Transmit Entertainment Limited — M&A Activity 2017

Nov 14, 2017

THIS OFFER DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of the Offer, this Offer Document and/or the accompanying Form of Acceptance or as to the action to be taken, you should consult your licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your securities in or of Pegasus Entertainment Holdings Limited, you should at once hand this Offer Document and the accompanying Form of Acceptance to the purchaser(s) or the transferee(s) or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or the transferee(s).

This Offer Document should be read in conjunction with the accompanying Form of Acceptance, the contents of which form part of the terms of the Offer contained in this Offer Document.

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this Offer Document and the accompanying Form of Acceptance, make no representation as to their 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 Offer Document and the accompanying Form of Acceptance.

NICE RICH GROUP LIMITED

(incorporated in the British Virgin Islands with limited liability)

OFFER DOCUMENT IN RELATION TO MANDATORY UNCONDITIONAL CASH OFFER BY

FOR AND ON BEHALF OF NICE RICH GROUP LIMITED TO ACQUIRE ALL ISSUED SHARES OF PEGASUS ENTERTAINMENT HOLDINGS LIMITED (OTHER THAN THOSE ALREADY OWNED BY OR TO BE ACQUIRED BY NICE RICH GROUP LIMITED AND PARTIES ACTING IN CONCERT WITH IT)

Financial adviser to the Offeror

Capitalised terms used in this cover page shall have the same meanings as those defined in the section headed ‘‘DEFINITIONS’’ in this Offer Document.

A letter from Kingston Securities containing, amongst other things, details of the terms of the Offer are set out on pages 6 to 12 of this Offer Document.

The procedures for acceptance and settlement of the Offer are set out in Appendix I to this Offer Document and in the accompanying Form of Acceptance.

Acceptances of the Offer should be received by the Registrar by no later than 4:00 p.m. on 13 December 2017 or such later time and/or date as the Offeror may determine and announce with the consent of the Executive, in accordance with the Takeovers Code.

15 November 2017

TABLE OF CONTENTS

	Page
EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM KINGSTON SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
APPENDIX I — FURTHER TERMS OF THE OFFER AND
PROCEDURES FOR ACCEPTANCE . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
APPENDIX II— GENERAL INFORMATION OF THE OFFEROR . . . . . . . . . . . . . . . .	II-1
ACCOMPANYING DOCUMENT — FORM OF ACCEPTANCE

– i –

EXPECTED TIMETABLE

The timetable set out below is indicative and may be subject to change. Any changes to the timetable will be announced by the Offeror as soon as practicable. All the time and date references contained in this Offer Document refer to Hong Kong local time and dates.

Event	Timeline
	2017
Despatch date of this Offer Document and
the accompanying Form of Acceptance and
the commencement of the Offer (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 15 November
Latest date for the posting of
the Response Document (Note 2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 29 November
Closing Date (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 13 December
Latest time and date for acceptance of
the Offer (Notes 3 and 5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . by 4:00 p.m.
	on Wednesday, 13 December
Announcement of the results of the Offer to
be published on the website of the Stock Exchange
and the Company (Note 3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . by 7:00 p.m.
	on Wednesday, 13 December
Latest date of posting of remittances
in respect of valid acceptances received
under the Offer (Notes 4 and 5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 22 December

Notes:

1. The Offer, which is unconditional, is made on Wednesday, 15 November 2017, being the date of posting of this Offer Document, and is capable for acceptance on and from that date. Acceptances of the Offer shall be irrevocable and not capable of being withdrawn, except in the circumstances set out in paragraph headed ‘‘5. RIGHT OF WITHDRAWAL’’ in Appendix I to this Offer Document.

2. In accordance with the Takeovers Code, the Company is required to post the Response Document within 14 days from the posting of this Offer Document, unless the Executive consents to a later date and the Offeror agrees to extend the closing date by the number of days in respect of which the delay in the posting of the Response Document is agreed.

3. In accordance with the Takeovers Code, where the Response Document is posted after the date on which this Offer Document is posted, the Offer must initially be opened for acceptance for at least 28 days following the date on which this Offer Document is posted. The latest time for acceptance is at 4:00 p.m. on Wednesday, 13 December 2017 unless the Offeror revises or extends the Offer in accordance with the Takeovers Code. An announcement will be published on the websites of the Stock Exchange and the Company by 7:00 p.m. on Wednesday, 13 December 2017 stating whether the Offer has been extended, revised or expired. In the event that the Offeror decides to extend the Offer and the announcement does not specify the next closing date, at least 14 days’ notice by way of an announcement will be given before the Offer is closed in accordance with the Takeovers Code.

– ii –

EXPECTED TIMETABLE

1. Remittance in respect of the consideration payable for the Offer Shares tendered under the Offer will be posted by ordinary post to the Shareholders accepting the Offer at their own risk as soon as possible, but in any event within seven (7) Business Days following the date of receipt of all the relevant documents by the Registrar to render the acceptances complete and valid.

2. If there is a tropical cyclone warning signal number 8 or above, or a black rainstorm warning: (a) in force in Hong Kong at any local time before 12:00 noon but no longer in force after 12:00 noon on the latest date for acceptance of the Offer and the latest date for posting of remittances for the amounts due under the Offer in respect of valid acceptances, the latest time for acceptance of the Offer will remain at 4:00 p.m. on the same Business Day and the posting of the remittances will be made on the same Business Day; or (b) in force in Hong Kong at any local time between 12:00 noon and 4:00 p.m. on the latest date for acceptance of the Offer and the latest date for posting of remittances for the amounts due under the Offer in respect of valid acceptances, the latest time for acceptance of the Offer will be rescheduled to 4:00 p.m. on the following Business Day which does not have either of those warning in force at any time between 9:00 a.m. and 4:00 p.m. or such other day as the Executive may approve in accordance with the Takeovers Code and the posting of the remittances will be made on the following Business Day which does not have either of those warning in force at any time between 9:00 a.m. and 4:00 p.m..

Save as mentioned above, if the latest time for the acceptance of the Offer and posting of remittances do not take effect on the date and time as stated above, the other dates mentioned above may be affected. The Offeror and the Company will notify the Shareholders by way of announcement(s) on any change to the expected timetable as soon as practicable.

All times and dates in this Offer Document and the Form of Acceptance shall refer to Hong Kong local times and dates.

– iii –

DEFINITIONS

In this Offer Document, unless the context otherwise requires, the following expressions shall have the following meanings when used herein:

• ‘‘Acquisition’’

• the purchase of the Sale Shares by the Offeror from the Vendors in accordance with the terms and conditions of the Sale and Purchase Agreement

• ‘‘acting in concert’’ has the meaning ascribed thereto under the Takeovers Code

• ‘‘associate(s)’’ has the meaning ascribed thereto under the Takeovers Code

• ‘‘Board’’ the board of Directors

• ‘‘Business Day(s)’’ a day on which the Stock Exchange is open for the transaction of business

• ‘‘CCASS’’

• the Central Clearing and Settlement System established and operated by Hong Kong Securities Clearing Company Limited

• ‘‘Closing Date’’

• Wednesday, 13 December 2017, the closing date of the Offer, which is 28 days after the date on which this Offer Document is posted, or if the Offer is extended, any subsequent closing date of the Offer as extended and announced by the Offeror in accordance with the Takeovers Code

• ‘‘Company’’

• Pegasus Entertainment Holdings Limited, a company incorporated in the Cayman Islands with limited liability and the issued Shares of which are listed on the main board of the Stock Exchange (stock code: 1326)

• ‘‘Completion’’

• completion of the Acquisition in accordance with the terms and conditions of the Sale and Purchase Agreement

• ‘‘controlling shareholder’’ has the meaning ascribed thereto under the Listing Rules

• ‘‘Director(s)’’ the director(s) of the Company

• ‘‘Encumbrances’’

• any mortgage, charge, pledge, lien, option, restriction, right of first refusal, right of pre-emption, third-party right or interest, other encumbrance or security interest of any kind, or another type of preferential arrangement (including, without limitation, a title transfer or retention arrangement) having similar effect

• ‘‘Executive’’

• the Executive Director of the Corporate Finance Division of the SFC or any of its delegate

– 1 –

DEFINITIONS

• ‘‘Facility’’

• ‘‘Facility Agreement’’

• ‘‘Form of Acceptance’’

• ‘‘Group’’

• ‘‘HK$’’

• ‘‘Hong Kong’’

• ‘‘Honour Grace’’

• ‘‘Independent Board Committee’’

• ‘‘Initial Announcement’’

• ‘‘Joint Announcement (Completion)’’

a loan facility granted by Kingston Securities as lender to the Offeror as borrower in accordance with the terms of the Facility Agreement for financing the consideration payable under the Acquisition and the Offer

• the loan facility agreement entered into between Kingston Securities as lender and the Offeror as borrower dated 20 October 2017 regarding the Facility

• the form of acceptance and transfer of the Offer Shares in respect of the Offer which accompanies this Offer Document

• collectively, the Company and its subsidiaries from time to time

• Hong Kong dollars, the lawful currency of Hong Kong

• the Hong Kong Special Administrative Region of the PRC

• Honour Grace Limited, a company incorporated in the British Virgin Islands with limited liability (which was owned as to 60% by Mr. Wong, 20% by Ms. Wong Yee Kwan Alvina (an executive Director and the daughter of Mr. Wong) and 20% by Mr. Wong Chi Woon Edmond (an executive Director and the son of Mr. Wong)), one of the Vendors

• the independent committee of the Board, comprising all three independent non-executive Directors, namely Mr. Lam Kam Tong, Mr. Lo Eric Tien-cheuk and Mr. Tang Kai Kui Terence, established for the purpose of making a recommendation to the Shareholders in relation to the Offer

• the initial announcement of the Company dated 18 October 2017 pursuant to Rule 3.7 of the Takeovers Code on which the Offer Period commenced

• the joint announcement dated 27 October 2017 issued by the Offeror and the Company in relation to, amongst other things, the Completion in accordance with the terms and conditions of the Sale and Purchase Agreement

– 2 –

DEFINITIONS

• ‘‘Joint Announcement (SPA)’’ the joint announcement dated 25 October 2017 issued by the Offeror and the Company in relation to, amongst other things, the Acquisition and the Offer

• ‘‘Kingston Corporate Finance’’

• Kingston Corporate Finance Limited, a corporation licensed by the SFC to conduct Type 6 (advising on corporate finance) regulated activity under the SFO, being the financial adviser to the Offeror in respect of the Offer

• ‘‘Kingston Securities’’

• Kingston Securities Limited, a corporation licensed by the SFC to conduct Type 1 (dealing in securities) regulated activity under the SFO, being the agent making the Offer on behalf of the Offeror

• ‘‘Last Trading Day’’

• 20 October 2017, being the last day on which the Shares were traded on the Stock Exchange prior to the suspension of trading in the Shares pending the release of the Joint Announcement (SPA)

• ‘‘Latest Practicable Date’’

• 13 November 2017, being the latest practicable date prior to the printing of this Offer Document for the purpose of ascertaining certain information contained herein

• ‘‘Listing Rules’’

• the Rules Governing the Listing of Securities on the Stock Exchange

• ‘‘Mr. Wong’’ or the ‘‘Warrantor’’

• Mr. Wong Pak Ming, an executive Director, the chairman of the Board, a controlling shareholder of the Company before Completion, one of the Vendors, and the brother of Ms. Wong

• ‘‘Mr. Zhang’’ Mr. Zhang Liang Johnson, the sole shareholder and the sole director of the Offeror

• ‘‘Ms. Wong’’

• Ms. Wong Kit Fong, a Shareholder, one of the Vendors and the sister of Mr. Wong

• ‘‘Offer’’

• the mandatory unconditional cash offer made by Kingston Securities on behalf of the Offeror to acquire all issued Shares (other than those already owned by or to be acquired by the Offeror and parties acting in concert with it)

• ‘‘Offer Document’’ this Offer document issued by the Offeror to all Shareholders in connection with the Offer in accordance with the Takeovers Code, together with the Form of Acceptance

– 3 –

DEFINITIONS

• ‘‘Offer Period’’

• has the meaning ascribed to it under the Takeovers Code, being the period commencing from 18 October 2017 (i.e. the date of the Initial Announcement) and ending on the Closing Date

• ‘‘Offer Price’’

• HK$0.319 per Offer Share payable by the Offeror to the Shareholders for each Offer Share accepted under the Offer

• ‘‘Offer Shares(s)’’

• Share(s) not already owned or to be acquired by the Offeror and parties acting in concert with it

• ‘‘Offeror’’

• Nice Rich Group Limited, a company incorporated in the British Virgin Islands with limited liability

• ‘‘Overseas Shareholder(s)’’

• Shareholder(s) whose address(es), as shown on the register of members of the Company, are outside Hong Kong

• ‘‘Pledged Shares’’

• Sale Shares and the Offer Shares (as the case may be) to be deposited with Kingston Securities as collaterals for the Facility

• ‘‘PRC’’

• the People’s Republic of China, which for the purpose of this Offer Document, shall exclude Hong Kong, the Macau Special Administrative Region of the People’s Republic of China and Taiwan

• ‘‘Registrar’’ Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong

• ‘‘Relevant Period’’

• the period from 18 April 2017 (being the date falling six months prior to the date of the Initial Announcement) and up to and including the Latest Practicable Date

• ‘‘Response Document’’

• the document required to be issued by the Company to all the Shareholders in accordance with the Takeovers Code containing, amongst other things, a letter from the Board, a letter from the Independent Board Committee in relation to the Offer and a letter from the independent financial adviser in relation to the Offer

• ‘‘Sale and Purchase Agreement’’ the sale and purchase agreement dated 22 October 2017 and entered into amongst the Vendors, the Warrantor and the Offeror in relation to the sale and purchase of the Sale Shares

• ‘‘Sale Shares’’

• an aggregate of 1,523,808,000 Shares, being such number of Shares that the Vendors held or was otherwise interested prior to Completion, and a ‘‘Sale Share’’ means any of them

– 4 –

DEFINITIONS

‘‘SFC’’

the Securities and Futures Commission of Hong Kong

‘‘SFO’’

the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• ‘‘Share(s)’’ ordinary share(s) of HK$0.0025 each in the share capital of the Company

• ‘‘Shareholder(s)’’ holder(s) of the Share(s)

• ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

• ‘‘Takeovers Code’’ the Hong Kong Code on Takeovers and Mergers

• ‘‘Vendors’’ collectively, Honour Grace, Mr. Wong and Ms. Wong, and ‘‘Vendor’’ shall be construed accordingly

‘‘%’’

per cent

– 5 –

LETTER FROM KINGSTON SECURITIES

Suite 2801, 28th Floor, One International Finance Centre,

1 Harbour View Street, Central, Hong Kong

15 November 2017

To the Shareholders

Dear Sir/Madam,

MANDATORY UNCONDITIONAL CASH OFFER BY KINGSTON SECURITIES LIMITED FOR AND ON BEHALF OF NICE RICH GROUP LIMITED TO ACQUIRE ALL ISSUED SHARES OF PEGASUS ENTERTAINMENT HOLDINGS LIMITED (OTHER THAN THOSE ALREADY OWNED OR TO BE ACQUIRED BY

NICE RICH GROUP LIMITED AND PARTIES ACTING IN CONCERT WITH IT)

INTRODUCTION

References are made to the Initial Announcement, the Joint Announcement (SPA) and the Joint Announcement (Completion).

On 22 October 2017, the Offeror, the Vendors and the Warrantor entered into the Sale and Purchase Agreement, pursuant to which the Offeror has conditionally agreed to purchase and the Vendors have conditionally agreed to sell the Sale Shares. The aggregate consideration for the Sale Shares pursuant to the Sale and Purchase Agreement is HK$486,094,752, equivalent to HK$0.319 per Sale Share. Completion took place on 27 October 2017.

Immediately prior to Completion, none of the Offeror, Mr. Zhang and parties acting in concert with any of them own any Shares or any other convertible securities, options, warrants or derivatives in the Company. Immediately following Completion and as at the Latest Practicable Date, the Offeror owned in aggregate 1,523,808,000 Shares representing approximately 58.71% of the entire issued share capital of the Company. Pursuant to Rule 26.1 of the Takeovers Code, the Offeror is required to make a mandatory unconditional cash offer for 1,071,805,733 Shares, representing all the issued Shares not already owned or to be acquired by it and parties acting in concert with it.

This letter forms part of this Offer Document which sets out, amongst other things, the details of the Offer, information on the Offeror and the intention of the Offeror in relation to the Group. Further details of terms and procedures of acceptance of the Offer are set out in Appendix I to this Offer Document and the accompanying Form of Acceptance.

– 6 –

LETTER FROM KINGSTON SECURITIES

PRINCIPAL TERMS OF THE OFFER

Kingston Securities, on behalf of the Offeror, hereby makes the Offer in compliance with the Takeovers Code on the following basis:

The Offer Price

For every Offer Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$0.319 in cash

The Offer Price of HK$0.319 under the Offer is equal to the price per Sale Share paid by the Offeror under the Sale and Purchase Agreement.

The Offer is extended to all Shareholders in accordance with the Takeovers Code. The Offer Shares to be acquired under the Offer shall be fully paid and free from all Encumbrances and together with all rights and benefits attaching to them as at the date of this Offer Document or subsequently becoming attached to them, including without limitation the right to receive all dividends, distributions and any return of capital, which may be paid, made or declared or agreed to be made or paid by the Company thereon or in respect thereof on or after the date on which the Offer is made, being the date of this Offer Document.

Comparison of value

The Offer Price of HK$0.319 per Share represents:

• (i) a premium of 16.00% over the closing price of HK$0.275 per Share as quoted on the Stock Exchange on the last trading day immediately preceding the date of the Initial Announcement;

• (ii) a premium of approximately 13.93% over the closing price of HK$0.28 per Share as quoted on the Stock Exchange on the Last Trading Day;

• (iii) a premium of approximately 22.98% over the average closing price of HK$0.2594 per Share as quoted on the Stock Exchange for the five consecutive trading days up to and including the Last Trading Day;

• (iv) a discount of 0.3125% to the closing price of HK$0.32 per Share as quoted on the Stock Exchange on the Latest Practicable Date; and

• (v) a premium of approximately 165.83% over the audited consolidated net asset value per Share of approximately HK$0.12 as at 30 June 2017 (being the date of which the latest audited consolidated annual results of the Group were made up), calculated based on the Group’s audited consolidated net assets of approximately HK$307.74 million as at 30 June 2017 and 2,595,613,733 Shares in issue as at the date of the Joint Announcement (SPA).

– 7 –

LETTER FROM KINGSTON SECURITIES

Highest and lowest Share prices

During the Relevant Period, the highest closing price of the Shares as quoted on the Stock Exchange was HK$0.325 on 30 October 2017, 31 October 2017, 1 November 2017, 2 November 2017, 3 November 2017 and 8 November 2017, and the lowest closing price of the Shares as quoted on the Stock Exchange was HK$0.172 on 9 October 2017.

Value of the Offer and confirmation of financial resources available for the Offer

Immediately upon the Completion and as at the Latest Practicable Date, the Offeror held 1,523,808,000 Shares. Based on the Offer Price of HK$0.319 per Offer Share and the 1,071,805,733 Shares subject to the Offer, the total value of the Offer will be approximately HK$342 million.

The Offeror intends to finance the consideration under the Offer by approximately HK$346 million from the Loan Facility. The Offeror confirms that the repayment of the interest on, repayment of or security for any liability (contingent or otherwise) of the Facility will not depend on any significant extent on the business of the Company. The Pledged Shares would not result in the transfer of voting rights.

Kingston Corporate Finance, the financial adviser to the Offeror in respect of the Offer, is satisfied that sufficient financial resources are available to the Offeror to satisfy the Consideration and the full acceptance of the Offer.

Effects of accepting the Offer

The Offer is unconditional in all respects.

By accepting the Offer, the Shareholders will sell their Shares free from all Encumbrances and together with all rights accruing or attaching to them, including, without limitation, the right to receive all dividends and distributions which may be recommended, declared, made or paid, if any, at any time on or after the date on which the Offer is made, being the date of posting of this Offer Document. Acceptance of the Offer by any Shareholder will be deemed to constitute a warranty by such person that all Shares sold by such person under the Offer are free from all Encumbrances and together with all rights accruing or attaching to them, including, without limitation, the right to receive all dividends and distributions which may be recommended, declared, made or paid, if any, at any time on or after the date on which the Offer is made (i.e. the date of this Offer Document).

Acceptances of the Offer shall be irrevocable and not capable of being withdrawn, except in circumstances set out in paragraph headed ‘‘5. RIGHT OF WITHDRAWAL’’ in Appendix I to this Offer Document.

– 8 –

LETTER FROM KINGSTON SECURITIES

Hong Kong stamp duty

Seller’s Hong Kong ad valorem stamp duty arising in connection with acceptance of the Offer amounting to 0.1% of the amount payable in respect of relevant acceptances by the Shareholders, or if higher, the market value of the Shares as determined by the Collector of Stamp Revenue under the Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong), will be deducted from the cash amount payable to the Shareholders who accept 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 Hong Kong ad valorem stamp duty in connection with the acceptance of the Offer.

Payment

Payment in cash in respect of acceptances of the Offer will be made as soon as possible but in any event within seven (7) Business Days following the date of the receipt of all relevant documents by the Registrar to render each such acceptance complete and valid.

No fractions of a cent will be payable and the amount of cash consideration payable to a Shareholder who accepts the Offer will be rounded up to the nearest cent.

Taxation advice

The Shareholders are recommended to consult their own professional advisers if they are in any doubt as to the taxation implications of accepting or rejecting the Offer. None of the Offeror, parties acting in concert with it, Kingston Securities, Kingston Corporate Finance or their respective ultimate beneficial owners, directors, officers, agents or associates or any other person involved in the Offer accepts responsibility for any taxation effects on, or liabilities of, any persons as a result of their acceptance or rejection of the Offer.

Dealings in the Company’s securities

Save for the acquisition of the Sale Shares under the Sale and Purchase Agreement and the Pledged Shares, none of the Offeror, Mr. Zhang and parties acting in concert with any of them had dealt in the Shares or other options, derivatives, warrants or other securities convertible into Shares during Relevant Period.

Overseas Shareholders

To the extent practicable and permissible under applicable laws and regulations, the Offeror intends to make available the Offer to all shareholders, including those who are resident outside Hong Kong. The making of the Offer to persons not resident in Hong Kong may be affected by the laws and regulations of the relevant jurisdiction in which they are resident. Overseas Shareholders and Shareholders who are citizens, residents or nationals of a jurisdiction outside Hong Kong should observe any applicable legal or regulatory requirements and, where necessary, seek legal advice in respect of the Offer.

– 9 –

LETTER FROM KINGSTON SECURITIES

It is the sole responsibility of Overseas Shareholders who wish to accept the Offer to satisfy themselves as to the full observance of the laws and regulations of the relevant jurisdictions in connection with the acceptance of the Offer (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 or other taxes due from him in respect of such jurisdictions).

In the event that the receipt of this Offer Document by Overseas Shareholders is prohibited by any applicable laws and regulations or may only be effected after compliance with conditions or requirement that the directors of the Offeror regard as unduly onerous or burdensome (or otherwise not in the best interests of the Offeror), this Offer Document will not be despatched to such Overseas Shareholders. For that purpose, the Offeror may apply for a waiver pursuant to Note 3 to Rule 8 of the Takeovers Code at such time. Any such waiver will only be granted if the Executive is satisfied that it would be unduly burdensome to despatch this Offer Document to such Overseas Shareholders. In granting the waiver, the Executive will be concerned to see that all material information in this Offer Document is made available to such Overseas Shareholders. If any such waiver is granted by the Executive, the Offeror reserves the right to make arrangements in respect of the Overseas Shareholders in relation to the terms of the Offer. Such arrangements may include notifying any matter in connection with the Offer to the Overseas Shareholders having a registered overseas address by announcement or by advertisement in a newspaper which may or may not be circulated in the jurisdiction within which such persons are resident. The notice will be deemed to have been sufficiently given despite any failure by such Overseas Shareholders to receive or see that notice.

Any acceptance by any Overseas Shareholder will be deemed to constitute a representation and warranty from such Overseas Shareholder to the Offeror that the local laws and requirements have been complied with. The Overseas Shareholders should consult their professional advisers if in doubt.

INFORMATION OF THE OFFEROR

The Offeror is a company incorporated in the British Virgin Islands on 8 October 2013 with limited liability and is wholly owned by Mr. Zhang. Mr. Zhang, aged 36, is an entrepreneur in various industries, including real estate and energy etc. Mr. Zhang has more than 6 years of experience in the energy sector. He is a controlling shareholder and an executive director of Kinetic Mines and Energy Limited, a company listed on the main board of the Stock Exchange (stock code: 1277) which principally engages in coal production and coal trading. Mr. Zhang also has more than 8 years of experience in the real estate sector. He is a director of Seedland Construction Holdings Limited, a company incorporated in Hong Kong on 15 July 2008 with limited liability which, through its subsidiaries, principally engaged in real estate business. Mr. Zhang was a third party independent of, and not connected with, either the Company or any of its connected persons before the Acquisition, save that the Offeror became a controlling shareholder of the Company following Completion.

– 10 –

LETTER FROM KINGSTON SECURITIES

THE OFFEROR’S INTENTION IN RELATION TO THE COMPANY

It is the intention of the Offeror that the Group will continue with its existing principal activities after the close of the Offer. The Offeror will, following the close of the Offer, conduct a review on the business activities and financial position of the Group to formulate business plans and strategies for the future business development of the Group. As at the Latest Practicable Date, the Offeror has no definitive plans for any acquisition or disposal of assets and/or business of the Group.

Save as in connection with the Offeror’s intention regarding the Group as set out above, the Offeror has no intention to (i) discontinue the employment of any employees of the Group; or (ii) redeploy the fixed assets of the Company other than those in its ordinary and usual course of business.

The Offeror intends to nominate Mr. Lee, Hin Kwong Patrick as an executive Director. The Offeror is in the course of identifying additional candidates for the Board, subject to compliance with the Takeovers Code and the Listing Rules. The appointment of Directors to be nominated by the Offeror will not take effect earlier than the date of posting of this Offer Document in compliance with the Takeovers Code.

Further announcement will be published in respect of the changes to the Board pursuant to the Takeovers Code and the Listing Rules as and when appropriate.

Should there be any change to the Board composition, it will be made in compliance with the Takeovers Code and the Listing Rules. Further announcements will be made upon any appointment of new Directors in accordance with the Listing Rules.

MAINTAINING THE LISTING STATUS OF THE COMPANY

The Stock Exchange has stated that if, at 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: (a) a false market exists or may exist in the trading of the Shares; or

• (b) that there are insufficient Shares in public hands to maintain an orderly market,

it will consider exercising its discretion to suspend dealings in the Shares.

The Offeror intends the Company to remain listed on the Stock Exchange. The sole director of the Offeror and the new Directors to be appointed to the Board have jointly and severally undertaken to the Stock Exchange to take appropriate steps to ensure that sufficient public float exists in the Shares.

– 11 –

LETTER FROM KINGSTON SECURITIES

COMPULSORY ACQUISITION

The Offeror does not intend to avail itself of any powers of compulsory acquisition of any Shares outstanding after the close of the Offer.

GENERAL

To ensure equality of treatment to all Shareholders, those registered Shareholders who hold any Offer Share as nominee for more than one beneficial owner should, as far as practicable, treat the holding of each beneficial owner separately. In order for the beneficial owners of the Offer Shares whose investments are registered in the names of nominees to accept the Offer, it is essential that they provide instructions to their nominees of their intentions with regard to the Offer. The attention of the Overseas Shareholders is drawn to the section headed ‘‘7. OVERSEAS SHAREHOLDERS’’ in Appendix I to this Offer Document.

All documents and remittances sent to the Shareholders by ordinary post will be sent to them at their own risk. Such documents and remittances will be sent to the Shareholders at their respective addresses in accordance with the Form of Acceptance. None of the Offeror, Kingston Securities, Kingston Corporate Finance, the Registrar or any of their respective directors or professional advisers or any other parties involved in the Offer will be responsible for any loss or delay in transmission or any other liabilities that may arise as a result thereof.

The Company is required to despatch the Response Document containing, amongst other things, a letter from the Independent Board Committee and a letter from the independent financial adviser, within 14 days after the posting of this Offer Document. Shareholders are advised to read this Offer Document and the Response Document before taking any action in respect of the Offer.

ADDITIONAL INFORMATION

Your attention is drawn to the additional information regarding the Offer set out in the Appendices to this Offer Document and the accompanying Form of Acceptance, which form part of this Offer Document.

In considering what action to take in connection with the Offer, you should consider your own tax or financial position and if you are in any doubt, you should consult your professional advisers.

Yours faithfully, For and on behalf of Kingston Securities Limited Chan Yin Tong Cynthia Director

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FURTHER TERMS OF THE OFFER AND PROCEDURES FOR ACCEPTANCE

APPENDIX I

1. PROCEDURES FOR ACCEPTANCE

• (a) If the share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title in respect of your Shares is/are in your name, and you wish to accept the Offer in respect of your Shares (whether in full or in part), you must send the duly completed and signed Form of Acceptance together with the relevant share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof), in respect of the number of Shares which you intend to accept the Offer, by post or by hand to the Registrar, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong marked ‘‘Pegasus Entertainment Holdings Limited — Offer’’ on the envelope as soon as possible but in any event so as to reach the Registrar by not later than 4:00 p.m. on the Closing Date or such later time and/or date as the Offeror may determine and announce in accordance with the Takeovers Code.

• (b) If the share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title in respect of your Shares is/are in the name of a nominee company or a name other than your own, and you wish to accept the Offer in respect of your Shares (whether in full or in part), you must either:

• (i) lodge your share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Shares with the nominee company, or other nominee, and with instructions authorising it to accept the Offer on your behalf and requesting it to deliver the Form of Acceptance duly completed and signed together with the relevant share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Shares to the Registrar; or

• (ii) arrange for the Shares to be registered in your name by the Company through the Registrar, and deliver the Form of Acceptance duly completed and signed together with the relevant share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Shares to the Registrar; or

• (iii) if your Shares have been lodged with your licensed securities dealer/registered institution in securities/custodian bank through CCASS, instruct your licensed securities dealer/registered institution in securities/custodian bank to authorise HKSCC Nominees Limited to accept the Offer on your behalf on or before the deadline set by HKSCC Nominees Limited. In order to meet the deadline set by HKSCC Nominees Limited, you should check with your licensed securities dealer/registered institution in securities/custodian bank for the timing on

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FURTHER TERMS OF THE OFFER AND PROCEDURES FOR ACCEPTANCE

APPENDIX I

processing of your instruction, and submit your instruction to your licensed securities dealer/registered institution in securities/custodian bank as required by them; or

• (iv) if your Shares have been lodged with your investor participant’s account maintained with CCASS, give your instruction via the CCASS phone system or CCASS internet system on or before the deadline set by HKSCC Nominees Limited.

• (c) If you have lodged transfer(s) of any of your Shares for registration in your name and have not yet received your share certificate(s), and you wish to accept the Offer in respect of your Shares, you should nevertheless complete and sign the Form of Acceptance and deliver it to the Registrar together with the transfer receipt(s) duly signed by yourself. Such action will constitute an irrevocable authority to the Offeror and/or Kingston Securities and/or their respective agent(s) to collect from the Company or the Registrar on your behalf the relevant share certificate(s) when issued and to deliver such share certificate(s) to the Registrar on your behalf and to authorise and instruct the Registrar to hold such share certificate(s), subject to the terms of the Offer, as if they were delivered to the Registrar with the Form of Acceptance.

• (d) If the share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Shares is/are not readily available and/or is/are lost, as the case may be, and you wish to accept the Offer in respect of your Shares, the Form of Acceptance should nevertheless be completed and delivered to the Registrar together with a letter stating that you have lost one or more of your share certificate(s) and/or transfer receipt(s) and/or other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Shares or that it is/they are not readily available. If you find such document(s) or if it/they become(s) available, the relevant share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Shares should be forwarded to the Registrar as soon as possible thereafter. If you have lost the share certificate(s) and/ or transfer receipt(s) and/or other document(s) of title in respect of your Shares, you should also write to the Registrar for a letter of indemnity which, when completed in accordance with the instructions given, should be provided to the Registrar.

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FURTHER TERMS OF THE OFFER AND PROCEDURES FOR ACCEPTANCE

APPENDIX I

• (e) Acceptance of the Offer will be treated as valid only if the completed and signed Form of Acceptance is received by the Registrar on or before the latest time for acceptance of the Offer and the Registrar has recorded that the acceptance and any relevant documents required by Note 1 to Rule 30.2 of the Takeovers Code have been so received, and is:

• (i) accompanied by the relevant share certificate(s) and/or transfer receipt(s) and/or other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Shares and, if that/those share certificate(s) and/or transfer receipt(s) and/or other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) is/are not in your name, such other documents (e.g. a duly stamped transfer of the relevant Share(s) in blank or in favour of the acceptor executed by the registered holder) in order to establish your right to become the registered holder of the relevant Shares; or

• (ii) from a registered Shareholder or his/her personal representative (but only up to the amount of the registered holding and only to the extent that the acceptance relates to the Shares which are not taken into account under another subparagraph of this paragraph (e)); or

• (iii) certified by the Registrar.

If the Form of Acceptance is executed by a person other than the registered Shareholder, appropriate documentary evidence of authority (e.g. grant of probate or certified copy of a power of attorney) to the satisfaction of the Registrar must be produced.

• (f) Seller’s ad valorem stamp duty payable by the Shareholders who accept the Offer and calculated at a rate of 0.1% of the market value of the Offer Shares or consideration payable by the Offeror in respect of the relevant acceptances of the Offer, whichever is the higher, or the value of Offer Shares as determined by the Collector of Stamp Revenue under the Stamp Duty Ordinance (Chapter 117 of the Law of Hong Kong) will be deducted from the amount payable by the Offeror to the relevant Shareholders on acceptance of the Offer. The Offeror will arrange for payment of the seller’s ad valorem stamp duty on behalf of the Shareholders who accept the Offer and will pay the buyer’s ad valorem stamp duty in connection with the acceptance of the Offer and the transfer of the Offer Shares.

• (g) If the Offer is withdrawn or lapses, the Offeror shall, as soon as possible but in any event within ten (10) days thereof, return by ordinary post the share certificate(s) and/or transfer receipt(s) and/or other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) at your own risk in respect of your Shares lodged with the Form of Acceptance to the relevant Shareholder(s).

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FURTHER TERMS OF THE OFFER AND PROCEDURES FOR ACCEPTANCE

APPENDIX I

• (h) No acknowledgement of receipt of any Form of Acceptance, share certificate(s) and/ or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Shares will be given.

2. SETTLEMENT UNDER THE OFFER

Provided that a valid Form of Acceptance and the relevant share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of the relevant Shares as required by Note 1 to Rule 30.2 of the Takeovers Code are complete and in good order and in all respects and have been received by the Registrar before the close of the Offer, a cheque for the amount due to each of the Shareholders who accept the Offer less seller’s ad valorem stamp duty in respect of the Offer Shares tendered by him/her under the Offer will be despatched to such Shareholder by ordinary post at his/her own risk as soon as possible but in any event within seven (7) Business Days following the date of the receipt of all relevant documents by the Registrar to render such acceptance complete and valid.

Settlement of the consideration to which any Shareholder is entitled under the Offer will be implemented in full in accordance with the terms of the Offer (save with respect to the payment of seller’s ad valorem stamp duty), without regard to any lien, right of set-off, counterclaim or other analogous right to which the Offeror may otherwise be, or claim to be, entitled against such Shareholder.

3. ACCEPTANCE PERIOD AND REVISIONS

Unless the Offer has previously been extended or revised with the consent of the Executive in accordance with the Takeovers Code, the latest time and date for acceptance will be 4:00 p.m. on the Closing Date, or if the Offer is extended, any subsequent closing date of the Offer will be announced by the Offeror in accordance with the Takeovers Code.

The Offeror reserves its right to revise or extend the Offer as it may determine in accordance with the Takeovers Code (or as permitted by the Executive in accordance with the Takeovers Code).

The Offeror will issue an announcement in relation to any revision or extension of the Offer, which will state the next closing date and at least 14 days’ notice in writing must be given to those Shareholders, who have not accepted the Offer before the Offer is closed and an announcement will be published.

If the Offeror revises the terms of the Offer, all Shareholders, whether or not they have already accepted the relevant Offer, will be entitled to accept the revised Offer under the revised terms.

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FURTHER TERMS OF THE OFFER AND PROCEDURES FOR ACCEPTANCE

APPENDIX I

If the Offer is extended or revised, the announcement of such extension or revision will state the revised Closing Date. If the Offer is revised, the Offer will remain open for acceptance for at least 14 days following the date of the posting of the revised Offer Document.

If the Closing Date of this Offer is extended, any reference in this Offer Document and in the Form of Acceptance to the Closing Date shall, except where the context otherwise requires, be deemed to refer to the Closing Date of the Offer so extended.

If there is a tropical cyclone warning signal number 8 or above, or a black rainstorm warning: (a) in force in Hong Kong at any local time before 12:00 noon but no longer in force after 12:00 noon on the latest date for acceptance of the Offer and the latest date for posting of remittances for the amounts due under the Offer in respect of valid acceptances, the latest time for acceptance of the Offer will remain at 4:00 p.m. on the same Business Day and the posting of the remittances will be made on the same Business Day; or (b) in force in Hong Kong at any local time between 12:00 noon and 4:00 p.m. on the latest date for acceptance of the Offer and the latest date for posting of remittances for the amounts due under the Offer in respect of valid acceptances, the latest time for acceptance of the Offer will be rescheduled to 4:00 p.m. on the following Business Day which does not have either of those warning in force at any time between 9:00 a.m. and 4:00 p.m. or such other day as the Executive may approve in accordance with the Takeovers Code and the posting of the remittances will be made on the following Business Day which does not have either of those warning in force at any time between 9:00 a.m. and 4:00 p.m.

4. ANNOUNCEMENTS

By 6:00 p.m. on the Closing Date (or such later time and/or date as the Executive may in exceptional circumstances permit), the Offeror must inform the Executive and the Stock Exchange of its decision in relation to the expiry, revision or extension of the Offer. The Offeror must publish an announcement in accordance with the Listing Rules on the Stock Exchange’s website by 7:00 p.m. on the Closing Date stating the results of the Offer and whether the Offer has been revised, extended or expired. The announcement will state the total number of Shares:

• (i) for which acceptances of the Offer has been received;

• (ii) held, controlled or directed by the Offeror and parties acting in concert with it before the Offer Period; and

• (iii) acquired by or agreed to be acquired during the Offer Period by the Offeror and parties acting in concert with it.

The announcement will include details of any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) in the Company which the Offeror and parties acting in concert with it have borrowed or lent, save for any borrowed Shares which have been either on-lent or sold.

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FURTHER TERMS OF THE OFFER AND PROCEDURES FOR ACCEPTANCE

APPENDIX I

The announcement will specify the percentages of the issued share capital, and the percentages of voting rights represented by the relevant number of Shares.

In computing the total number of Shares represented by acceptances, only valid acceptances that are complete and in good order and in compliance with Note 1 to Rule 30.2 of the Takeovers Code, which have been received by the Registrar no later than 4:00 p.m. on the Closing Date, being the latest time and date for acceptance of the Offer, shall be included.

As required under the Takeovers Code, all announcements in relation to the Offer are made in accordance with the requirements of the Takeovers Code and the Listing Rules.

5. RIGHT OF WITHDRAWAL

As the Offer is unconditional in all respects, acceptance of the Offer tendered by holders of Offer Shares shall be irrevocable and cannot be withdrawn, except in the circumstances set out in the paragraph below. An acceptor of the Offer may withdraw his/her/its acceptance by lodging a notice in writing signed by the acceptor (or a notice signed by his/her/its duly appointed agent with evidence of the appointment attached) to the Registrar.

Under Rule 19.2 of the Takeovers Code, if the Offeror is unable to comply with the requirements set out in the section headed ‘‘4. ANNOUNCEMENTS’’ above, the Executive may require that the holders of Offer Shares who have tendered acceptances to the relevant Offer be granted a right of withdrawal on terms that are acceptable to the Executive until the requirements set out in that section are met.

6. TAXATION

Shareholders are recommended to consult their own professional advisers if they are in any doubt as to the taxation implications of their accepting or rejecting the Offer. None of the Offeror, Mr. Zhang and parties acting in concert with any of them, Kingston Securities, Kingston Corporate Finance or their respective directors or any other persons involved in the Offer accept responsibility for any tax effects or liabilities of any person or persons as a result of their acceptance or rejection of the Offer.

7. OVERSEAS SHAREHOLDERS

The making of the Offer to Overseas Shareholders may be prohibited or affected by the laws of the relevant jurisdiction. Overseas Shareholders and Shareholders who are citizens or residents or nationals of jurisdictions outside Hong Kong should obtain appropriate legal advice on, inform themselves about and observe any applicable legal requirement. It is the sole responsibility of each person who wishes to accept the Offer to satisfy himself/herself/itself as to the full observance of the laws of the relevant jurisdiction in connection therewith, including but not limited to the obtaining of any governmental, exchange control or other consents and any registration filing which may be required and the compliance with all other necessary formalities, regulatory and/or legal requirements and the payment of any transfer or other taxes payable by him/her/it in respect of such jurisdiction. Any such Overseas Shareholder will be responsible for any such taxes by whomsoever payable and the Offeror, Kingston Securities,

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FURTHER TERMS OF THE OFFER AND PROCEDURES FOR ACCEPTANCE

APPENDIX I

Kingston Corporate Finance and any person acting on his/her/its behalf shall be entitled to be fully indemnified and held harmless by such Overseas Shareholder and Shareholders who are citizens or residents or nationals of jurisdictions outside Hong Kong for any such issue, transfer or other taxes as such person may be required to pay. Overseas Shareholders and Shareholders who are citizens or residents or nationals of jurisdictions outside Hong Kong are advised to seek professional advice on deciding whether to accept the Offer.

8. GENERAL

• (a) All communications, notices, Form of Acceptance, share certificate(s) in respect of the Shares, transfer receipt(s), other document(s) of title and/or any satisfactory indemnity or indemnities required in respect thereof and remittances to settle the consideration payable under the Offer will be delivered by or sent to or from the Shareholders or their designated agents, by ordinary post at their own risk, and none of the Offeror, Mr. Zhang and parties acting in concert with any of them, Kingston Securities and Kingston Corporate Finance and any of their respective directors, the Registrar and other parties involved in the Offer and any of their respective agents accepts any liability for any loss or delay in postage or any other liabilities that may arise as a result thereof.

• (b) The provisions set out in the Form of Acceptance form part of the terms of the Offer.

• (c) The accidental omission to despatch this Offer Document and/or Form of Acceptance or any of them to any person to whom the Offer is made will not invalidate the Offer in any way.

• (d) The Offer is, and all acceptances will be, governed by and construed in accordance with the laws of Hong Kong.

• (e) Due execution of the Form of Acceptance will constitute an authority to the Offeror, Kingston Securities or such person or persons as the Offeror may direct to complete, amend and execute any document on behalf of the person or persons accepting the Offer and to do any other act that may be necessary or expedient for the purposes of vesting in the Offeror, or such person or persons as he may direct, the Shares in respect of which such person or persons has/have accepted the Offer.

• (f) Acceptance of the Offer by any person or persons will be deemed to constitute a warranty by such person or persons to the Offeror:

• (i) that such Offer Shares acquired under the Offer are sold free from Encumbrances and together with all rights attached to them as at the date of this Offer Document or subsequently becoming attached to them, including, without limitation, in the case of the Shares, the rights to receive in full all dividends and/or other distributions, if any, declared, made or paid on or after the date of this Offer Document; and

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FURTHER TERMS OF THE OFFER AND PROCEDURES FOR ACCEPTANCE

APPENDIX I

• (ii) that if such Shareholder accepting the Offer is an Overseas Shareholder, he/she /it has observed the laws of all relevant jurisdictions in connection therewith, including the obtaining of any governmental or exchange control or other consents, as may be required, or the compliance with other necessary formalities or legal requirements and the payment of any issue, transfer or other taxes in such jurisdiction.

• (g) Reference to the Offer in this Offer Document and in the Form of Acceptance shall include any extension and/or revision thereof.

• (h) All acceptances, instructions, authorities and undertakings given by the Shareholders in the Form of Acceptance shall be irrevocable except as permitted under the Takeovers Code.

• (i) In making their decisions with regard to the Offer, the Shareholders should rely on their own examination of the Offeror and the terms of the Offer, including the merits and risks involved. The contents of this Offer Document, including any general advice or recommendation contained herein together with the Form of Acceptance are not and shall not be construed as any legal, business or other advice on the part of the Offeror and/or Kingston Securities and/or Kingston Corporate Finance. Shareholders should consult their own professional advisers for professional advice.

• (j) The English text of this Offer Document and the Form of Acceptance shall prevail over their respective Chinese texts.

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GENERAL INFORMATION OF THE OFFEROR

APPENDIX II

1. RESPONSIBILITY STATEMENT

This Offer Document includes particulars given in compliance with the Takeovers Code for the purpose of providing information to the Shareholders with regard to the Offeror and the Offer.

The sole director of the Offeror accepts full responsibility for the accuracy of the information contained in this Offer Document (other than the information relating to the Group and the Vendors), and confirms, having made all reasonable enquiries, that to the best of his knowledge, opinions expressed in this Offer Document have been arrived at after due and careful consideration and there are no other facts not contained in this Offer Document, the omission of which would make any statement in this Offer Document misleading.

The information relating to the Group in this Offer Document has been extracted from or based on the publicly available information of the Group. The only responsibility accepted by the Offeror in respect of such information is for the correctness and fairness of the extraction of such information and/or its reproduction or presentation.

2. MARKET PRICES

The table below shows the closing price of the Shares quoted on the Stock Exchange on (i) the last day on which trading took place in each of the calendar months during the Relevant Period; (ii) the last trading day immediately preceding the date of the Initial Announcement (iii) the Last Trading Day; and (iv) the Latest Practicable Date.

	Closing price
Date	per Share
	HK$
28 April 2017	0.228
31 May 2017	0.240
30 June 2017	0.208
31 July 2017	0.185
31 August 2017	0.192
29 September 2017	0.182
17 October 2017 (the last trading day immediately preceding the date of
the Initial Announcement)	0.275
20 October 2017 (Last Trading Day)	0.280
31 October 2017	0.325
13 November 2017 (Latest Practicable Date)	0.320

The highest and lowest closing prices of the Shares as quoted on the Stock Exchange during the Relevant Period were HK$0.325 per Share on 30 October 2017, 31 October 2017, 1 November 2017, 2 November 2017, 3 November 2017 and 8 November 2017 and HK$0.172 per Share on 9 October 2017, respectively.

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GENERAL INFORMATION OF THE OFFEROR

APPENDIX II

3. DISCLOSURE OF INTERESTS AND DEALINGS

As at the Latest Practicable Date, the Offeror, Mr. Zhang and parties acting in concert with any of them held 1,523,808,000 Shares, representing approximately 58.71% of the issued share capital of the Company.

Save for the Acquisition of the Sale Shares, none of the Offeror, the director of the Offeror (i.e. Mr. Zhang) and parties acting in concert with any of them (including Kingston Corporate Finance and Kingston Securities) had dealt for value in any relevant securities as defined in Note 4 to Rule 22 of the Takeovers Code of the Company during the Relevant Period.

Save as disclosed above, as at the Latest Practicable Date,

• (a) save for the Sale Shares and the Pledged Shares, the Offeror, Mr. Zhang and parties acting in concert with any of them (including Kingston Securities) did not own, control or have direction over any voting rights in any Shares nor own, control or have direction over any other rights or interests in the issued share capital or voting rights of the Company;

• (b) the Offeror, Mr. Zhang and parties acting in concert with any of them have not received any irrevocable commitment to accept or reject the Offer;

• (c) save for the Sale Shares and the Pledged Shares, the Offeror, Mr. Zhang and parties acting in concert with any of them have no other outstanding Shares, warrants, options, derivative or other securities that are convertible or exchangeable into Shares or other types of equity interest in the Company;

• (d) there are no outstanding derivatives in respect of the securities in the Company which are entered into by the Offeror, Mr. Zhang or parties acting in concert with any of them;

• (e) save for the Sale and Purchase Agreement and the Facility Agreement, there is no arrangement (whether by way of option, indemnity or otherwise) of any kind referred to in Note 8 to Rule 22 of the Takeovers Code in relation to the shares of the Offeror or the Shares;

• (f) save for the Sale and Purchase Agreement, there is no agreement or arrangement to which the Offeror is a party which relates to circumstances in which the Offeror may or may not invoke or seek to invoke a pre-condition or a condition to the Offer;

• (g) there are no relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) in the Company which the Offeror, Mr. Zhang and parties acting in concert with any of them have borrowed or lent;

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GENERAL INFORMATION OF THE OFFEROR

APPENDIX II

• (h) other than the consideration to be paid under the Sale and Purchase Agreement, each of the Vendors or their respective concert parties has not received and will not receive any other consideration or benefits in whatever form from the Offeror, its ultimate beneficial owner (i.e. Mr. Zhang) or their respective concert parties; and

• (i) there is no special deal (as defined under Rule 25 of the Takeovers Code) between the Offeror and parties acting in concert with it on one hand and the Vendors and parties acting in concert with each of them on the other hand.

4. ARRANGEMENTS IN CONNECTION WITH THE OFFER

As at the Latest Practicable Date,

• (a) there was no agreement, arrangement or understanding (including any compensation arrangement) existed between the Offeror or any person acting in concert with it and any of the Directors, recent directors of the Company, Shareholders, or recent shareholders of the Company having any connection with or dependence upon the Offer; and

• (b) no benefit (other than statutory compensation required under the applicable laws) had been or would be given to any Director as compensation for loss of office or otherwise in connection with the Offer.

5. CONSENT AND QUALIFICATION

The following are the qualifications of the experts whose opinions or advices are contained or referred to in this Offer Document:

Name Qualification Kingston Corporate Finance Kingston Corporate Finance Limited, a corporation licensed by the SFC to carry on Type 6 (advising on corporate finance) regulated activity under the SFO Kingston Securities Kingston Securities Limited, a corporation licensed by the SFC to carry on Type 1 (dealing in securities) regulated activity under the SFO

Each of Kingston Corporate Finance and Kingston Securities has given and has not withdrawn its written consent to the issue of this Offer Document with copy of its letter and the references to its name (as the case may be) included in the form and context in which it is included.

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GENERAL INFORMATION OF THE OFFEROR

APPENDIX II

6. GENERAL

• (a) The principal members of the Offeror’s concert group are the Offeror and Mr. Zhang.

• (b) The correspondence address of the Offeror and Mr. Zhang is Flat B, 20/F., Two Chinachem Plaza, 68 Connaught Road Central, Hong Kong.

• (c) The Offeror is a company incorporated in the British Virgin Islands on 8 October 2013 with limited liability and is wholly owned by Mr. Zhang. As at the Latest Practicable Date, the Offeror and parties acting in concert with it held 1,523,808,000 Shares, representing approximately 58.71% of the issued share capital of the Company.

• (d) The registered and correspondence office address of each of Kingston Corporate Finance and Kingston Securities is Suite 2801, 28th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong.

7. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection on the SFC’s website at http://www.sfc.hk and the website of the Company at http://www.pegasusmovie.com from the date of this Offer Document for as long as the Offer remains open for acceptance:

• (a) the memorandum and articles of association of the Offeror;

• (b) the written consents referred to in the paragraph headed ‘‘5. CONSENT AND QUALIFICATION’’ in this Appendix II;

• (c) the letter from Kingston Securities, the text of which is set out on pages 6 to 12 of this Offer Document; and

• (d) the Sale and Purchase Agreement.

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