | |
| “Share(s)” | ordinary share(s) of HK$0.10 each in the issued share capital of the |
| Company | |
| “Shareholders” | holders of the Shares |
| “Stock Exchange” | The Stock Exchange of Hong Kong Limited |
| “Takeovers Code” | the Hong Kong Code on Takeovers and Mergers |
| “trading day” | a day on which the Stock Exchange is open for business of dealing in |
| securities | |
| “Undertaking” | the irrevocable undertaking given by the Vendor on 19 May 2011 in |
| favour of the Purchasers as one of the terms of the S&P Agreement | |
| pursuant to which the voting rights attached to 181,587,266 Shares are | |
| vested upon the Purchasers during the Undertaking Period |
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“Undertaking Period” the period from the date of the Undertaking i.e. 19 May 2011 until the earlier of the date on which: (i) Completion takes place; and (ii) the S&P Agreement is terminated
“Vendor” Hensil Investments Group Limited, a company incorporated in the BVI with limited liability and directly, legally and beneficially interested in the Sale Shares, representing approximately 33.94% of the total issued Shares as at the date of this joint announcement “HK$” Hong Kong dollars, the lawful currency of Hong Kong “%” per cent.
By Order of the board of directors of By Order of the Board Profit United Investments Limited Winteam Pharmaceutical Group Limited XU Tiefeng DU Richeng Director Chairman
Hong Kong, 27 May 2011
As at the date of this joint announcement, the directors of the Offeror are Mr. Yang and Mr. Xu.
As at the date of this joint announcement, the Board comprises nine Directors, of which Mr. Du is a nonexecutive Director; Mr. Yang, Mr. Xu, Mr. SITU Min and Mr. LI Songquan are executive Directors; and Mr. LO Wing Yat, Mr. PANG Fu Keung, Mr. WANG Bo and Mr. ZHANG Jianhui are independent nonexecutive Directors.
All Directors jointly and severally accept full responsibility for the accuracy of the information contained in this joint announcement (other than the information relating to the Offeror and the Purchasers), and confirm, having made all reasonable enquires, that to the best of their knowledge, opinions expressed in this joint announcement (other than those expressed by the Offeror and the Purchasers) have been arrived at after due and careful consideration and there are no other facts not contained in this joint announcement, the omission of which would make any statement contained in this joint announcement misleading.
All the directors of the Offeror jointly and severally accept full responsibility for the accuracy of the information contained in this joint announcement (other than the information relating to the Group and the Vendor), and confirm, having made all reasonable enquires, that to the best of their knowledge, opinions expressed in this joint announcement (other than those expressed by the Group and the Vendor) have been arrived at after due and careful consideration and there are no other facts not contained in this joint announcement, the omission of which would make any statement contained in this joint announcement misleading.
* for identification purposes only
# an unofficial translation
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