Vision Values Holdings Ltd. — M&A Activity 2000

Jan 13, 2000

Listed Company Information

WAH YIK HOLD<0862> - Announcement & Resumption of Trading 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. BEST MILLENNIUM LIMITED FAR-REACHING LIMITED WAH YIK HOLDINGS (Incorporated in the British (Incorporated in the COMPANY LIMITED Virgin Islands with British Virgin Islands (Incorporated in limited liability) with limited liability) the Cayman Islands with limited liability) (the "Offeror") ("Far-Reaching") (the "Company") JOINT ANNOUNCEMENT Conditional cash offer by Tai Fook Securities Company Limited on behalf of the Offeror for all the issued Shares and outstanding Warrants (other than those owned by the Offeror and parties acting in concert with it) of the Company On 10th January, 2000, the board of directors of the Company (the "Board") was informed by Tai Fook Securities Company Limited ("Tai Fook") that the Offeror, a company incorporated in the British Virgin Islands and wholly-owned by Mr. Chan Kwok Keung, Charles ("Mr. Chan"), will make conditional cash offers (the "Offers") for all the issued shares of HK$0.01 each of the Company (the "Shares") and outstanding warrants ("Warrants") of the Company not already held by the Offeror or parties acting in concert with it. The terms of the Offers are set out under the heading "Conditional cash offers" below. The offers made by Somerley Limited on behalf of Far-Reaching (the "Existing Offers") are extended to 21st January, 2000 and the offeree document in response to the Existing Offers is expected to be despatched to shareholders of the Company ("Shareholders") and warrantholders of the Company ("Warrantholders") on or before 14th January, 2000. On the date of this announcement, Far-Reaching has executed a deed of undertaking (the "Deed") in favour of the Offeror whereby Far-Rearching irrevocably undertakes to accept the Offers in respect of 1.4 billion Shares and 300 million units of Warrants of the Company. The Offers will be only subject to its being accepted by Shareholders in respect of such number of the Shares as will result in the Offeror and its concert parties holding more than 50% of the issued share capital of the Company. An independent board committee of the Company (the "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. A document setting out the terms of the Offers, and the acceptance and transfer forms will be sent to the Shareholders and Warrantholders as soon as practicable in accordance with the Hong Kong Code on Takeovers and Mergers (the "Code"). Trading in the securities of the Company on The Stock Exchange of Hong Kong Limited (the "Stock Exchange") were suspended at 10:58a.m. on 10th January, 2000 at the request of the Company pending publication of this joint announcement. The Company has applied to the Stock Exchange for the resumption of trading of the securities of the Company on the Stock Exchange starting from 10:00 a.m. on 13th January, 2000. Investors should exercise caution before buying or selling Shares and/or Warrants. On 10th January, 2000, the Board was informed by Tai Fook that the Offeror, a company incorporated in the British Virgin Islands and wholly-owned by Mr. Chan, will make the Offers for all the issued Shares and outstanding Warrants not already owned by the Offeror and parties acting in concert with it . The Board has also been informed by Far-Reaching, a substantial shareholder of the Company, which as at the date of this announcement owns 1.5 billion Shares and 300 million units of Warrants, representing 75% of the issued share capital of the Company and 75% of the outstanding Warrants respectively, that on 12th January, 2000, Far-Reaching with the consent under Rule 21.2 of the Code from the Executive Director ("Executive") of the Corporate Finance Division of the Securities and Futures Commission ("SFC") executed a deed of undertaking (the "Deed") in favour of the Offeror whereby Far-Reaching irrevocably undertakes to accept the Offers in respect of 1.4 billion Shares and 300 million units of Warrants. Mr. Chan and the Offeror are independent third parties not connected with Far-Reaching, the chief executive, directors or substantial shareholders of the Company or any of its subsidiaries or any of their respective associates (as defined under the Rules Governing the Listing of Securities (the "Listing Rules") on the Stock Exchange). Save for the Deed, there is no agreement or understanding between the Offeror and Far-Reaching or their respective associates to actively co-operate to obtain or consolidate control of the Company. Investors should exercise caution before buying or selling any Shares and/or Warrants. The Offers will be on the terms set out below. Conditional cash offers: Tai Fook on behalf of the Offeror will make a conditional cash offer for all the issued Shares and outstanding Warrants, other than those already owned by the Offeror or acquired by it and parties acting in concert with it during the Offers period. Price: HK$0.10 per Share and HK$0.02 per unit of Warrant. The price of HK$0.10 per Share represents a discount of about 88.76% to the closing price of HK$0.89 per Share quoted on the Stock Exchange on 10th January, 2000, being the last traded price of the Shares on the Stock Exchange before the suspension on 10th January, 2000. The price of HK$0.10 per Share represents a discount of about 77.78% to the average closing price of the Shares on the Stock Exchange of about HK$0.45 per Share during the ten consecutive trading days ended on 7th January, 2000. The price of HK$0.10 per Share also represents a premium of about 14.94% over the audited net tangible asset of HK$0.087 per Share as at 31st December, 1998. The price of HK$0.02 per unit of Warrant represents a discount of about 96.97% to the last traded price of HK$0.66 per unit of Warrant quoted on the Stock Exchange on 10th January, 2000, being the last trading day of the Warrants on the Stock Exchange before its suspension on 10th January, 2000. The price of HK$0.02 per unit of Warrant represents a discount of about 90.38% to the average closing price of the Warrants on the Stock Exchange of about HK$0.208 per unit of Warrant during the ten consecutive trading days ended on 7th January, 2000. Total consideration: At present the Company has 2 billion issued Shares and 400 million units of Warrants outstanding. At a price of HK$0.10 per Share and HK$0.02 per unit of Warrant, the Offers values the entire issued share capital of the Company at about HK$200 million and all the outstanding Warrants at about HK$8 million. Tai Fook confirms that there are resources available to the Offeror sufficient to satisfy full acceptance of the Offers. Save for the outstanding Warrants, there are no options or other securities of the Company which are convertible into shares of the Company. The Offeror's existing voting rights: As at the date hereof, the Offeror and parties acting in concert with it do not hold any Shares or Warrants and has not dealt in the Company's shares or warrants in the past 6 months. Condition of the Offers: The Offers is only conditional upon the Offeror having received acceptances of the Offers which, together with the Shares 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 holding more than 50% of the voting rights of the Company. If the Offeror cannot receive acceptances of the Offers which, together with the Shares 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 holding more than 50% of the voting rights of the Company, the Offers cannot become unconditional and will lapse. Acceptance of the Offers by Far-Reaching: Pursuant to the Deed, Far-Reaching irrevocably undertakes to accept the Offers in respect of 1.4 billion Shares and 300 million units of Warrants, representing 70% of the issued share capital of the Company and 75% of the outstanding Warrants respectively. Far-Reaching will retain its remaining 100,000,000 Shares, representing 5% of the Company's issued share capital as strategic investment. There are no other agreement or arrangements or options agreed between the Offeror and Far-Reaching over the remaining 100,000,000 Shares held by Far-Reaching. Application has been made by Far-Reaching to the Executive pursuant to Rule 21.2 of the Code for the disposal of Far-Reaching's interests in the Company. Terms of the Offers: A document setting out the terms of the Offers, and acceptance and transfer forms will be sent to the Shareholders and warrantholders of the Company as soon as practicable in accordance with the Code. An independent board committee of the Company will be set up to consider the Offers. An independent financial adviser will be appointed to advise the Independent Board Committee. Effect of accepting the Offers: By accepting the Offers, Shareholders and Warrantholders will sell their Shares or Warrants, as the case may be, and all rights attached to them, including the rights to receive all dividends and distributions made or paid after 12th January, 2000. Stamp duty: Stamp duty at a rate of HK$1.25 for every HK$1,000 of the price or part thereof will be deducted from the amount paid to Shareholders and Warrantholders who accept the Offers. Information about the Company: The Company and its subsidiaries (the "Group") are principally engaged in the operation of bowling recreation centers in major cities within Fujian Province of the People's Republic of China. The audited consolidated profits before tax of the Company for the two financial years ended 31st December, 1998 and 1997 were about HK$54.7 million and HK$52.1 million respectively. The audited consolidated profits attributable to Shareholders for the two financial years ended 31st December, 1998 and 1997 were about HK$44.0 million and HK$43.4 million respectively. The unaudited consolidated profit before and after taxation of the Company for the six months ended 30th June, 1999 were about HK$20.0 million and HK$16.1 million respectively. The audited consolidated net asset value of the Company was about HK$173.1 million as at 31st December, 1998. Information about the Offeror: The Offeror is a private company incorporated in the British Virgin Islands on 4th January, 2000 and has not conducted any business since its incorporation. The entire issued share capital of the Offeror is beneficially owned by Mr. Chan, a director of the Offeror. None of the Offeror or Mr. Chan has any interests in any businesses which compete, or are likely to compete, directly or indirectly, with the businesses currently carried out by the Company. Mr. Chan, aged 44, holds an honorary degree of Doctor of Laws and a bachelor's degree in civil engineering and has over 19 years' international corporate management experience in the construction and property sectors as well as in strategic investments. Mr. Chan is the chairman of ITC Corporation Limited and Paul Y. - ITC Construction Holdings Limited, the managing director of Hanny Holdings Limited and a director of New World CyberBase Limited. He is also a director of Oxford Properties Group Inc., a company whose Shares are listed on the Toronto Stock Exchange, and a non-executive director of Downer Group Limited, a company whose Shares are listed on the Australian Stock Exchange. Intentions of the Offeror: The Offeror intends that the Group will continue with the existing businesses of operation of bowling recreation centers. The Offeror does not intend to make any material changes to the businesses of the Group. The Offeror intends that the daily operation of the Group will continue to be carried out by its existing management and there will not be any material changes to the employees of the Group by reason only of the Offers. 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. The Offeror will undertake to the Stock Exchange that it will fully comply with the Listing Rules requirements. If Mr. Chan becomes a director of the Company, he will fully comply with the requirements of the Listing Rules as regards directors of listed companies. Directors and management of the Company: The Offeror does not contemplate to make any changes to the Board or management of the Company at present. However, the Offeror intends to nominate sufficient number of directors so as to constitute majority of the Board upon the close of the Offers. Further announcement including details of proposed directors will be made by the Company 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 Warrants. If the Stock Exchange believes that: . a false market exists or may exist in the Shares or 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 Warrants. The directors 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 not less than 25% of the Shares and Warrants will be held by the general public upon the close of the Offers. If the Company remains a listed company, any acquisition or disposal of assets by the Company will be subject to the provisions of the Listing Rules. The Stock Exchange has the discretion to require the Company to issue a circular to its shareholders, and for information only, warrantholders irrespective of the size of the proposed transaction, particularly when such proposed transaction represents a departure from the principle activities of the Company. The Stock Exchange also has the power to aggregate a series of transactions 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. The unconditional cash offers made by Far-Reaching By an offer document dated 28th December, 1999, Far-Reaching, through Somerley Limited, has made unconditional cash offers pursuant to the Code to acquire all the issued Shares and outstanding Warrants other than those owned by Far-Reaching and parties acting in concert with it. The Existing Offers were originally scheduled to be closed on Tuesday, 18th January, 2000. In view of the Offers, Far-Reaching has given its consent in writing to extend the closing of the Existing Offers to 21st January, 2000. It is expected that the offeree document will be despatched with the Executive's consent under Rule 8.4 of the Code in response to the Existing Offers will be despatched to the Shareholders and Warrantholders on or around 14th January, 2000. General A document setting out the terms of the Offers, a letter from an independent financial adviser, the recommendation from the Independent Board Committee and the acceptance and transfer forms will be sent to Shareholders and Warrantholders as soon as practicable in accordance with the Code. The following statement is made at the request of the Stock Exchange. The directors of the Company noted the recent increases in the prices of the Shares and Warrants and wish to state that save for the Offers and the Existing Offers, the directors of the Company are not aware of any reasons for such increases and the directors of the Company also confirm that there are no negotiations or agreements relating to intended acquisitions or realisations which are discloseable under paragraph 3 of the Listing Agreement, neither is the Board aware of any matter discloseable under the general obligation imposed by paragraph 2 of the Listing Agreement, which is or may be of a price-sensitive nature. Trading in the securities of the Company on the Stock Exchange was suspended at 10:58 a.m. on 10th January, 2000 at the request of the Company pending publication of this joint announcement. The Company has applied to the Stock Exchange for the resumption of trading of the securities of the Company on the Stock Exchange starting from 10:00 a.m. on 13th January, 2000. Made by the order of the Board, the directors of the Company of which individually and jointly accept responsibility for the accuracy of the above statement. By Order of the Board By Order of the Board By Order of the Board Best Millennium Limited Far-Reaching Limited Wah Yik Holdings Company Limited Chan Kwok Keung, Charles Yam Tak Cheung Hui Mang Mang Director Sole director Chairman Hong Kong, 12th January, 2000 The directors of the Offeror accept full responsibility for the accuracy of the information contained in this announcement except those relating to Far-Reaching and the Company and confirm, having made all reasonable inquiries, that to the best of their knowledge, the opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement misleading. The director of Far-Reaching accepts full responsibility for the accuracy of the information contained in this announcement except those relating to the Offeror and the Company and confirms, having made all reasonable inquiries, that to the best of his knowledge, the opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, 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 except those relating to the Offeror, Far-Reaching and Mr. Yam and confirm, having made all reasonable inquiries, that to the best of their knowledge, the opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement misleading.