Vision Values Holdings Ltd. — M&A Activity 2000

Oct 17, 2000

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.

亞洲物流科技有限公司*

Golden Infinity Co., Ltd. Asia Logistics Technologies Limited

(Incorporated in the British Virgin Islands with limited liability) (Incorporated in the Cayman Islands with limited liability)

JOINT ANNOUNCEMENT

CONDITIONAL CASH OFFER

BY

TAI FOOK SECURITIES COMPANY LIMITED

ON BEHALF OF GOLDEN INFINITY CO., LTD.

FOR ALL THE ISSUED SHARES, OUTSTANDING WARRANTS AND OPTIONS

IN ASIA LOGISTICS TECHNOLOGIES LIMITED

(OTHER THAN THOSE ALREADY OWNED BY

GOLDEN INFINITY CO., LTD.

OR PARTIES ACTING IN CONCERT WITH IT)

On 13th October, 2000, the Offeror entered into the S&P Agreement to acquire from the Vendor 900,000,000 Shares and 190,000,000 units of Warrants, representing approximately 35.58% of the issued share capital of the Company and approximately 70.17% of the outstanding Warrants respectively, at a consideration of HK$108,000,000 and HK$190,000 respectively, representing HK$0.12 per Sale Share and HK$0.001 per Sale Warrant.

The S&P Agreement was completed on 13th October, 2000. Therefore the Offeror is now interested in approximately 35.58% and 70.17% of the issued share capital of the Company and outstanding Warrants respectively. Accordingly, under Rule 26.1 of the Code, the Offeror is required to make a conditional cash offer for all the Shares, outstanding Warrants and Options not already beneficially owned by the Offeror or parties acting in concert with it. The terms of the Offers are set out under section headed "Conditional Cash Offer".

An Independent Board Committee will be appointed to consider the Offers. An independent financial adviser will be appointed to advise the Independent Board Committee on the Offers. The Offeror will send a composite offer document setting out the terms of the Offers, and the acceptance and transfer forms to all independent Shareholders, Warrantholders and Optionholders as soon as practicable in accordance with the Code.

The Offers will be conditional upon the Offeror having received acceptances of the Offers which, together with the Shares and Warrants already owned or to be acquired by the Offeror or parties acting in concert with it before or during the Offers period, will result in the Offeror and parties acting in concert with it holding more than 50% of the voting rights of the Company. If the Offeror does not receive acceptances of the Offers which, together with the Shares and Warrants already owned or to be acquired by the Offeror or parties acting in concert with it before or during the Offers period, will result in the Offeror and parties acting in concert with it holding more than 50% of the voting rights of the Company, the Offers cannot become unconditional and will lapse.

Trading in the Shares and the Warrants on the Stock Exchange was suspended from 10:00 a.m. on Monday, 16th October, 2000, pending the release of this announcement. Application has been made to the Stock Exchange for the resumption in trading in the Shares and the Warrants with effect from 10:00 a.m. on 17th October, 2000.

THE ACQUISITION

The S&P Agreement dated 13th October, 2000

Parties:

Vendor: Best Millennium Limited, the entire issued share capital of which is beneficially owned by Mr. Chan, the chairman and an executive director of the Company.

Purchaser: Golden Infinity Co., Ltd., the entire issued share capital of which is beneficially owned by Mr. Lo, the vice chairman and an executive director of the Company.

Number of Sale Shares and Sale Warrants sold:

900,000,000 Shares (representing approximately 35.58% of the Company's issued share capital as at the date of the S&P Agreement).

190,000,000 units of Warrants (representing approximately 70.17% of the outstanding Warrants as at the date of the S&P Agreement).

The Sale Shares and Sale Warrants had been acquired by the Offeror free from all claims, charges, liens, encumbrances, equities and other third party rights.

Upon Completion, the Vendor does not own any Shares and Warrants.

Purchase price:

HK$0.12 per Sale Share.

HK$0.001 per Sale Warrant.

The above prices have been agreed at after arm's length negotiation between the parties with reference to the unaudited net asset value of the Company as at 30th June, 2000.

Payment terms:

The consideration in respect of the Sale Shares and the Sale Warrants had been paid by the Offeror in cash upon Completion.

COMPLETION

The S&P Agreement had also completed on 13th October, 2000.

CONDITIONAL CASH OFFER

With the Completion taken place on 13th October, 2000, the Offeror now beneficially owns approximately 35.58% and 70.17% of the existing issued share capital of the Company and outstanding Warrants respectively. Accordingly, under Rule 26.1 of the Code, the Offeror is required to make a conditional cash offer for all the Shares, outstanding Warrants and Options not already beneficially owned by the Offeror or parties acting in concert with it.

The Share Offer and the Warrant Offer

The Share Offer and the Warrant Offer will be made by Tai Fook on behalf of the Offeror on the following basis:

For each Offer Share HK$0.12 in cash

For each Offer Warrant HK$0.001 in cash

The offer prices per Offer Share and per Offer Warrant are equal to the consideration paid by the Offeror for each Sale Share and each Sale Warrant respectively.

The offer price of HK$0.12 per Offer Share represents:

• a discount of approximately 27.27% to the closing price of HK$0.165 per Share as quoted on the Stock Exchange on 13th October, 2000, being the last trading day prior to suspension of trading in the Shares on the Stock Exchange pending the issue of this announcement;
• a discount of approximately 43.40% to the average closing price of HK$0.212 per Share for the ten trading days up to and including 13th October, 2000; and
• a premium of 24.82% of the unaudited net asset value per Share as at 30th June, 2000.

The offer price of HK$0.001 per Offer Warrant represents:

• a discount of approximately 99.83% to the closing price of HK$0.60 per Warrant as quoted on the Stock Exchange on 13th October, 2000, being the last trading day prior to suspension of trading in the Warrants on the Stock Exchange pending the issue of this announcement; and
• a discount of approximately 99.83% to the average closing price of HK$0.60 per Warrant for the ten trading days up to and including 13th October, 2000.

The Option Offer

Pursuant to the employee share option scheme adopted by the Company on 11th September, 1998, Options to subscribe for a total of 242,000,000 Shares are currently outstanding. The Options are held by certain directors and employees of the Company (including Mr. Lo and Mr. Chan, who were granted by the Company 57,000,000 and 63,000,000 Options respectively) entitling such holders to subscribe in cash for new Shares at subscription prices determined in accordance with the scheme. The Options granted on 30th June, 2000 are exercisable at any time between 2nd June, 2000 and 1st June, 2003 at an exercise price of HK$0.245 per Share and the Options granted on 14th August, 2000 are exercisable at any time between 15th August, 2000 and 14th August, 2003 at an exercise price of HK$0.284 per Share. The exercise in full of the Options would result in the issue of 242,000,000 additional Shares.

Pursuant to the terms of the employee share option scheme of the Company, the Options are personal to the holders thereof, and cannot be assigned or transferred. Subject to the Share Offer and the Warrant Offer being made, Tai Fook, on behalf of the Offeror, will also offer to pay cash to the Optionholders on the following basis:

For each Offer Option HK$0.001 in cash

The offer price for each Offer Option as stated above is at nominal value which takes into account the fact that the Offer price per Share is substantially lower than the exercise prices of the Options as mentioned above and these Options are personal to the holders therof, and cannot be assigned and transferred.

Mr. Lo undertakes to the Company not to exercise any Options granted to him prior to the expiry of the Offers period.

Pursuant to the S&P Agreement, the Vendor has agreed and undertaken to procure that each of Mr. Chan and Mr. Chan Kwok Hung, an executive director of the Company, granted by the Company 63,000,000 and 53,000,000 Options respectively, shall not accept the Option Offer in respect of any Options granted to each of them and exercise any Options granted to each of them following signing of the S&P Agreement.

The Offers will be conditional upon the Offeror having received acceptances of the Offers which, together with the Shares and Warrants already owned or to be acquired by the Offeror or parties acting in concert with it before or during the Offers period, will result in the Offeror and parties acting in concert with it holding more than 50% of the voting rights of the Company. If the Offeror does not receive acceptances of the Offers which, together with the Shares and Warrants already owned or to be acquired by the Offeror or parties acting in concert with it before or during the Offers period, will result in the Offeror and parties acting in concert with it holding more than 50% of the voting rights of the Company, the Offers cannot become unconditional and will lapse.

Total consideration

At present, the Company has 2,529,230,200 Shares and 270,769,800 Warrants in issue. At a cash offer price of HK$0.12 per Offer Share and HK$0.001 per Offer Warrant, the Offer values the entire issued share capital of the Company at approximately HK$303,507,624 and all the outstanding Warrants at about HK$270,770. Based on the offer price of HK$0.001 per Offer Option, the total consideration for the Offer Options is approximately HK$69,000, being the outstanding Options (other than those already owned by Mr. Lo, Mr. Chan and Mr. Chan Kwok Hung) times the offer price per Offer Option.

Apart from the Warrants and Options, there was no other option, warrant or conversion right affecting the Shares outstanding at the date hereof.

Tai Fook is satisfied that the Offeror has sufficient resources available to the Offeror to satisfy full acceptance of the Offers.

Dealings and holdings in the Shares and the Warrants

Prior to completion, the Offeror or parties acting in concert with it do not hold any Shares and Warrants and have not dealt in the Shares and the Warrants in the past 6 months from the date of this announcement.

Effect of accepting the Offer

By accepting the Share Offer or the Warrant Offer, Shareholders and Warrantholders will sell their Shares or Warrants, as the case may be, and all rights attached to them to the Offeror, including their rights to receive all dividends and distributions declared, made or paid on or after the completion of the Offers.

By accepting the Option Offer, Optionholders will cease to have any rights attached to the relevant Options, which will be duly cancelled by the Company.

Stamp Duty

Stamp duty at a rate of HK$1.125 for every HK$1,000 of the price will be deducted from the amount payable to Shareholders and Warrantholders who accept the Share Offer or the Warrant Offer, as the case may be.

Further terms of the Offers

An Independent Board Committee will be formed to consider the Offers. An independent financial adviser will be appointed to advise the Independent Board Committee on the Offers. The Offeror will send a composite offer document setting out the terms of the Offers, and the acceptance and transfer forms to all independent Shareholders, Warrantholders and Optionholders as soon as practicable in accordance with the Code.

Information about the Company

The Group is principally engaged in the operation of bowling recreation centres in major cities with Fujian Province of the PRC. In July 2000, the Company diversified the Company's focus from its bowling recreational business to a non-bowling recreational business with particular emphasis on logistics technologies business.

The following table sets out a summary of the audited consolidated results of the Company for the two years ended 31st December, 1999 and the unaudited results of the Company for the six months ended 30th June, 2000:

For the

six months

For the year ended ended

31st December, 30th June,

1998 1999 2000

HK$'000 HK$'000 HK$'000

Turnover 91,932 52,360 5,656

Profit/(loss) attributable to Shareholders 44,054 (20,775 ) (8,626 )

As at 30th June, 2000, the unaudited net asset value of the Company was about HK$243,161,032. With 2,529,230,200 Shares currently in issue, the unaudited net asset value per Share is HK$0.096.

Information about the Offeror

The Offeror is a private company incorporated in the British Virgin Islands on 8th September, 2000, and has not conducted any business other than entering into the S&P Agreement since its incorporation. The entire issued share capital of the Offeror is beneficially owned by Mr. Lo, the sole director of the Offeror.

Currently, Mr. Lo is the vice-chairman and an executive director of the Company. Mr. Lo is mainly responsible for the overall strategic planning and decision making of the Company. Besides, he possesses over 20 years of experience in the financial, securities and futures industries, and is the deputy chairman of Tai Fook Securities Group Limited and New World CyberBase Limited. He also holds directorship in Asean Resources Holdings Limited, Huey Tai International Limited, The Kwong Sang Hong International Limited and Pacific Ports Company Limited, all of which are companies whose shares are listed on the Stock Exchange. Neither the Offeror or Mr. Lo has any interests in any businesses which compete, or are likely to compete, directly or indirectly, with the businesses currently carried on by the Company.

Intentions of the Offeror

It is the intention of the Offeror to continue the existing businesses of the Group. The Offeror does not intend to make any material changes to the businesses of the Group. It is intended that the daily operation and management of the Group will continue to be carried out by the existing management of the Group and there will not be any material changes to the employees of the Group. The Offeror will explore suitable business opportunities and new investments, although no such investments or businesses have been identified at this stage. Any further investments or businesses that might be conducted by the Company will be subject to regulatory and shareholders' approval where so required by the applicable laws and regulations and will be in full compliance with the relevant Listing Rules.

Directors and management of the Company

Except for Mr. Chan and Mr. Chan Kwok Hung, who will resign as executive directors of the Company upon the first closing date of the Offers or the date when the Offers declared unconditional, the Offeror does not contemplate to make any changes to the Board or management of the Company at present. Mr. Lo will continue to be an executive director of the Company. In addition, the Offeror intends to nominate such number of directors so as to constitute majority of the Board upon the close of the Offers. Further announcement including details of the proposed directors of the Company and the appointment of the Company's chairman will be made in this regard.

Maintaining the listing of the Company

The Offeror intends to maintain the listing status of the Company on the Stock Exchange. The Stock Exchange has stated that it will closely monitor trading in the Shares and the Warrants.

If the Stock Exchange believes that:

- a false market exists or may exist in the Shares or the Warrants; or

• that there are too few Shares or Warrants in public hands to maintain an orderly market;

then it will consider exercising its discretion to suspend trading in the Shares or the Warrants.

The director of the Offeror and the new directors to be appointed to the Board will jointly and severally undertake to the Stock Exchange to take appropriate steps to ensure that subsequent to the close of the Offers, not less than 25% of the issued share capital of the Company will be owned by the general public.

If the Company remains listed on the Stock Exchange, any acquisition or disposal of assets of the Company will be subject to the provisions of the Listing Rules. Pursuant to the Listing Rules, the Stock Exchange has the discretion to require the Company to issue a circular to the Shareholders, and for information only, the Warrantholders and the Optionholders, irrespective of the size of the proposed acquisitions and disposals by the Company, particularly where such proposed acquisitions and disposals by the Company represent a departure from the principal activities of the Company. The Stock Exchange also has the power to aggregate a series of acquisitions and disposals by the Company and any such transactions may result in the Company being treated as if it were a new listing applicant and subject to the requirements for new listing applicants as set out in the Listing Rules.

Suspension and Resumption of trading in the Shares and the Warrants

Trading in the Shares and the Warrants on the Stock Exchange was suspended from 10:00 a.m. on Monday, 16th October, 2000 pending the release of this announcement. Application has been made to the Stock Exchange for the resumption of trading in the Shares and the Warrants with effect from 10:00 a.m. 17th October, 2000.

Definitions

In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:

"Acquisition" the acquisition by the Offeror of the Sale Shares and Sale Warrants from the Vendor pursuant to the S&P Agreement

"Board" the board of directors of the Company

"Code" the Hong Kong Code on Takeovers and Mergers

"Company" Asia Logistics Technologies Limited, a company incorporated in the Cayman Islands with limited liability and the securities of which are listed on the Stock Exchange

"Completion" completion of the S&P Agreement which has taken place on the date of the S&P Agreement

"Group" the Company and its subsidiaries

"Hong Kong" the Hong Kong Special Administrative Region of the PRC

"Independent Board Committee" the independent board committee of the Company

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

"Mr. Chan" Mr. Chan Kwok Keung, Charles, the beneficial owner of the entire issued share capital of the Vendor and he is also the chairman and an executive director of the Company

"Mr. Lo" Mr. Lo Lin Shing, Simon, the sole director and the beneficial owner of the entire issued share capital of the Offeror. Mr. Lo is also the vice chairman and an executive director of the Company

"Offeror" Golden Infinity Co., Ltd., a company incorporated in the British Virgin Islands with limited liability, the entire issued share capital of which is beneficially owned by Mr. Lo

"Offers" the Share Offer, the Warrant Offer and the Option Offer

"Offer Options" all the outstanding Options (other than those already owned by the Offeror or parties acting in concert with it)

"Offer Shares" all the issued Shares (other than those already owned by the Offeror or parties acting in concert with it)

"Offer Warrants" all the outstanding Warrants (other than those already owned by the Offeror or parties acting in concert with it)

"Optionholder(s)" holder(s) of the Options

"Option Offer" conditional cash offer to be made by Tai Fook on behalf of the Offeror for all the outstanding Options not already beneficially owned by the Offeror or parties acting in concert with it at HK$0.001 per Offer Option

"Option(s)" share option(s) of the Company granted under the employee share option scheme of the Company conferring the holders thereof rights to subscribe in cash for new Shares at subscription prices determined in accordance with the scheme

"PRC" the People's Republic of China

"Sale Shares" 900,000,000 Shares, representing approximately 35.58% in the entire issued share capital of the Company, held by the Vendor prior to Completion

"Sale Warrants" 190,000,000 units of Warrants, representing approximately 70.17% of the outstanding Warrants, held by the Vendor prior to Completion

"Share(s)" ordinary share(s) of HK$0.01 each in the issued share capital of the Company

"Share Offer" conditional cash offer to be made by Tai Fook on behalf of the Offeror for all the issued Shares not already beneficially owned by the Offeror or parties acting in concert with it at HK$0.12 per Offer Share

"Shareholder(s)" holder(s) of the Shares

"Stock Exchange" The Stock Exchange of Hong Kong Limited

"S&P Agreement" an agreement dated 13th October, 2000 pursuant to which the Offeror has agreed to purchase the Sale Shares and Sale Warrants from the Vendor at a price of HK$0.12 per Sale Share and HK$0.001 per Sale Warrant respectively

"Tai Fook" Tai Fook Securities Company Limited, a dealer registered under the Securities Ordinance (Chapter 333 of the Laws of Hong Kong)

"Vendor" Best Millenium Limited, a company incorporated in the British Virgin Islands with limited liability, the entire issued share capital of which is beneficially owned by Mr. Chan

"Warrant(s)" warrant(s) of the Company each conferring rights to the holders thereof to subscribe HK$0.195 in cash for Shares at an initial subscription price of HK$0.195 per Share (subject to adjustment) at any time until 4:00 p.m. (Hong Kong time) on or before 30th November, 2000

"Warrant Offer" conditional cash offer to be made by Tai Fook on behalf of the Offeror for all the outstanding Warrants not already beneficially owned by the Offeror or parties acting in concert with it at HK$0.001 per Offer Warrant

"Warrantholder(s)" holder(s) of the Warrants

"HK$" Hong Kong dollars

By Order of the Board By Order of the Board

Golden Infinity Co., Ltd. Asia Logistics Technologies Limited

Lo Lin Shing, Simon Chan Kwok Keung, Charles

Sole Director Chairman

Hong Kong, 16th October, 2000

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

The directors of the Company jointly and severally accept full responsibility for the accuracy of the information contained in this announcement other than those relating to the Offeror and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this announcement other than those relating to the Offeror have been arrived at after due and careful consideration and there are no other facts not contained in this announcement other than those relating to the Offeror, the omission of which would make any statement in this announcement misleading.

* for identification only

"Please also refer to the published version of this announcement in the Hong Kong i-mail"