Standard Chartered PLC — M&A Activity 2004

Jun 28, 2004

Standard Chartered PLC

Standard Chartered PLC

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.

Standard Chartered PLC

(渣打集團有限公司)

(Registered in England and Wales number 966425)

(Stock Code: 2888)

CONNECTED TRANSACTION

Acquisition of Advantage Limited by Standard Chartered PLC

Standard Chartered announces that on 28 June 2004 Standard Chartered Links (HK) Limited, a wholly owned subsidiary of Standard Chartered, entered into an agreement to acquire the entire issued share capital of Advantage from Goland Investment Limited, Winsgreat Limited (a wholly owned subsidiary of SHK) and Warshall Holdings Limited (a wholly owned subsidiary of Chinavest V.L.P.). Advantage is the holding company of PCL and PCAL, whose principal business is the provision of sub-prime credit in Hong Kong.

Mr Raymond Kwok, one of the directors of Standard Chartered Bank (Hong Kong) Limited (a wholly owned subsidiary of Standard Chartered), is deemed to be interested (within the meaning of Part XV of the SFO) in 44.96% of the shares in SHK, which in turn owns all the shares in Winsgreat Limited. Accordingly, Winsgreat is an associate of Mr Kwok and the acquisition of Winsgreat's shares in Advantage is a connected transaction for Standard Chartered.

Standard Chartered PLC

29-6-2004

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Standard Chartered PLC

Each of the percentage ratios set out in Rule 14.07 of the Listing Rules is less than 2.5%. As such, the transaction falls within Rule 14.A32(1) and is subject to reporting and announcement requirements but is exempt from independent shareholder approval requirements. Details of the transaction will also be included in Standard Chartered's next annual report and accounts in accordance with Rule 14A.45.

Completion of the Transaction is subject to a number of conditions, including the approval of the Hong Kong Monetary Authority.

DETAILS OF THE AGREEMENT

Date: 28 June 2004

Parties: Goland Investment Limited, Winsgreat Limited (a wholly owned subsidiary of SHK) and Warshall Holdings Limited (a wholly owned subsidiary of Chinavest V.L.P.) as vendors together with Yap E. Hock, Geoffrey Mansfield and Lo Kai Yiu, Anthony.

Standard Chartered Links (HK) Limited, a wholly owned subsidiary of Standard Chartered, as purchaser.

Assets acquired: The entire issued share capital of Advantage. (Goland Investment Limited (31%), Winsgreat Limited (46.5%) and Warshall Holdings Limited (22.5%).)

Consideration and Payment Terms

The total consideration payable for the Shares is calculated as a multiple of the audited net book value of Advantage as at 30 June 2004, adjusted to reflect the current market value of certain properties and any shortfall in the net assets of an associated company, ("Consideration") and is estimated (pending audit) to be approximately HK$980 million. A deposit of HK$100 million has been paid by the Purchaser on signing of the Agreement. An amount equal to ninety per cent. of the Consideration (less the deposit) will be paid in cash on completion of the Agreement (which is expected to be by 30 September 2004) with the balance payable on 31 December 2005.

Standard Chartered PLC
29-6-2004

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Standard Chartered PLC

The consideration will be fully funded from Standard Chartered's internal resources.

INFORMATION ON ADVANTAGE

Advantage is a Hong Kong based holding company with two principal operating subsidiaries, PCL and PCAL.

PCL was established in 1978, and has delivered fixed deposit and consumer finance services for more than 20 years. PCL is an authorised institution operating as a deposit taking company regulated by the Hong Kong Monetary Authority.

PCAL is registered as a money lender under the Money Lenders Ordinance. Its principal business is providing personal loans.

Based on the audited consolidated financial statements of Advantage for the year ended 31 December 2003, Advantage had a net book asset value of HK$495.6 million. Based on the audited consolidated financial statements of Advantage for the years ended 31 December 2002 and 2003, the net profits of Advantage before taxation and extraordinary items for those years was HK$24.4 million and HK$29.2 million respectively, and the net profits of Advantage after taxation and extraordinary items for those years was HK$20.5 million and HK$23.4 million respectively.

REASONS FOR ACQUISITION

The acquisition broadens Standard Chartered's customer base in one of its core markets into a segment with strong revenue growth and returns. The senior management of Advantage will remain in place following completion of the Agreement. This will help Standard Chartered to expand further into the consumer finance sector regionally.

GENERAL

Standard Chartered is a holding company co-ordinating the activities of its subsidiary and associated companies which are principally engaged in the business of banking and other financial services across the Asia Pacific Region, South Asia, the Middle East, Africa, the United Kingdom and the Americas.

Standard Chartered PLC
29-6-2004

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Standard Chartered PLC

Each of Goland Investment Limited, Winsgreat Limited and Warshall Holdings Limited are special purpose companies established to hold shares in Advantage. Winsgreat Limited is a wholly owned subsidiary of SHK, whose core business is property development and investment in Hong Kong and which is listed on the Stock Exchange. Warshall Holdings Limited is a wholly owned subsidiary of Chinavest V.L.P., a US investment fund. Goland Investment Limited is owned by, amongst others, certain members of the management of Advantage.

Completion of the Transaction is subject to a number of conditions, including the approval of the Hong Kong Monetary Authority.

As at the date of this announcement, the Board of Standard Chartered comprises:

Executive Directors – Mr. Bryan Kaye Sanderson, CBE; Mr. Evan Mervyn Davies, CBE; Mr. Michael Bernard DeNoma; Mr. Christopher Avedis Keljik; Mr. Richard Henry Meddings; Mr. Kaikhushru Shiavax Nargolwala; Mr. Peter Alexander Sands; and

Independent Non-Executive Directors – Sir CK Chow; Mr. James Frederick Trevor Dundas, Mr. Ho KwonPing; Mr. Rudolph Harold Peter Markham; Ms. Ruth Markland; Mr. Hugh Edward Norton; Mr. Paul David Skinner; Mr. Oliver Henry James Stocken.

The Directors, including the independent non-executive directors of Standard Chartered, have considered the Transaction and are of the opinion that the Transaction and its terms are on normal commercial terms, are fair and reasonable and in the interests of the shareholders of Standard Chartered as a whole.

REGULATORY

Mr Raymond Kwok, one of the directors of Standard Chartered Bank (Hong Kong) Limited (a wholly owned subsidiary of Standard Chartered), is deemed to be interested (within the meaning of Part XV of the SFO) in 44.96% of the shares in SHK, which in turn owns all the shares in Winsgreat Limited. Accordingly, Winsgreat is an associate of Mr Kwok and the acquisition of Winsgreat shares in the Company is a connected transaction for Standard Chartered.

Standard Chartered PLC
29-6-2004

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Standard Chartered PLC
29-6-2004

Standard Chartered PLC

Each of the percentage ratios set out in Rule 14.07 of the Listing Rules is less than 2.5%. As such, the transaction falls within Rule 14.A32(1) and is subject to reporting and announcement requirements but is exempt from independent shareholder approval requirements. Details of the transaction will also be included in Standard Chartered's next annual report and accounts in accordance with Rule 14A.45.

Winsgreat holds 46.5 per cent of the Shares. The original cost to Winsgreat Limited for its shareholding in Advantage was HK$120 million.

Other than Winsgreat, to the best of the Directors' knowledge, information and belief having made all reasonable enquiries, the other parties to the Agreement and their ultimate beneficial owners are third parties independent of Standard Chartered and its connected persons (as defined in the Listing Rules).

DEFINITIONS

Advantage	Advantage Limited
Agreement	the agreement dated 28 June 2004 between Goland Investment Limited, Winsgreat Limited, Warshall Holdings Limited, certain members of management and Standard Chartered Links (HK) Limited in relation to the purchase of all the Shares
Directors	the directors of Standard Chartered
Listing Rules	Rules Governing the Listing of Securities on the Stock Exchange
PCAL	PrimeCredit Asia Limited
PCL	PrimeCredit Limited
Purchaser	Standard Chartered Links (HK) Limited
SFO	Securities and Futures Ordinance (Cap 571 of the Laws of Hong Kong)
Shares	ordinary shares of Advantage Limited
SHK	Sun Hung Kai Properties Limited (shares of which are listed on the Stock Exchange)

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Standard Chartered PLC

Standard Chartered Standard Chartered PLC (shares of which are listed on the Stock Exchange)

Stock Exchange The Stock Exchange of Hong Kong Limited

Transaction the acquisition of all the Shares pursuant to the Agreement

By Order of the Board
David J. Brimacombe
Company Secretary

Hong Kong, 28 June 2004

Please also refer to the published version of this announcement in South China Morning Post dated 29 June 2004.

Standard Chartered PLC
29-6-2004