THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular 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 shares in Viva Goods Company Limited, you should at once hand this circular, together with the enclosed form of proxy, to the purchaser(s) or the transferee(s) or to the bank manager, licensed securities dealer or other 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).

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

This circular appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of Viva Goods Company Limited.

VIVA GOODS COMPANY LIMITED

非凡領越有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 933)

(1) PROPOSED ISSUE OF NEW SHARES UNDER SPECIFIC MANDATE AS CONSIDERATION FOR THE CANCELLATION AND EXTINGUISHMENT OF THE SCHEME SHARES UNDER THE SCHEME AND CANCELLATION OF BOSSINI SHARE OPTIONS UNDER THE OPTION OFFER;
(2) SHARE TRANSACTION AND CONNECTED TRANSACTION; AND
(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

Financial adviser to the Offeror and the Company

TC CAPITAL

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

RAINBOW

RAINBOW CAPITAL (HK) LIMITED

淙博資本有限公司

Capitalised terms used on this cover shall have the same meanings as those defined in the circular, unless the context otherwise requires.

A notice convening the EGM to be held at 2/F., PopOffice, 9 Tong Yin Street, Tseung Kwan O, New Territories, Hong Kong on Monday, 10 February 2025 at 4:00 p.m. is set out on pages 70 to 72 of this circular. A proxy form is also enclosed. Whether or not you intend to attend and vote at the EGM, you are requested to complete and return the enclosed proxy form to the Company's Hong Kong branch share registrar, Tricor Investor Services Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong, in accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours before the time appointed for holding of the EGM or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish and in such event, the proxy form shall be deemed to be revoked.

3 January 2025

CONTENTS

Page

Definitions 1
Letter from the Board 8
Letter from the Independent Board Committee 28
Letter from Rainbow Capital 30
Appendix – General Information 62
Notice of Extraordinary General Meeting 70

DEFINITIONS

In this circular, the following expressions shall have the following meanings unless the context indicates otherwise:

"2013 Bossini Share Option Scheme"
the share option scheme of Bossini adopted on 12 November 2013

"2023 Bossini Rights Issue"
the issue by way of rights on the basis of one (1) rights share for every two (2) existing Bossini Shares held on the record date at the subscription price of HK$0.37 per rights share, details of which are set out in the prospectus dated 3 April 2023 issued by Bossini

"2023 Bossini Share Option Scheme"
the share option scheme of Bossini adopted on 15 December 2023

"Ace Leader"
Ace Leader Holdings Limited, a company incorporated in the British Virgin Islands with limited liability

"acting in concert"
has the meaning ascribed to it under the Takeovers Code, and "persons acting in concert" shall be construed accordingly

"Announcement"
the announcement dated 16 October 2024 jointly issued by the Company, the Offeror and Bossini in relation to, among others, the Proposal

"Announcement Date"
16 October 2024, being the date of the Announcement

"associate(s)"
has the meaning ascribed to it under the Listing Rules

"Authorisations"
all necessary authorisations, registrations, filings, rulings, consents, permissions and approvals (including approval in principle) in connection with the Proposal

"Board"
the board of Directors

"Bossini"
Bossini International Holdings Limited, an exempted company incorporated in Bermuda with limited liability, the shares of which are listed on the Main Board of the Stock Exchange (Stock Code: 592) and an indirect non-wholly owned subsidiary of the Company

"Bossini Board"
the board of directors of Bossini

"Bossini Director(s)"
the director(s) of Bossini

– 1 –

DEFINITIONS

“Bossini Group”	Bossini and its subsidiaries from time to time
“Bossini Optionholder(s)”	the holder(s) of the Bossini Share Option(s)
“Bossini Share(s)”	the ordinary share(s) of Bossini
“Bossini Share Option(s)” or “Bossini Option(s)”	the January 2021 Bossini Options, the March 2022 Bossini Options, the November 2022 Bossini Options and the March 2024 Bossini Options, or any one of them
“Bossini Shareholder(s)”	the holder(s) of Bossini Share(s)
“Bossini SGM”	the special general meeting of Bossini to be convened and held on the same day as the Court Meeting for the purpose of considering and, if thought fit, approving, among others, (i) a special resolution to approve any reduction of the issued share capital of Bossini by the cancellation of the Scheme Shares, and (ii) an ordinary resolution to apply the reserve created by the cancellation of the Scheme Shares to simultaneously restore the issued share capital of Bossini by the allotment and issue of an equal number of Bossini Shares (credited as fully paid) to the Offeror, or any adjournment thereof
“Companies Act”	the Companies Act 1981 of Bermuda, as amended from time to time
“Company”	Viva Goods Company Limited, a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange (Stock Code: 933) and the indirect controlling shareholder of Bossini
“connected person(s)”	has the meaning ascribed to it under the Listing Rules
“controlling shareholder”	has the meaning ascribed to it under the Listing Rules
“Court”	the Supreme Court of Bermuda
“Court Meeting”	a meeting of the Scheme Shareholders to be convened at the direction of the Court at which the Scheme (with or without modification) will be voted upon, or any adjournment thereof

DEFINITIONS

"Director(s)"
the director(s) of the Company

"Disinterested Scheme Shareholder(s)"
the Scheme Shareholders other than the Offeror Concert Parties

"Dragon City"
Dragon City Management (PTC) Limited, a company incorporated in the British Virgin Islands with limited liability

"EGM"
the extraordinary general meeting of the Company to be convened at 2/F., PopOffice, 9 Tong Yin Street, Tseung Kwan O, New Territories, Hong Kong on Monday, 10 February 2025 at 4:00 p.m. for the Independent Shareholders to consider and, if thought fit, to approve the allotment and issuance of the Shares under the Specific Mandate

"Encumbrances"
any mortgage, security, pledge, charge, lien, trust, assignment by way of security, security interest, any third party interests or rights or any other categories of encumbrances or priority right granted to the third party, including but not limited to, granting any rights in a transaction, and even if it is not a security right under the relevant laws, it is similar to security rights in terms of financial or actual economic benefits; any authorisation, representative voting power, voting trust arrangement, share option, right of first offer, right of first negotiation, right of first refusal and other right to restrict assignment; and rights to claim against encumbrance, ownership or right of use without legal title

"Executive"
the Executive Director of the Corporate Finance Division of the SFC or any delegate for the time being of the Executive Director

"Group"
the Company and its subsidiaries

"HK$"
Hong Kong dollar(s), the lawful currency of Hong Kong

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

DEFINITIONS

“Independent Board Committee” the independent board committee of the Company established to make a recommendation to the Independent Shareholders in respect of the issue of new Shares under the Specific Mandate as consideration for the cancellation and extinguishment of the Scheme Shares under the Scheme and the cancellation of Bossini Share Options under the Option Offer

“Independent Financial Adviser” or “Rainbow Capital” Rainbow Capital (HK) Limited, a corporation licensed to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO, being the independent financial adviser appointed by the Company for the purpose of advising the Independent Board Committee and the Independent Shareholders in relation to the issue of new Shares under the Specific Mandate as consideration for the cancellation and extinguishment of the Scheme Shares under the Scheme and the cancellation of Bossini Share Options under the Option Offer

“Independent Shareholders” all Shareholders other than the Shareholders with a material interest in the Proposal, the Scheme and the Option Offer

“January 2021 Bossini Option(s)” the share option(s) granted by Bossini to certain grantees on 5 January 2021

“Jumbo Top” Jumbo Top Group Limited, a company incorporated in the British Virgin Islands with limited liability

“Keystar” Keystar Limited, a company incorporated in the British Virgin Islands, all the issued shares of which are legally and beneficially owned by Mr. Bosco Law

“Last Trading Day” 14 October 2024, being the last full trading day prior to the publication of the Announcement

“Latest Practicable Date” 31 December 2024, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

“Lead Ahead” Lead Ahead Limited, a company incorporated in the British Virgin Islands with limited liability

– 4 –

DEFINITIONS

"Listing Committee" the Listing Committee of the Stock Exchange

"Listing Rules" the Rules Governing the Listing of Securities on the Stock Exchange as amended from time to time

"Long Stop Date" 30 June 2025 (or such later date as the Offeror may agree and, to the extent applicable, as the Court may direct, and in all cases, as permitted by the Executive)

"March 2022 Bossini Option(s)" the share option(s) granted by Bossini to certain grantees on 23 March 2022

"March 2024 Bossini Option(s)" the share option(s) granted by Bossini to certain grantees on 28 March 2024

"Meeting Record Date" the record date to be announced for the purpose of determining the entitlement of Scheme Shareholders to attend and vote at the Court Meeting and the entitlement of the Bossini Shareholders to attend and vote at the Bossini SGM

"Mr. Bosco Law" Mr. Law Ching Kit Bosco, a non-executive director of Bossini

"November 2021 Bossini Option(s)" the share option(s) granted by Bossini to certain grantees on 16 November 2021, all of which had subsequently lapsed

"November 2022 Bossini Option(s)" the share option(s) granted by Bossini to certain grantees on 17 November 2022

"Offeror" Dragon Leap Consumables Limited, a company incorporated in the British Virgin Islands with limited liability and an indirect wholly-owned subsidiary of the Company

"Offeror Board" the board of directors of the Offeror

"Offeror Concert Party(ies)" party(ies) acting in concert or presumed to be acting in concert with the Offeror and the Company

"Option Offer" the offer to be made by or on behalf of the Offeror to the Bossini Optionholders in relation to the cancellation of the Bossini Share Options

DEFINITIONS

"PRC"
the People's Republic of China (for the purpose of this circular, excludes Hong Kong, the Macau Special Administrative Region of the PRC, and Taiwan)

"Proposal"
the proposed privatisation of Bossini by way of the Scheme and the Option Offer, and the withdrawal of listing of Bossini Shares from the Stock Exchange on the terms and subject to the conditions set out in this circular

"Record Date"
the record date for determining entitlements of Scheme Shareholders under the Scheme and the entitlements of the Bossini Optionholders under the Option Offer

"Registrar of Companies"
the Registrar of Companies in Bermuda

"Relevant Authorities"
appropriate governments and/or governmental bodies, regulatory bodies, stock exchanges, courts or institutions, including but not limited to the Court and the Registrar of Companies

"Scheme"
the proposed scheme of arrangement of Bossini pursuant to Section 99 of the Companies Act for the implementation of the Proposal

"Scheme Condition(s)"
the condition(s) to the Proposal, details of which are set out in the section headed "Conditions to the Proposal and the Scheme" in the "Letter from the Board" in this circular

"Scheme Consideration"
the consideration for the cancellation and extinguishment of the Scheme Shares pursuant to the Scheme, being 1 new Share to be issued for every 5 Scheme Shares to be cancelled

"Scheme Document"
the composite scheme document to be despatched to the Scheme Shareholders and the Bossini Optionholders containing, inter alia, details of the Proposal

"Scheme Effective Date"
the date upon which the Scheme becomes effective in accordance with its terms

"Scheme Share(s)"
the Bossini Share(s) other than those held by the Offeror

DEFINITIONS

“Scheme Shareholder(s)”	registered holder(s) of the Scheme Shares(s) as at the Record Date
“SFC”	the Securities and Futures Commission of Hong Kong
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) as amended from time to time
“Share(s)”	ordinary share(s) at par value of HK$0.05 each in the share capital of the Company
“Shareholder(s)”	holder(s) of the Share(s)
“Specific Mandate”	the specific mandate to be granted by the Independent Shareholders to the Board at the EGM for the allotment and issuance of the Shares as consideration for the cancellation and extinguishment of the Scheme Shares and as consideration for cancellation of the Bossini Share Options
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“subsidiary” or “subsidiaries”	has the meaning ascribed to it under the Listing Rules
“Takeovers Code”	the Hong Kong Code on Takeovers and Mergers, as amended from time to time
“TMF”	TMF (Cayman) Ltd., a company incorporated in the Cayman Islands with limited liability
“Victory Mind Assets”	Victory Mind Assets Limited, a company incorporated in the British Virgin Islands with limited liability
“%”	per cent.

LETTER FROM THE BOARD

VIVA GOODS COMPANY LIMITED

非凡領越有限公司
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 933)

Executive Directors:
Mr. LI Ning (Chairman and Chief Executive Officer)
Mr. LI Chunyang
Mr. LI Qilin

Non-executive Directors:
Mr. Victor HERRERO
Mr. MA Wing Man
Ms. LYU Hong
Mr. QIAN Cheng

Independent Non-Executive Directors:
Mr. LI Qing
Mr. PAK Wai Keung, Martin
Mr. WANG Yan
Professor CUI Haitao

Registered Office:
Cricket Square
Hutchins Drive
P.O. Box 2681
Grand Cayman KY1-1111
Cayman Islands

Head office and principal place of
business in Hong Kong:
2/F., PopOffice
9 Tong Yin Street
Tseung Kwan O
New Territories
Hong Kong

3 January 2025

To the Shareholders

Dear Sir or Madam,

(1) PROPOSED ISSUE OF NEW SHARES UNDER SPECIFIC MANDATE
AS CONSIDERATION FOR THE CANCELLATION AND
EXTINGUISHMENT OF THE SCHEME SHARES UNDER THE SCHEME
AND CANCELLATION OF BOSSINI SHARE OPTIONS UNDER THE
OPTION OFFER;
(2) SHARE TRANSACTION AND CONNECTED TRANSACTION;
AND
(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the Announcement.

LETTER FROM THE BOARD

The Board, the Offeror Board and the Bossini Board jointly announced that on 14 October 2024 (after trading hours), the Board and the Offeror Board requested the Bossini Board to put forward to the Scheme Shareholders the Proposal regarding the privatisation of Bossini by the Offeror by way of a scheme of arrangement under Section 99 of the Companies Act involving (i) the reduction of the issued share capital of Bossini by the cancellation of the Scheme Shares on the Scheme Effective Date, and in consideration therefor, 1 Share will be allotted and issued to the Scheme Shareholders for every 5 Scheme Shares so cancelled, (ii) forthwith upon the issued share capital reduction referred to in (i) above, the restoration of the issued share capital of Bossini to the amount immediately before the cancellation of the Scheme Shares by means of the issuance of new Bossini Shares in the same number as the Scheme Shares (which were cancelled) to the Offeror credited as fully paid out of the credit arising in Bossini's books of account as a result of the issued share capital reduction referred to in (i) above, and (iii) the withdrawal of the listing of the Bossini Shares on the Stock Exchange following the Scheme Effective Date pursuant to Rule 6.15 of the Listing Rules.

If the Scheme is approved by the Scheme Shareholders and is sanctioned by the Court, all relevant requirements of the Companies Act are complied with, and all other Scheme Conditions are fulfilled or waived (as the case may be), the Scheme will be binding on each Scheme Shareholder, irrespective of whether or not he, she or it attends or votes at the Court Meeting or the Bossini SGM. Subject to the Scheme becoming effective, the entire issued share capital of Bossini will be owned by the Offeror upon the Scheme Effective Date.

The purpose of this circular is to provide you with, among other things, (i) further details of the Proposal, including the allotment and issuance of the Shares under the Specific Mandate; (ii) the recommendation from the Independent Board Committee; (iii) a letter of advice from Rainbow Capital to the Independent Board Committee and the Independent Shareholders in relation to the issue of new Shares under the Specific Mandate as consideration for the cancellation and extinguishment of the Scheme Shares under the Scheme and the cancellation of Bossini Share Options under the Option Offer; and (iv) a notice to convene the EGM.

TERMS OF THE PROPOSAL

As at the Latest Practicable Date, Bossini has 3,322,720,177 Bossini Shares in issue and the Offeror held 2,090,373,183 Bossini Shares. All Bossini Shares other than those held by the Offeror will be subject to the Scheme and regarded as Scheme Shares. Assuming no changes to Bossini's issued share capital from the Latest Practicable Date to the Scheme Effective Date and assuming no Bossini Share Options are exercised, the maximum number of Bossini Shares subject to the Scheme will be 1,232,346,994 Bossini Shares. Assuming all Bossini Share Options are exercised as at the Scheme Effective Date and assuming no other changes to Bossini's issued share capital from the Latest Practicable Date to the Scheme Effective Date, the maximum number of Bossini Shares subject to Scheme will be 1,400,465,808 Bossini Shares.

LETTER FROM THE BOARD

Under the Proposal, upon the fulfilment of the Scheme Conditions and the Scheme becoming effective, all Scheme Shares will be cancelled and the Scheme Shareholders will be entitled to receive from the Company new Shares to be issued:

For every 5 Scheme Shares cancelled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 new Share

If, after the Latest Practicable Date, any dividend and/or other distribution and/or other return of capital is announced, declared or paid in respect of Bossini Shares, the Offeror reserves the right to reduce the Scheme Consideration by all or any part of the amount or value of such dividend, distribution and/or as the case may be, return of capital after consultation with the Executive, in which case any reference in the Announcement, the Scheme Document or any other announcement or document to the Scheme Consideration will be deemed to be a reference to the Scheme Consideration as so reduced.

As at the Latest Practicable Date, Bossini has not announced or declared any dividend, distribution or other return of capital which remains unpaid.

The exchange ratio of 1 Share for every 5 Scheme Shares has been determined on a commercial basis after taking into account the prevailing and historical market price levels and volatility of both the Shares and the Bossini Shares traded on the Stock Exchange, the audited consolidated net asset value per Share and per Bossini Share as of 31 December 2023, and other privatisation transactions in Hong Kong. Based on the closing price of HK$0.54 per Share as quoted on the Stock Exchange on the Last Trading Day, the ascribed value of the Scheme Consideration of HK$0.108 per Bossini Share represents a premium of approximately 22.73%, 12.50% and 5.88% over the average closing price of approximately HK$0.088, HK$0.096 and HK$0.102 per Bossini Share for the 30, 90 and 120 trading days up to and including the Last Trading Day, respectively. Such premium, represented by the ascribed value of the Scheme Consideration over the average closing price per Bossini Share for the 30, 90 and 120 trading days up to and including the Last Trading Day, intends to provide incentives for the Scheme Shareholders to support the Proposal, and is in line with other privatisation transactions in Hong Kong.

10 -

LETTER FROM THE BOARD

As at the Latest Practicable Date, there were 168,118,814 outstanding Bossini Share Options. Details of the outstanding Bossini Share Options and the relevant exercise prices are set out below:

	Outstanding Bossini Share Options	Exercise Price
January 2021 Bossini Options	29,746,802	HK$0.455
March 2022 Bossini Options	1,669,444	HK$0.659
November 2022 Bossini Options	1,002,068	HK$0.389
March 2024 Bossini Options	135,700,500	HK$0.128

Note: Since the Announcement Date and up to the Latest Practicable Date, all of the outstanding November 2021 Bossini Options and 3,000,000 March 2024 Bossini Options had lapsed.

The Offeror will make an appropriate offer to all the Bossini Optionholders in accordance with Rule 13 of the Takeovers Code. The Option Offer will be conditional upon the Scheme becoming effective. As the exercise prices for all outstanding Bossini Share Options are higher than the ascribed value of HK$0.108 per Bossini Share under the Scheme, the Bossini Share Options are "out of money". As such, the Option Offer will be made on the following terms:

For every 1,000 Bossini Options cancelled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . new Share

Following acceptance of the Option Offer, the relevant Bossini Share Options together with all rights attaching thereto will be entirely cancelled and renounced.

According to the 2013 Bossini Share Option Scheme, in the event of a general or partial offer, whether by way of takeover or scheme of arrangement, is made to all Bossini Shareholders, Bossini shall use all reasonable endeavours to procure such offer to be extended to all grantees on the same terms, mutatis mutandis, and assuming that they will become, by the exercise in full of Bossini Share Options granted to them, shareholders of Bossini. If such offer becomes or is declared unconditional, a grantee shall be entitled to exercise his or her Bossini Share Options (to the extent, not already exercised) to its full extent or to the extent specified in the grantee's notice to Bossini in exercise of his or her Bossini Share Options at any time before the close of such offer (or any revised offer).

According to the 2023 Bossini Share Option Scheme, in the event of a general offer (whether by way of takeover offer or scheme of arrangement or otherwise in like manner) being made to all the Bossini Shareholders and such offer is approved by the requisite resolutions of Bossini Shareholders in general meeting, Bossini shall forthwith give notice thereof to all grantees, and thereupon the grantees may exercise the Bossini Share Options (to the extent vested and exercisable and not already exercised as at the date of the Bossini SGM) either in full or in part within such period as shall be notified by Bossini to the grantees.

LETTER FROM THE BOARD

If any Bossini Share Options are not exercised within the prescribed period, the Bossini Share Options shall lapse on the Scheme Effective Date.

Pursuant to Rule 13 of the Takeovers Code, the Offeror is required to make appropriate cash offer to the Bossini Optionholders. The consideration for the cancellation of each Bossini Share Options would normally be the see-through price which represents the excess of the Scheme Consideration per Scheme Shares and the exercise price of each Bossini Share Option. As the exercise prices for all outstanding Bossini Share Options are higher than the ascribed value of HK$0.108 per Bossini Share under the Scheme, the Bossini Share Options are “out of money”. Therefore, the exchange ratio for the Option Offer is set at a nominal value of every 1,000 Bossini Options cancelled in exchange for one new Share.

In the event that the outstanding Bossini Share Options or part thereof are exercised, thus resulting in the issue of new Bossini Shares prior to the Record Date, such new Bossini Shares will form part of the Scheme Shares and the holder of such new Bossini Shares will be eligible to receive the Scheme Consideration under the Scheme. In addition, any Bossini Shares issued on or prior to the Meeting Record Date will entitle their holders to attend and vote at the Court Meeting and at the Bossini SGM.

Based on the above exchange ratio, assuming no changes to either the Company's issued share capital and Bossini's issued share capital from the Latest Practicable Date to the Scheme Effective Date, assuming no Bossini Share Options are exercised as at the Scheme effective Date, and subject to the Scheme becoming effective and the Option Offer being accepted by the Bossini Optionholders, the Company will allot and issue a total of approximately 246,469,398 Shares to the Scheme Shareholders and approximately 168,118 Shares to the Bossini Optionholders, representing (i) approximately 2.54% of the issued share capital of the Company as at the Latest Practicable Date; and (ii) approximately 2.47% of the enlarged issued share capital of the Company immediately upon completion of the Proposal.

COMPARISON OF VALUE

Based on the closing price of HK$0.54 per Share as quoted on the Stock Exchange on the Last Trading Day, the value of the Scheme Consideration is equivalent to approximately HK$0.108 for every Scheme Share, which represents:

(a) a premium of approximately 0.93% over the closing price of HK$0.107 for every Bossini Share as quoted on the Stock Exchange on the Latest Practicable Date;

(b) a discount of approximately 12.20% to the closing price of HK$0.123 for every Bossini Share as quoted on the Stock Exchange on the Last Trading Day;

(c) a discount of approximately 7.69% to the average closing price of approximately HK$0.117 for every Bossini Share as quoted on the Stock Exchange for the 10 trading days up to and including the Last Trading Day;

12 -

LETTER FROM THE BOARD

(d) a premium of approximately 22.73% over the average closing price of approximately HK$0.088 for every Bossini Share as quoted on the Stock Exchange for the 30 trading days up to and including the Last Trading Day;

(f) a discount of approximately 0.92% to the average closing price of approximately HK$0.109 for every Bossini Share as quoted on the Stock Exchange for the 180 trading days up to and including the Last Trading Day.

Based on the closing price of HK$0.610 per Share as quoted on the Stock Exchange on the Latest Practicable Date, the value of the Scheme Consideration is equivalent to approximately HK$0.122 for every Scheme Share, which represents a premium of approximately 14.02% over the closing price of HK$0.107 for every Bossini Share as quoted on the Stock Exchange on the Latest Practicable Date.

Based on the consolidated net asset value per Share of approximately HK$0.913 as at 30 June 2024 (based on the unaudited consolidated net asset value of the Company of approximately HK$8,878,828,000 as at 30 June 2024 and 9,723,772,727 Shares in issue as at the same date), the implied value of 1 Bossini Share (for each Scheme Share to be cancelled under the Scheme) is approximately HK$0.183, which represents a premium of approximately 289.4% over the consolidated net asset value per Bossini Share of approximately HK$0.047 as at 30 June 2024 (based on the unaudited consolidated net asset value of Bossini of approximately HK$157,203,000 as at 30 June 2024 and 3,322,720,177 Bossini Shares in issue as at the same date).

13 -

LETTER FROM THE BOARD

The Company considered that the Scheme Consideration, which represented a premium of 200% or more over the consolidated net asset value per Bossini Share as at 30 June 2024 and as at 31 December 2023 to be fair and reasonable after taking into account the following factors: (i) Bossini is an asset-light company and therefore the net asset value per Bossini Share is generally low; and (ii) the premium, represented by the implied value of the Scheme Consideration over the 30, 90 and 120 trading days up to and including the Last Trading Day, is necessary to provide sufficient incentives for the Scheme Shareholders to support the Proposal.

CONDITIONS TO THE PROPOSAL AND THE SCHEME

The implementation of the Proposal is, and the Scheme will become effective and binding on Bossini and all Scheme Shareholders, subject to the satisfaction or waiver (as applicable) of the following Scheme Conditions:

(a) the approval of the Scheme (by way of poll) by a majority in number of Scheme Shareholders representing not less than three-fourths in value of the Scheme Shares held by the Scheme Shareholders present and voting either in person or by proxy at the Court Meeting;

(b) the approval of the Scheme (by way of poll) by at least 75% of the votes attaching to the Scheme Shares held by the Disinterested Scheme Shareholders that are voted either in person or by proxy at the Court Meeting, provided that the number of votes cast (by way of poll) against the resolution to approve the Scheme is not more than 10% of the votes attaching to all the Scheme Shares held by the Disinterested Scheme Shareholders;

(c) the passing by the Bossini Shareholders of a special resolution at the Bossini SGM to approve any reduction of the issued share capital of Bossini by the cancellation of the Scheme Shares, and an ordinary resolution to apply the reserve created by the cancellation of the Scheme Shares to simultaneously restore the issued share capital of Bossini by the allotment and issue of an equal number of Bossini Shares (credited as fully paid) to the Offeror;

(d) the sanction of the Scheme (with or without modification) by the Court and the delivery to the Registrar of Companies of a copy of the order of the Court for registration;

(e) the necessary compliance with the procedural requirements and conditions, if any, of Section 46(2) of the Companies Act in relation to any reduction of the issued share capital of Bossini referred to in (c) above;

(f) the Company having obtained approval from the Independent Shareholders for the specific mandate for the allotment and issuance of the Shares under the Proposal in compliance with the Listing Rules;

14 -

LETTER FROM THE BOARD

(g) the granting by the Stock Exchange of the listing of, and permission to deal in, the Shares which fall to be issued pursuant to the Proposal, on the Main Board of the Stock Exchange;

(h) all Authorisations having been obtained or made from, with or by (as the case may be) the Relevant Authorities in Bermuda, Hong Kong, and/or any other relevant jurisdictions and, if applicable, any waiting periods having expired or terminated (in each case where such Authorisation is material in the context of the Bossini Group as a whole and in the context of the Proposal);

(i) the Authorisations remaining in full force and effect without variation, and all necessary statutory or regulatory obligations in all relevant jurisdictions having been complied with and no requirement having been imposed by any Relevant Authorities which is not expressly provided for, or is in addition to requirements expressly provided for, in relevant laws, rules, regulations or codes in connection with the Proposal or any matters, documents (including circulars) or things relating thereto, in each aforesaid case up to and at the time when the Scheme becomes binding and effective in accordance with its terms;

(j) if required, the obtaining by the Offeror, the Company or Bossini of such other necessary consent, approval, permission, waiver or exemption which may be required from any Relevant Authorities under applicable laws and regulations or other third parties which are necessary for the performance of the Scheme;

(k) no government, governmental, quasi-governmental, statutory or regulatory body, court or agency in any jurisdiction having taken or instituted any action, proceeding, suit, investigation or enquiry (or enacted, made or proposed, and there not continuing to be outstanding, any statute, regulation, demand or order) that would make the Scheme or its implementation in accordance with its terms void, unenforceable, illegal or impracticable (or which would impose any material and adverse conditions or obligations with respect to the Scheme or its implementation in accordance with its terms);

(l) since the Announcement Date, there having been no material adverse change in the business, financial or trading position or prospects of any member of the Bossini Group to an extent which is material in the context of the Bossini Group taken as a whole or in the context of the Proposal; and

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LETTER FROM THE BOARD

(m) since the Announcement Date, there not having been instituted any material litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Bossini Group is a party (whether as plaintiff or defendant or otherwise) and no such proceedings having been threatened in writing against any such member and no investigation by any government or quasi-governmental, supranational, regulatory or investigative body or court against or in respect of any such member or the business carried on by any such member having been threatened in writing, announced, instituted or remaining outstanding by, against or in respect of any such member in each case which is material and adverse in the context of the Bossini Group taken as a whole or in the context of the Proposal.

The Scheme Conditions (a) to (k) above are not waivable.

The Offeror reserves the right to waive any of the Scheme Conditions (l) and/or (m), either in whole or in part, either generally or in respect of any particular matter. All of the Scheme Conditions will have to be satisfied or validly waived (as applicable), on or before the Long Stop Date, otherwise the Scheme will not become effective. Subject to the Scheme Conditions being satisfied or validly waived (as applicable), the Scheme will become effective and binding on the Company and all Scheme Shareholders.

In respect of the Scheme Conditions (h) to (j), other than those set out in Scheme Conditions (a) to (g) (inclusive), the Offeror and the Company are not currently aware of any Authorisations or consents which are required.

As at the Latest Practicable Date, the Offeror and the Company are not aware of any circumstances which may result in Scheme Condition (k) not being satisfied.

If the Scheme Conditions are not satisfied or waived (as appropriate) on or before the Long Stop Date, the Proposal will lapse. If the Scheme is withdrawn, not approved or lapses, the listing of the Bossini Shares on the Stock Exchange will not be withdrawn.

The Option Offer is conditional upon the Scheme becoming effective.

As of the Latest Practicable Date, none of the Scheme Conditions had been fulfilled or waived (as applicable).

When the Scheme Conditions are satisfied or waived (as applicable), the Scheme will become effective and binding on Bossini and all the Scheme Shareholders.

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LETTER FROM THE BOARD

Shareholders and potential investors of the Company should be aware that the Proposal is subject to the Scheme Conditions being fulfilled or waived, as applicable, and therefore the Proposal may or may not become effective. Shareholders and potential investors of the Company should therefore exercise caution when dealing in the securities of the Company. Persons who are in doubt as to the action they should take should consult their stockbroker, bank manager, solicitor or other professional advisers.

WITHDRAWAL OF LISTING OF THE BOSSINI SHARES ON THE MAIN BOARD

Upon the Scheme Effective Date, all Scheme Shares will be cancelled and the share certificates for the Scheme Shares will thereafter cease to have effect as documents or evidence of title. Bossini will be privatised by way of a scheme of arrangement under Section 99 of the Companies Act and it is the intention of the Offeror and the Company not to retain the listing of Bossini on the Stock Exchange after the implemental of the Proposal. Bossini will apply to the Stock Exchange for the withdrawal of the listing of the Bossini Shares on the Stock Exchange pursuant to Rule 6.15(2) of the Listing Rules.

The Scheme will lapse if it does not become effective on or before the Long Stop Date.

PROPOSED ISSUE OF NEW SHARES UNDER SPECIFIC MANDATE AS CONSIDERATION FOR THE CANCELLATION AND EXTINGUISHMENT OF THE SCHEME SHARES UNDER THE SCHEME AND CANCELLATION OF BOSSINI SHARE OPTIONS UNDER THE OPTION OFFER

The Shares to be issued under the Specific Mandate will be free from all Encumbrances, and together with all rights attaching to them, including the right to receive all dividends and other distributions, if the record time for determining the entitlement to such dividends and distributions falls on or after the date of issue of the new Shares, and will rank pari passu in all respects with all other Shares then in issue.

The Specific Mandate, if approved, will be valid until the earlier of completion of the Proposal or lapse of the Scheme.

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LETTER FROM THE BOARD

Number of Shares to be issued assuming no Bossini Share Options are exercised

Assuming no changes to either the Company's issued share capital and Bossini's issued share capital from the Latest Practicable Date to the Scheme Effective Date, assuming no Bossini Share Options are exercised as at the Scheme Effective Date, and subject to the Scheme becoming effective and the Option Offer being accepted by the Bossini Optionholders, the Company will allot and issue a total of approximately 246,469,398 Shares to the Scheme Shareholders and approximately 168,118 Shares to the Bossini Optionholders, representing (i) approximately 2.54% of the issued share capital of the Company as at the Latest Practicable Date; and (ii) approximately 2.47% of the enlarged issued share capital of the Company immediately upon completion of the Proposal. Out of the aggregate of 246,637,516 Shares to be allotted and issued under the Specific Mandate, approximately 70,042,653 Shares will be allotted and issued to the connected persons of the Company for cancellation and extinguishment of approximately 349,551,530 Scheme Shares and cancellation of approximately 132,351,437 Bossini Share Options, representing approximately 0.72% of the issued share capital of the Company as at the Latest Practicable Date; and (ii) approximately 0.70% of the enlarged issued share capital of the Company immediately upon completion of the Proposal.

Number of Shares to be issued assuming all Bossini Share Options are exercised

Assuming all Bossini Share Options are exercised as at the Scheme Effective Date and assuming no changes to either the Company's issued share capital and Bossini's issued share capital from the Latest Practicable Date to the Scheme Effective Date, and subject to the Scheme becoming effective, the Company will allot and issue a total of approximately 280,093,160 Shares to the Scheme Shareholders, representing (i) approximately 2.88% of the issued share capital of the Company as at the Latest Practicable Date; and (ii) approximately 2.80% of the enlarged issued share capital of the Company immediately upon completion of the Proposal. The aggregate maximum value of consideration to the Scheme Shareholders under the Proposal is approximately HK$170.9 million based on the closing price of HK$0.610 per Share on the Latest Practicable Date. Out of the 280,093,160 Shares to be allotted and issued under the Specific Mandate, approximately 96,380,593 Shares will be allotted and issued to the connected persons of the Company for cancellation and extinguishment of approximately 481,902,967 Scheme Shares, representing approximately 0.99% of the issued share capital of the Company as at the Latest Practicable Date; and (ii) approximately 0.96% of the enlarged issued share capital of the Company immediately upon completion of the Proposal. The aggregate maximum value of consideration to the connected persons of the Company under the Proposal is approximately HK$58.8 million based on the closing price of HK$0.610 per Share on the Latest Practicable Date.

An application will be made by the Company to the Listing Committee for the approval for and listing of, and permission to deal in, the new Shares, to be allotted and issued under the Specific Mandate, on the Main Board of the Stock Exchange.

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LETTER FROM THE BOARD

The Company shall issue the Shares to the Scheme Shareholders and the Bossini Optionholders for the settlement of the Scheme Consideration and the Option Cancellation Price within seven Business Days after the Scheme Effective Date.

CONNECTED TRANSACTION

Set out in the table below are details of (i) the number of Bossini Shares and Bossini Share Options held by the following directors of Bossini Group as at the Latest Practicable Date; and (ii) the number Shares that the following directors of Bossini Group will be entitled under the Scheme and the Option Offer:

Name	Position	Number of Bossini Shares	Number of Bossini Share Options	Number of Shares entitled under the Scheme and the Option Offer (assuming no Bossini Share Options are exercised)	Number of Shares entitled under the Scheme and the Option Offer (assuming all Bossini Share Options are exercised)
Mr. Zhao Jianguo^{1}	Executive director and chairman of Bossini	–	39,067,057	39,067	7,813,411
Mr. Cheung Chi^{2}	Executive director and chief executive officer of Bossini	–	44,174,689	44,174	8,834,937
Ms. Yu Xin^{3}	Executive director of Bossini	1,156,000	9,808,942	241,008	2,192,988
Mr. Bosco Law^{4}	Non-executive director of Bossini	348,395,530	6,033,529	69,685,139	70,885,811
Mr. Lee Kwok Ming	Independent non-executive director of Bossini	–	1,609,041	1,609	321,808
Prof. Sin Yat Ming	Independent non-executive director of Bossini	–	804,670	804	160,934
Mr. Cheong Shin Keong	Independent non-executive director of Bossini	–	804,670	804	160,934
Mr. Wong Siu Pan^{5}	Director of certain Bossini’s subsidiaries	–	10,002,068	10,002	2,000,413
Mr. Chow Kai Ming	Director of certain Bossini’s subsidiaries	–	8,022,352	8,022	1,604,470
Ms. Chong Yin Ling Sharon	Director of certain Bossini’s subsidiaries	–	12,024,419	12,024	2,404,883

Notes:

Mr. Zhao Jianguo is an executive director of Bossini and the brother-in-law of Mr. Li Ning. As at the Latest Practicable Date, Mr. Zhao Jianguo held 39,067,057 Bossini Share Options and 289,666,667 Shares. Mr. Zhao Jianguo was also interested in 12,963,200 Shares held by Double Essence Limited which was owned as to 50% by Mr. Zhao Jianguo and 50% by Ms. Li Ying (the spouse of Mr. Zhao Jianguo) respectively.
Mr. Cheung Chi is an executive director of Bossini, the chief financial officer of the Company and a director of the Offeror. He is also a director of various subsidiaries of the Company. As at the Latest Practicable Date, Mr. Cheung Chi held 44,174,689 Bossini Share Options and 52,200,000 Shares.

LETTER FROM THE BOARD

Ms. Yu Xin is an executive director of Bossini and is a niece of the spouse of Mr. Li Ning. As at the Latest Practicable Date, Ms. Yu Xin held 1,156,000 Bossini Shares, 9,808,942 Bossini Share Options and 35,000,000 Shares.
Mr. Bosco Law is a non-executive director of Bossini and the sole shareholder of Keystar. As at the Latest Practicable Date, (a) Keystar owned 348,395,530 Bossini Shares; and (b) Mr. Bosco Law held 6,033,529 Bossini Share Options.
Mr. Wong Siu Pan is a director of certain Bossini's subsidiaries. As at the Latest Practicable Date, Mr. Wong Siu Pan held 10,002,068 Bossini Share Options and 223,000 Shares.

As each of the directors of the Bossini Group as set out in the table above is a connected person of the Company at the subsidiary level, the issue of Shares under the Specific Mandate to such persons pursuant to the Proposal constitutes connected transactions of the Company and is subject to reporting, announcement, circular and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

The original acquisition cost of 1,156,000 Bossini Shares held by Ms. Yu Xin and 348,395,530 Bossini Shares held by Mr. Bosco Law was approximately HK$0.5 million and approximately HK$56.0 million, respectively.

SHAREHOLDING STRUCTURE OF THE COMPANY

The table below sets out the shareholding structure of the Company as at the Latest Practicable Date and immediately upon the allotment and issuance of new Shares under the Proposal:

	As at the Latest Practicable Date		Assuming there is no other change in the shareholding of the Company (including exercise of share options and conversion of convertible bonds of the Company)Immediately upon the Scheme becoming effective				Assuming all share options and convertible bonds of the Company are fully exercised/convertedImmediately upon the Scheme becoming effective
	Number of Shares	Approximate (%)	Number of Shares	Approximate (%)	Number of Shares	Approximate (%)	Number of Shares	Approximate (%)	Number of Shares	Approximate (%)
Directors
Mr. Li Ning†	5,833,951,151	60.00	5,833,951,151	58.51	5,833,951,151	58.32	6,705,951,151	55.58	6,705,951,151	55.42
Mr. Li Chinyong	15,451,669	0.16	15,451,669	0.15	15,451,669	0.15	71,451,669	0.59	71,451,669	0.59
Mr. Victor Herrero	29,168,000	0.30	29,168,000	0.29	29,168,000	0.29	63,168,000	0.52	63,168,000	0.52
Mr. Ma Wing Man	2,000,000	0.02	2,000,000	0.02	2,000,000	0.02	9,600,000	0.08	9,600,000	0.08
Professor Cai Haitao	4,984,000	0.05	4,984,000	0.05	4,984,000	0.05	6,784,000	0.06	6,784,000	0.06
Bossini Group's Directors
Mr. Zhao Jianguo†	302,629,867	3.11	302,668,934	3.04	310,443,278	3.10	311,002,267	2.58	318,776,611	2.63
Mr. Chung Chi†	52,200,000	0.54	52,244,174	0.52	61,034,937	0.61	172,244,174	1.43	181,034,937	1.50
Ms. Yu Xin†	35,000,000	0.36	35,241,008	0.35	37,192,988	0.37	185,241,008	1.54	187,192,988	1.55
Mr. Bosco Law†	-	-	69,685,139	0.70	70,885,811	0.71	69,685,139	0.58	70,885,811	0.59
Mr. Lee Kwok Ming†	-	-	1,609	0.00	321,808	0.00	1,609	0.00	321,808	0.00
Prof. Sin Yat Ming†	-	-	804	0.00	160,934	0.00	804	0.00	160,934	0.00
Mr. Chong Shin Kwong†	-	-	804	0.00	160,934	0.00	804	0.00	160,934	0.00
Mr. Wong Siu Pan††	223,000	0.00	233,002	0.00	2,223,413	0.02	233,002	0.00	2,223,413	0.02
Scheme Shareholders (other than Mr. Bosco Law and Ms. Yu Xin) and Bossini Optionholders (other than Bossini Directors and Mr. Wong Siu Pan)
Mr. Li Chao††	-	-	176,614,909	1.79	187,721,924	1.89	176,614,909	1.45	187,721,924	1.55
	60,000,000	0.62	60,000,000	0.60	60,000,000	0.60	60,000,000	0.50	60,000,000	0.50
Public Shareholders
	3,388,165,040	34.84	3,388,165,040	33.98	3,388,165,040	33.87	4,233,299,040	35.09	4,233,299,040	34.99
Total
	9,723,772,727	100.00	9,970,410,243	100.00	10,003,865,887	100.00	12,065,277,576	100.00	12,098,733,220	100.00

LETTER FROM THE BOARD

Notes:

All percentages in the above table are approximations.
Mr. Li Ning is interested in 21,508,000 Shares, and is deemed to be interested in 5,812,443,151 Shares in aggregate through his interests in Lead Ahead, Victory Mind Assets and Dragon City, respectively as follows: (a) 2,132,420,382 Shares are held by Lead Ahead, which is owned as to 60% by Mr. Li Ning. Mr. Li Ning is also a director of Lead Ahead; (b) 1,680,022,769 Shares are held by Victory Mind Assets which is owned as to 57% by Ace Leader and 38% by Jumbo Top. All shares of Ace Leader are held by TMF in its capacity as trustee of a discretionary trust. Mr. Li Ning is the settlor of the trust and is therefore deemed to be interested in such 1,680,022,769 Shares. Mr. Li Ning is a director of each of Victory Mind Assets and Ace Leader; and (c) 2,000,000,000 Shares are held by Dragon City in its capacity as trustee of a unit trust, the units of which are owned as to 60% by TMF and as to 40% by TMF, each as the trustee of separate discretionary trust. Mr. Li Ning is the 60% shareholder of Dragon City and a founder of the unit trust and therefore deemed to be interested in such 2,000,000,000 Shares. Mr. Li Ning is a director of Dragon City. Mr. Li Ning is also a director of the Offeror. Mr. Li Ning is also interested in (i) the convertible bonds in the principal amount of HK$278,850,000 which are convertible into 858,000,000 Shares at the conversion price of HK$0.325 per Share, and has no maturity date; and (ii) 14,000,000 share options of the Company which are exercisable into 14,000,000 Shares.
Mr. Zhao Jianguo is an executive director of Bossini and the brother-in-law of Mr. Li Ning. As at the Latest Practicable Date, Mr. Zhao Jianguo held 39,067,057 Bossini Share Options and 289,666,667 Shares. Mr. Zhao Jianguo was also interested in (i) 12,963,200 Shares held by Double Essence Limited which was owned as to 50% by Mr. Zhao Jianguo and 50% by Ms. Li Ying (the spouse of Mr. Zhao Jianguo) respectively; and (ii) 8,333,333 share options of the Company which are exercisable into 8,333,333 Shares. Ms. Li Ying, the spouse of Mr. Zhao Jianguo, had personal interest in the convertible bonds in the principal amount of HK$227,500,000 which are convertible into 700,000,000 Shares at the conversion price of HK$0.325 per Share, and has no maturity date.
Mr. Cheung Chi is an executive director of Bossini, the chief financial officer of the Company and a director of the Offeror. As at the Latest Practicable Date, Mr. Cheung Chi held 44,174,689 Bossini Share Options and 52,200,000 Shares. Mr. Cheung Chi was also interested in 120,000,000 share options of the Company which are exercisable into 120,000,000 Shares.
Ms. Yu Xin is an executive director of Bossini and is a niece of the spouse of Mr. Li Ning. As at the Latest Practicable Date, Ms. Yu Xin held 1,156,000 Bossini Shares, 9,808,942 Bossini Share Options and 35,000,000 Shares. Ms. Yu Xin was interested in the convertible bonds in the principal amount of HK$48,750,000 which are convertible into 150,000,000 Shares at the conversion price of HK$0.325 per Share, and has no maturity date.
Mr. Bosco Law is a non-executive director of Bossini and the sole shareholder of Keystar. As at the Latest Practicable Date, (a) Keystar owned 348,395,530 Bossini Shares; and (b) Mr. Bosco Law held 6,033,529 Bossini Share Options.
Mr. Lee Kwok Ming is an independent non-executive director of Bossini. As at the Latest Practicable Date, Mr. Lee Kwok Ming held 1,609,041 Bossini Share Options.
Prof. Sin Yat Ming is an independent non-executive director of Bossini. As at the Latest Practicable Date, Prof. Sin Yat Ming held 804,670 Bossini Share Options.
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LETTER FROM THE BOARD

Mr. Cheong Shin Keong is an independent non-executive director of Bossini. As at the Latest Practicable Date, Mr. Cheong Shin Keong held 804,670 Bossini Share Options.
Mr. Wong Siu Pan is a director of certain Bossini's subsidiaries. As at the Latest Practicable Date, Mr. Wong Siu Pan held 10,002,068 Bossini Share Options and 223,000 Shares.
Mr. Li Chun is a controlling shareholder of the Company.
As at the Latest Practicable Date, there were (i) 386,867,333 outstanding share options of the Company; (ii) convertible bonds in the principal amount of HK$278,850,000 held by Mr. Li Ning which were convertible into 858,000,000 Shares at the conversion price of HK$0.325 per Share, and has no maturity date; (iii) convertible bonds in the principal amount of HK$227,500,000 held by Ms. Li Ying, the spouse of Mr. Zhao Jianguo, which were convertible into 700,000,000 Shares at the conversion price of HK$0.325 per Share, and has no maturity date; and (iv) convertible bonds in the principal amount of HK$48,750,000 held by Ms. Yu Xin which are convertible into 150,000,000 Shares at the conversion price of HK$0.325 per Share, and has no maturity date. The table above is for illustrative purpose only to show the fully diluted effect in case all share options of the Company and the convertible bonds of the Company are exercised and/or converted. The exercise of the share options and conversion of the convertible bonds of the Company are subject to the compliance with the Listing Rules, including but not limited to, the public float requirement under the Listing Rules.

REASONS AND BENEFITS OF THE PROPOSAL

The listed platform has provided limited equity financing capabilities

Bossini has faced a prolonged period of financial challenges with consistently recorded losses from its operations since 2018 that necessitated the need for external fundings. The Board considers that due to the low liquidity and the relative underperformance in the trading of the Bossini Shares, there will be difficulties to a certain extent for Bossini to raise funds from public equity markets, which the Board believes is unlikely to see any significant improvement in the near term.

The Board has reviewed the liquidity of the Bossini Shares during the period from November 2022 up to the Last Trading Day (the "Review Period"). The monthly average daily trading volume of the Bossini Shares for the respective month or period during the Review Period ranged from approximately 301,475 Bossini Shares in October 2023 to approximately 4,886,953 Bossini Shares during the period from 2 October 2024 to the Last Trading Day, representing approximately 0.0091% to 0.1471% of the total issued Bossini Shares and approximately 0.0342% to 0.5536% of the issued Bossini Shares held by the public. Hence, the Board is of the view that the low liquidity of Bossini Shares has continued for a relatively long period of time.

LETTER FROM THE BOARD

In April 2023, Bossini conducted the 2023 Bossini Rights Issue on the basis of one (1) rights share for every two (2) Bossini Shares then existing. 363,612,219 rights shares were offered to the public Bossini Shareholders who then held 727,224,439 Bossini Shares. However, only 155,301,025 rights shares, representing 42.71% of the total number of right shares offered to the public Bossini Shareholders, were ultimately subscribed by the then public Bossini Shareholders. Although the subscription price for the 2023 Bossini Rights Issue represented a discount of approximately 21.28% to the closing price of the Bossini Shares on 24 February 2023, the public Bossini Shareholders' subscription of the 2023 Bossini Rights Issue was limited. As disclosed in the prospectus in respect of the 2023 Bossini Rights Issue, the Bossini Directors had considered other debt/equity fund raising alternatives such as bank borrowings, placing or open offer. The Bossini Directors noted that bank borrowings will carry interest costs and may require the provision of security and creditors will rank before the Bossini Shareholders, and placings will dilute the interests of Bossini Shareholders without giving them the opportunity to take part in the exercise. In view of Bossini's financial which has been loss making since 2018, it may also be difficult to find investors for potential placing of Bossini Shares. In view of the above, the Board is of the view that Bossini's equity financing capabilities is limited.

Taking into account (i) the historical thin liquidity and general downward trend in the share price of the Bossini Shares during the Review Period; and (ii) the relatively unfavourable response of public Bossini Shareholders towards the 2023 Bossini Rights Issue, the Board is of the view that the listed platform has provided limited equity financing capabilities to Bossini.

The Proposal offers Bossini an opportunity to reduce the costs and expenses associated with maintaining its listing status, while affording the Offeror and Bossini enhanced flexibility to pursue its long-term growth strategy

The Board considers that the administrative costs and management resources associated with maintaining Bossini's listing status are no longer justified. The Proposal will reduce such administrative costs and management resources invested by Bossini to maintain a listing platform that lacks financing capabilities, in which the management can focus on the business operations of the Bossini Group and improve the overall performance of the Group in the long run.

The Board (including the members of the independent non-executive Directors after considering the advice and recommendation of Rainbow Capital as set out in the "Letter from Rainbow Capital" in this circular) is of the view that the terms of the Proposal, the Scheme, the Option Offer and the transactions contemplated thereunder, including the allotment and issuance of the Shares under the Specific Mandate, are on normal commercial terms, fair and reasonable and in the interests of Company and the Shareholders as a whole.

None of the Directors has a material interest in the Proposal, the Scheme, the Option Offer and the transactions contemplated thereunder, including the allotment and issuance of the Shares under the Specific Mandate, and therefore none of the Directors has abstained from voting on the relevant resolution(s) of the Board.

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LETTER FROM THE BOARD

GENERAL INFORMATION ON THE PARTIES

The Offeror

As at the Latest Practicable Date, the Offeror holds 2,090,373,183 Bossini Shares, representing approximately 62.91% of the total issued Bossini Shares.

The Offeror intends to continue with the existing business of the Bossini Group. The Offeror does not intend to introduce any major changes to the existing operations or business of the Bossini Group (including any redeployment of fixed assets of the Bossini Group and disposal of material assets of the Bossini Group). It is also the intention of the Offeror that there will not be significant changes to the management and employees of the Bossini Group as a result of the Proposal.

The Group

The Company is a company incorporated in the Cayman Islands with limited liability whose Shares are listed on the Main Board of the Stock Exchange. The Group is a multi-brand operator principally engaged in design and development, branding and sales of sports and lifestyle apparel and footwear mainly in the United States of America, the United Kingdom, Europe, the PRC, Hong Kong, Japan and the Republic of Korea.

As at the Latest Practicable Date, the Company, through the Offeror, held 2,090,373,183 Bossini Shares, representing approximately 62.91% of the total issued Bossini Shares.

The Bossini Group

Bossini is a company incorporated in Bermuda with limited liability whose shares are listed on the Main Board of the Stock Exchange. The Bossini Group is principally engaged in the retailing and distribution of garments bearing the designated brand names including “bossini”, “bossini.X” and “bossini.X KIDS” mainly in the PRC, Hong Kong, Macau Special Administrative Region and Singapore.

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LETTER FROM THE BOARD

Set out below are the abridged audited annual financial statements of Bossini for the two financial years ended 31 December 2023 and the audited net assets value as at 31 December 2022 and 2023, and the unaudited interim financial statements of Bossini for the six months ended 30 June 2023 and 2024 and the unaudited net assets value as at 30 June 2023 and 2024, which were extracted from the audited consolidated annual and unaudited consolidated financial statements of Bossini, respectively:

| | (Unaudited)
For the six months ended
30 June | | (Audited)
For the year ended
31 December | |
| --- | --- | --- | --- | --- |
| | 2024 | 2023 | 2023 | 2022 |
| | HK$'000 | HK$'000 | HK$'000 | HK$'000 |
| Revenue | 265,070 | 298,437 | 604,223 | 585,155 |
| Loss before tax | (51,676) | (82,093) | (222,875) | (131,883) |
| Loss after tax | (51,983) | (82,366) | (223,368) | (132,254) |
| Loss attributable to the Bossini Shareholders | (51,983) | (82,366) | (223,368) | (132,254) |
| | As at 30 June | | As at 31 December | |
| | 2024 | 2023 | 2023 | 2022 |
| | HK$'000 | HK$'000 | HK$'000 | HK$'000 |
| Net assets attributable to the Bossini Shareholders | 157,203 | 349,167 | 206,642 | 120,303 |

LISTING RULES IMPLICATION

As all applicable percentage ratios (as defined under the Listing Rules) are below 5%, the Proposal constitutes a share transaction of the Company pursuant to the Listing Rules and is subject to the announcement requirement under Chapter 14 of the Listing Rules.

As each of the directors of the Bossini Group as set out in the table under the paragraph headed "Connected Transaction" above is a connected person of the Company at the subsidiary level, the issue of Shares under the Specific Mandate to such persons pursuant to the Proposal constitute connected transactions of the Company and are subject to reporting, announcement, circular and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

LETTER FROM THE BOARD

GENERAL

The Independent Board Committee, comprising all the independent non-executive directors of the Company, namely Mr. Li Qing, Mr. Pak Wai Keung, Martin, Mr. Wang Yan and Professor Cui Haitao, has been established by the Company to advise the Independent Shareholders as to whether the terms of the issue of new Shares under the Specific Mandate as consideration for the cancellation and extinguishment of the Scheme Shares under the Scheme and the cancellation of Bossini Share Options under the Option Offer are on normal commercial terms and fair and reasonable so far as the Independent Shareholders are concerned, as well as to advise the Independent Shareholders on how to vote. Rainbow Capital has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

The Company will convene the EGM at 2/F., PopOffice, 9 Tong Yin Street, Tseung Kwan O, New Territories, Hong Kong on Monday, 10 February 2025 at 4:00 p.m. for the Independent Shareholders to consider and, if thought fit, to approve the allotment and issuance of the Shares under the Specific Mandate.

As at the Latest Practicable Date, Mr. Zhao Jianguo, Mr. Cheung Chi, Ms. Yu Xin and Mr. Wong Siu Pan, who are Shareholders, held certain Bossini Shares and/or Bossini Share Options. In view of Mr. Zhao Jianguo, Mr. Cheung Chi, Ms. Yu Xin and Mr. Wong Siu Pan's interests in Bossini as mentioned above, they are considered to have material interests in the allotment and issue of Shares under the Specific Mandate and therefore Mr. Zhao Jianguo, Mr. Cheung Chi, Ms. Yu Xin, Mr. Wong Siu Pan and Double Essence Limited will abstain from voting at the EGM. Each of Mr. Zhao Jianguo, Mr. Cheung Chi, Ms. Yu Xin, Mr. Wong Siu Pan and Double Essence Limited controls or is entitled to exercise control over their respective voting rights of the Shares.

As at the Latest Practicable Date, based on the knowledge of the Directors after making reasonable enquires, save for Mr. Zhao Jianguo, Mr. Cheung Chi, Ms. Yu Xin, Mr. Wong Siu Pan and Double Essence Limited, (i) no other Shareholders or any of their respective associates has any material interest in the allotment and issue of Shares under Specific Mandate; and (ii) no other Shareholders would be required to abstain from voting on the resolution(s) to be proposed at the EGM.

EGM

The notice of the EGM is set out on pages 70 and 72 of this circular. The voting on resolution to be proposed at the EGM will be conducted by way of poll in accordance with Rule 13.39(4) of the Listing Rules.

The Company will publish an announcement on the results of the EGM with respect to whether or not the proposed resolution has been passed by the Independent Shareholders.

LETTER FROM THE BOARD

A form of proxy is enclosed with this circular. Whether or not you intend to attend and vote at the EGM, you are requested to complete and return the enclosed proxy form to the Company's Hong Kong branch share registrar, Tricor Investor Services Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong, in accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours before the time appointed for holding of the EGM or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish and in such event, the proxy form shall be deemed to be revoked.

RECOMMENDATION

Your attention is drawn to the letter of the Independent Board Committee set out on pages 28 to 29 of this circular, and the letter of advice from Rainbow Capital to the Independent Board Committee and the Independent Shareholders set out on pages 30 to 61 of this circular in respect of the issue of new Shares under the Specific Mandate as consideration for the cancellation and extinguishment of the Scheme Shares under the Scheme and the cancellation of Bossini Share Options under the Option Offer.

The Board (including the members of the Independent Board Committee, after considering the advice and recommendation of Rainbow Capital as set out in "Letter from Rainbow Capital" in this circular) considers that while the issue of new Shares under the Specific Mandate as consideration for the cancellation and extinguishment of the Scheme Shares under the Scheme and the cancellation of Bossini Share Options under the Option Offer may not be in the ordinary and usual course of business of the Group, it is on normal commercial terms and fair and reasonable so far as the Independent Shareholders are concerned. Accordingly, the Board (including the members of the Independent Board Committee) recommends the Independent Shareholders to vote in favour of the resolution approving the allotment and issuance of the Shares under the Specific Mandate at the EGM.

FURTHER INFORMATION

Your attention is also drawn to the information set out in the Appendix to this circular.

Yours faithfully,

On behalf of the Board of

Viva Goods Company Limited

LI Ning

Chairman and Chief Executive Officer

27 -

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

VIVA GOODS COMPANY LIMITED

非凡領越有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 933)

3 January 2025

To the Independent Shareholders

Dear Sir or Madam,

(2) SHARE TRANSACTION AND CONNECTED TRANSACTION

We refer to the circular of the Company dated 3 January 2025 (the "Circular"), of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as defined in the Circular unless the context otherwise requires.

We have been appointed by the Board as members of the Independent Board Committee to advise the Independent Shareholders as to whether the issue of new Shares under the Specific Mandate as consideration for the cancellation and extinguishment of the Scheme Shares under the Scheme and the cancellation of Bossini Share Options under the Option Offer are on normal commercial terms and fair and reasonable so far as the Independent Shareholders are concerned, as well as to advise the Independent Shareholders on how to vote, taking into account the recommendations of the Independent Financial Adviser. Rainbow Capital has been appointed by the Company as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

We wish to draw your attention to (i) the letter from the Board as set out on pages 8 to 27 of the Circular; (ii) the letter from Rainbow Capital as set out on pages 30 to 61 of the Circular which contains its recommendation to the Independent Board Committee and the Independent Shareholders in relation to the issue of new Shares under the Specific Mandate as consideration for the cancellation and extinguishment of the Scheme Shares under the Scheme and the cancellation of Bossini Share Options under the Option Offer as well as the principal factors and reasons considered by the Independent Financial Adviser in arriving at its recommendation; and (iii) the additional information as set out in the Appendix to the Circular.

28 -

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

After taking into account the factors and reasons considered by the Independent Financial Adviser and its conclusion and advice, we concur with its views and consider that while the issue of new Shares under the Specific Mandate as consideration for the cancellation and extinguishment of the Scheme Shares under the Scheme and the cancellation of Bossini Share Options under the Option Offer may not be in the ordinary and usual course of business of the Group, it is on normal commercial terms and fair and reasonable so far as the Independent Shareholders are concerned. Accordingly, we recommend the Independent Shareholders to vote in favor of the resolution to be proposed at the EGM to approve the allotment and issuance of the Shares under the Specific Mandate.

Yours faithfully,

For and on behalf of the

Independent Board Committee

Mr. LI Qing Mr. PAK Wai Keung, Martin Mr. WANG Yan Professor CUI Haitao

Independent non-executive Directors

29 -

LETTER FROM RAINBOW CAPITAL

The following is the full text of a letter of advice from Rainbow Capital (HK) Limited, the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the specific mandate for the allotment and issuance of the Shares under the Proposal, which has been prepared for the purpose of inclusion in the Circular.

Rainbow Capital (HK) Limited

3 January 2025

To the Independent Board Committee and the Independent Shareholders

Viva Goods Company Limited
2/F., PopOffice,
9 Tong Yin Street,
Tseung Kwan O, New Territories,
Hong Kong

Dear Sir or Madam,

(2) SHARE TRANSACTION AND CONNECTED TRANSACTION

INTRODUCTION

We refer to (i) our appointment as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the issue of new Shares under the Specific Mandate as consideration for the cancellation and extinguishment of the Scheme Shares under the Scheme and the cancellation of Bossini Share Options under the Option Offer; and (ii) the circular dated 3 January 2025 issued by the Company in relation to among other things, the details of the Proposal and the Specific Mandate (the "Circular"), of which this letter forms part. Unless the context otherwise requires, capitalised terms used in this letter shall have the same meaning as those defined in the Circular.

LETTER FROM RAINBOW CAPITAL

On 14 October 2024 (after trading hours), the Board and the Offeror Board requested the Bossini Board to put forward to the Scheme Shareholders the Proposal regarding the privatisation of Bossini by the Offeror by way of a scheme of arrangement under Section 99 of the Companies Act involving (i) the reduction of the issued share capital of Bossini by the cancellation of the Scheme Shares on the Scheme Effective Date, and in consideration therefor, 1 Share will be allotted and issued to the Scheme Shareholders for every 5 Scheme Shares so cancelled; (ii) forthwith upon the issued share capital reduction referred to in (i) above, the restoration of the issued share capital of Bossini to the amount immediately before the cancellation of the Scheme Shares by means of the issuance of new Bossini Shares in the same number as the Scheme Shares (which were cancelled) to the Offeror credited as fully paid out of the credit arising in Bossini's books of account as a result of the issued share capital reduction referred to in (i) above; and (iii) the withdrawal of the listing of the Bossini Shares on the Stock Exchange following the Scheme Effective Date pursuant to Rule 6.15 of the Listing Rules. Subject to the Scheme becoming effective, the entire issued share capital of Bossini will be owned by the Offeror upon the Scheme Effective Date.

As at the Latest Practicable Date, there were 168,118,814 outstanding Bossini Share Options. The Offeror will make the Option Offer to all the Bossini Optionholders in accordance with Rule 13 of the Takeovers Code. The Option Offer will be conditional upon the Scheme becoming effective. As the exercise prices for all outstanding Bossini Share Options are higher than the ascribed value of HK$0.108 per Bossini Share under the Scheme, the Bossini Share Options are "out of money". For every 1,000 Bossini Options cancelled, 1 new Share will be allotted and issued to the Bossini Optionholders.

The Shares to be issued pursuant to the Scheme as consideration for the cancellation and extinguishment of the Scheme Shares and to be issued pursuant to the Option Offer as consideration for the cancellation of the Bossini Share Options will be allotted and issued pursuant to the specific mandate to be sought from the Independent Shareholders at the EGM. The Shares to be issued under the Specific Mandate will be free from all Encumbrances, and together with all rights attaching to them, including the right to receive all dividends and other distributions, if the record time for determining the entitlement to such dividends and distributions falls on or after the date of issue of the new Shares, and will rank pari passu in all respects with all other Shares then in issue. The Specific Mandate, if approved, will be valid until the earlier of completion of the Proposal or lapse of the Scheme.

31 -

LETTER FROM RAINBOW CAPITAL

32 -

LETTER FROM RAINBOW CAPITAL

Name	Position	Number of Bossini Shares	Number of Bossini Share Options	Number of Shares entitled under the Scheme and the Option Offer (assuming no Bossini Share Options are exercised)	Number of Shares entitled under the Scheme and the Option Offer (assuming all Bossini Share Options are exercised)
Mr. Zhao Jianguo^{1}	Executive director and chairman of Bossini	–	39,067,057	39,067	7,813,411
Mr. Cheung Chi^{2}	Executive director and chief executive officer of Bossini	–	44,174,689	44,174	8,834,937
Ms. Yu Xin^{3}	Executive director of Bossini	1,156,000	9,808,942	241,008	2,192,988
Mr. Bosco Law^{4}	Non-executive director of Bossini	348,395,530	6,033,529	69,685,139	70,885,811
Mr. Lee Kwok Ming	Independent non-executive director of Bossini	–	1,609,041	1,609	321,808
Prof. Sin Yat Ming	Independent non-executive director of Bossini	–	804,670	804	160,934
Mr. Cheong Shin Keong	Independent non-executive director of Bossini	–	804,670	804	160,934
Mr. Wong Siu Pan^{5}	Director of certain Bossini’s subsidiaries	–	10,002,068	10,002	2,000,413
Mr. Chow Kai Ming	Director of certain Bossini’s subsidiaries	–	8,022,352	8,022	1,604,470
Ms. Chong Yin Ling Sharon	Director of certain Bossini’s subsidiaries	–	12,024,419	12,024	2,404,883

Notes:

Mr. Zhao Jianguo is an executive director of Bossini and the brother-in-law of Mr. Li Ning. As at the Latest Practicable Date, Mr. Zhao Jianguo held 39,067,057 Bossini Share Options and 289,666,667 Shares. Mr. Zhao Jianguo was also interested in 12,963,200 Shares held by Double Essence Limited which was owned as to 50% by Mr. Zhao Jianguo and 50% by Ms. Li Ying (the spouse of Mr. Zhao Jianguo) respectively.
Mr. Cheung Chi is an executive director of Bossini, the chief financial officer of the Company and a director of the Offeror. He is also a director of various subsidiaries of the Company. As at the Latest Practicable Date, Mr. Cheung Chi held 44,174,689 Bossini Share Options and 52,200,000 Shares.
Ms. Yu Xin is an executive director of Bossini and is a niece of the spouse of Mr. Li Ning. As at the Latest Practicable Date, Ms. Yu Xin held 1,156,000 Bossini Shares, 9,808,942 Bossini Share Options and 35,000,000 Shares.
Mr. Bosco Law is a non-executive director of Bossini and the sole shareholder of Keystar. As at the Latest Practicable Date, (a) Keystar owned 348,395,530 Bossini Shares; and (b) Mr. Bosco Law held 6,033,529 Bossini Share Options.
Mr. Wong Siu Pan is a director of certain Bossini’s subsidiaries. As at the Latest Practicable Date, Mr. Wong Siu Pan held 10,002,068 Bossini Share Options and 223,000 Shares.

– 33 –

LETTER FROM RAINBOW CAPITAL

The Independent Board Committee, comprising all the independent non-executive directors of the Company, namely Mr. Li Qing, Mr. Pak Wai Keung, Martin, Mr. Wang Yan and Professor Cui Haitao, has been established by the Company to advise the Independent Shareholders on the issue of new Shares under Specific Mandate as consideration for the cancellation and extinguishment of the Scheme Shares under the Scheme and the cancellation of Bossini Share Options under the Option Offer and as to voting. We, Rainbow Capital, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in the same regard.

We are not associated with the Offeror, the Company, Bossini, or their respective substantial shareholders or any party acting, or presumed to be acting, in concert with any of them. There has been no engagement between the Group and us in the last two years. Apart from normal professional fees paid or payable to us in connection with this engagement, no other arrangement exists whereby we will receive any fees or benefits from the Offeror, the Company, Bossini, or their respective substantial shareholders or any party acting, or presumed to be acting, in concert with any of them. Accordingly, we are considered eligible to give an independent advice to the Independent Board Committee and the Independent Shareholders in respect of the issue of new Shares under Specific Mandate as consideration for the cancellation and extinguishment of the Scheme Shares under the Scheme and the cancellation of Bossini Share Options under the Option Offer.

BASIS OF OUR OPINION

In formulating our opinion and advice, we have relied on (i) the information and facts contained or referred to in the Circular; (ii) the information supplied by the Directors and the management of the Group; and (iii) our review of the relevant public information. We have assumed that all the information provided and representations and opinions expressed to us or contained or referred to in the Circular were true and accurate in all material respects as at the date thereof and may be relied upon. We have also assumed that all statements contained and representations made or referred to in the Circular are true at the time they were made and continue to be true as at the Latest Practicable Date and all such statements of belief, opinions and intentions of the Directors and the management of the Group and those as set out or referred to in the Circular were reasonably made after due and careful enquiry. We have no reason to doubt the truth and accuracy of such information and representations provided to us by the Directors and the management of the Group. We have also sought and received confirmation from the Directors that no material facts have been withheld or omitted from the information provided and referred to in the Circular and that all information or representations provided to us by the

34 -

LETTER FROM RAINBOW CAPITAL

Directors and the management of the Group are true and accurate in all material respects and not misleading in any material respect at the time they were made and continue to be so until the Latest Practicable Date. The Shareholders will be informed of any material change of information in the Circular after the Latest Practicable Date and up to the date of the EGM.

We consider that we have reviewed sufficient information currently available to reach an informed view and to justify our reliance on the accuracy of the information contained in the Circular so as to provide a reasonable basis for our recommendation. We have not, however, carried out any independent verification of the information provided, representations made or opinion expressed by the Directors and the management of the Group, nor have we conducted any form of independent in-depth investigation into the business, affairs, operations, financial position or future prospects of the Offeror, the Group, the Bossini Group or any of their respective subsidiaries and associates.

PRINCIPAL TERMS OF THE PROPOSAL

For every 5 Scheme Shares cancelled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 new Share

As at the Latest Practicable Date, Bossini has not announced or declared any dividend, distribution or other return of capital which remains unpaid.

35 -

LETTER FROM RAINBOW CAPITAL

As at the Latest Practicable Date, there were 168,118,814 outstanding Bossini Share Options. Details of the outstanding Bossini Share Options and the relevant exercise prices are set out below:

	Outstanding Bossini Share Options	Exercise Price
January 2021 Bossini Options	29,746,802	HK$0.455
March 2022 Bossini Options	1,669,444	HK$0.659
November 2022 Bossini Options	1,002,068	HK$0.389
March 2024 Bossini Options	135,700,500	HK$0.128

Since the Announcement Date and up to the Latest Practicable Date, all of the outstanding November 2021 Bossini Options and 3,000,000 March 2024 Bossini Options had lapsed. The Offeror will make the Option Offer to all the Bossini Optionholders in accordance with Rule 13 of the Takeovers Code. The Option Offer will be conditional upon the Scheme becoming effective. As the exercise prices for all outstanding Bossini Share Options are higher than the ascribed value of HK$0.108 per Bossini Share under the Scheme, the Bossini Share Options are "out of money". As such, the Option Offer is made on the following terms:

For every 1,000 Bossini Options cancelled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . new Share

Following acceptance of the Option Offer, the relevant Bossini Share Options together with all rights attaching thereto will be entirely cancelled and renounced.

For further details of the terms of the Proposal, please refer to the Letter from the Board.

CONDITIONS TO THE PROPOSAL AND THE SCHEME

LETTER FROM RAINBOW CAPITAL

(d) the sanction of the Scheme (with or without modification) by the Court and the delivery to the Registrar of Companies of a copy of the order of the Court for registration;

(g) the granting by the Stock Exchange of the listing of, and permission to deal in, the Shares which fall to be issued pursuant to the Proposal, on the Main Board of the Stock Exchange;

37 -

LETTER FROM RAINBOW CAPITAL

The Scheme Conditions (a) to (k) above are not waivable.

LETTER FROM RAINBOW CAPITAL

As at the Latest Practicable Date, the Offeror and the Company are not aware of any circumstances which may result in Scheme Condition (k) not being satisfied.

The Option Offer is conditional upon the Scheme becoming effective.

As of the Latest Practicable Date, none of the Scheme Conditions had been fulfilled or waived (as applicable).

When the Scheme Conditions are satisfied or waived (as applicable), the Scheme will become effective and binding on Bossini and all the Scheme Shareholders.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion and recommendation with regard to the issue of new Shares under Specific Mandate as consideration for the cancellation and extinguishment of the Scheme Shares under the Scheme and the cancellation of Bossini Share Options under the Option Offer, we have taken into account the following principal factors and reasons:

1. Background and financial information of the Group and the Bossini Group

(i) The Group

The Company is a company incorporated in the Cayman Islands with limited liability whose Share are listed on the Main Board of the Stock Exchange. The Group is a multi-brand operator principally engaged in design and development, branding and sales of sports and lifestyle apparel and footwear mainly in the United States of America, the United Kingdom, Europe, the PRC, Hong Kong, Japan and the Republic of Korea.

LETTER FROM RAINBOW CAPITAL

Financial performance

Set out in the table below is a summary of the consolidated financial performance of the Group for the two years ended 31 December 2023 ("FY2022" and "FY2023", respectively), as extracted from the annual report of the Company for FY2023, and for the six months ended 30 June 2023 and 2024 ("6M2023" and "6M2024", respectively), as extracted from the interim report of the Company for 6M2024:

	6M2024	6M2023	FY2023	FY2022
	HK$'000	HK$'000	HK$'000	HK$'000
	(unaudited)	(unaudited)	(audited)	(audited)
Revenue	5,099,917	5,444,252	11,219,416	6,900,390
Gross profit	2,372,059	2,490,953	5,130,259	3,160,589
Profit/(loss) before income tax	13,993	72,912	(556,159)	871,151
Profit/(loss) for the period/year	48,839	85,834	(446,696)	873,011
Profit/(loss) attributable to the Shareholders	112,807	131,888	(118,990)	850,416

6M2024 as compared to 6M2023

The Group's revenue decreased by approximately $6.3\%$ from approximately HK$5,444.3 million for 6M2023 to approximately HK$5,099.9 million for 6M2024, which was mainly due to the decrease in revenue of multi-brand apparel and footwear segment, especially Clarks and Bossini businesses. The decrease in the revenue of Clarks business was attributable to weak consumer spending due to high inflation and interest rates and rising cost of living in European and Americas regions. The decrease in Bossini's revenue was due to products and channels repositioning, by closing numerous inefficient retail stores and offering higher discount to clear aged stocks in mainland China during the period.

The Group's gross profit decreased by approximately $4.8\%$ from approximately HK$2,491.0 million for 6M2023 to approximately HK$2,372.1 million for 6M2024, which was in line with the decrease in revenue. On the other hand, the gross profit margin of the Group slightly increased from $45.8\%$ for 6M2023 to $46.5\%$ for 6M2024, which was mainly due to increase in gross profit margin of Clarks business as it implemented effective control on product costs and logistic costs during the period.

LETTER FROM RAINBOW CAPITAL

For 6M2024, the Group recorded a net profit attributable to the Shareholders of approximately HK$112.8 million compared to that of approximately HK$131.9 million for 6M2023, representing a decrease of HK$19.1 million. The decrease was mainly attributed to (i) the decrease in revenue as discussed above; (ii) the decrease in share of profits less losses of associates and joint ventures by HK$129.0 million; and (iii) the impairment on property, plant and equipment and right-of-use assets of approximately HK$101.5 million. The decrease was partially offset by the decrease in operating expenses as a result of continued business restructuring and enhanced cost control measures.

FY2023 as compared to FY2022

The Group recorded revenue of approximately HK$11,219.4 million for FY2023, representing an increase of approximately 62.6% compared to approximately HK$6,900.4 million for FY2022. The increase in revenue was primarily due to the full-year impact of the consolidation of Clark Group's financial result as the acquisition of Clark Group was completed in July 2022.

Gross profit of the Group for FY2023 was approximately HK$5,130.3 million, representing an increase of approximately 62.3% as compared to that of approximately HK$3,160.6 million for FY2022, which was in line with the increase in revenue as contributed by the full-year impact of the consolidation of Clark Group.

The Group recorded a net loss attributable to the Shareholders of approximately HK$119.0 million for FY2023 as compared to a net profit attributable to the Shareholders of approximately HK$850.4 million for FY2022. The turnaround was mainly due to that (i) there was a gain on bargain purchase amounted to approximately HK$956.3 million due to the completion of acquisition of Clark Group in 2022, which was non-recurring; (ii) there was an one-off restructuring expense for Clark Group in 2023, which certain positions of the Clark Group were cut to streamline its business and improve its profitability; and (iii) higher impairment on right-of-use assets and property, plant and equipment and inventory provision in 2023, which was attributed to the worse-than expected performance of directly operated stores as a result of the challenging retail market since the second half of 2023, especially in the United Kingdom and the United States markets.

41 -

LETTER FROM RAINBOW CAPITAL

Financial position

| | As at 30 June 2024
HK$’000
(unaudited) | As at 31 December | |
| --- | --- | --- | --- |
| | | 2023
HK$’000
(audited) | 2022
HK$’000
(audited) |
| Non-current assets | 8,881,840 | 8,751,009 | 8,796,617 |
| Current assets | 5,869,794 | 5,966,648 | 8,675,314 |
| Current liabilities | 3,622,632 | 3,803,230 | 4,428,192 |
| Non-current liabilities | 2,250,174 | 1,857,997 | 2,045,511 |
| Net assets | 8,878,828 | 9,056,430 | 10,998,228 |
| Net assets attributable to the Shareholders | 7,649,095 | 7,719,127 | 7,993,175 |

As at 30 June 2024, the total assets of the Group amounted to approximately HK$14,751.6 million, which primarily consisted of property, plant and equipment of approximately HK$1,499.3 million, interests in associates and joint ventures of approximately HK$4,284.1 million, inventories of approximately HK$2,971.6 million and cash and cash equivalents of approximately HK$1,421.1 million.

As at 30 June 2024, the total liabilities of the Group amounted to approximately HK$5,872.8 million, primarily consisted of trade, bills and other payables of approximately HK$1,899.9 million, lease liabilities of approximately HK$1,871.7 million, and bank borrowings of approximately HK$917.1 million.

As at 30 June 2024, the Group had net assets attributable to the Shareholders of approximately HK$7,649.1 million and current ratio of approximately 1.62 times.

(ii) The Bossini Group

42 -

LETTER FROM RAINBOW CAPITAL

Financial performance

Set out in the table below is a summary of the consolidated financial performance of the Bossini Group for FY2022 and FY2023, as extracted from the annual report of Bossini for FY2023 (the “2023 Bossini Annual Report”), and for 6M2023 and 6M2024, as extracted from the interim report of Bossini for 6M2024 (the “2024 Bossini Interim Report”):

| | 6M2024
HK$’000
(unaudited) | 6M2023
HK$’000
(unaudited) | FY2023
HK$’000
(audited) | FY2022
HK$’000
(audited) |
| --- | --- | --- | --- | --- |
| Revenue | 265,070 | 298,437 | 604,223 | 585,155 |
| Gross profit | 129,752 | 157,071 | 304,914 | 273,224 |
| Loss before income tax | (51,676) | (82,093) | (222,875) | (131,883) |
| Loss for the period/year | (51,983) | (82,366) | (223,368) | (132,254) |
| Loss attributable to the Bossini Shareholders | (51,983) | (82,366) | (223,368) | (132,254) |

6M2024 as compared to 6M2023

The Bossini Group’s revenue decreased by approximately 11.2% from approximately HK$298.4 million for 6M2023 to approximately HK$265.1 million for 6M2024, which was mainly due to the challenging Hong Kong retail market in 2024.

Gross profit decreased by approximately 17.4% from approximately HK$157.1 million for 6M2023 to approximately HK$129.8 million for 6M2024. Gross profit margin decreased from approximately 52.6% for 6M2023 to approximately 49.0% for 6M2024.

The Bossini Group recorded a net loss attributable to the Bossini Shareholders of approximately HK$52.0 million, representing a decrease of approximately 36.9% from approximately HK$82.4 million for 6M2023. The decrease was mainly attributed to (i) effective cost control of expenses; and (ii) closure of loss-making stores in mainland China for 6M2024.

FY2023 as compared to FY2022

The Bossini Group recorded revenue of approximately HK$604.2 million for FY2023, representing an increase of approximately 3.3% compared to approximately HK$585.2 million for FY2022. The increase was mainly due to the gradual recovery of the post-epidemic market and the improvement of foot traffic of stores in 2023.

LETTER FROM RAINBOW CAPITAL

The Bossini Group's gross profit increased by approximately 11.6% from approximately HK$273.2 million for FY2022 to approximately HK$304.9 million for FY2023. The gross profit margin increased from approximately 46.7% for FY2022 to approximately 50.5% for FY2023.

The Bossini Group recorded a net loss attributable to the Bossini Shareholders of approximately HK$223.4 million for FY2023, representing an increase of approximately 68.9% from approximately HK$132.3 million for FY2022, which was mainly due to the non-recurring gain on disposal of assets held for sale of approximately HK$173.7 million in 2022.

Financial position

	As at 30 June 2024 HK$’000 (unaudited)	As at 31 December
		2023 HK$’000 (audited)	2022 HK$’000 (audited)
Non-current assets	103,449	108,441	155,571
Current assets	287,741	431,712	358,220
Current liabilities	171,270	257,902	247,992
Non-current liabilities	62,717	75,609	145,496
Net assets	157,203	206,642	120,303
Net assets attributable to the Bossini Shareholders	157,203	206,642	120,303

As at 30 June 2024, the total assets of the Bossini Group amounted to approximately HK$391.2 million, which primarily consisted of right-of-use assets of approximately HK$73.2 million, inventories of approximately HK$94.7 million, prepayments, deposits and other receivables of approximately HK$71.1 million, and cash and cash equivalents of approximately HK$108.9 million.

As at 30 June 2024, the total liabilities of the Bossini Group amounted to approximately HK$234.0 million, primarily consisted of trade creditors, other payables and accruals of approximately HK$91.7 million and lease liabilities of approximately HK$118.9 million.

As at 30 June 2024, the Group had net assets of approximately HK$157.2 million and current ratio of approximately 1.68 times.

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LETTER FROM RAINBOW CAPITAL

2. Information on the Offeror and the future intention of the Offeror

The Offeror is a company incorporated in the British Virgin Islands with limited liability and an indirect wholly-owned subsidiary of the Company. The Offeror is principally engaged in investment holdings. As at the Latest Practicable Date, the Offeror holds 2,090,373,183 Bossini Shares (representing approximately 62.91% of the total issued Bossini Shares).

The Offeror intends to continue with the existing business of the Bossini Group. The Offeror does not intend to introduce any major changes to the existing operations or business of the Bossini Group (including any redeployment of fixed assets of the Bossini Group). It is also the intention of the Offeror that there will not be significant changes to the management and employees of the Bossini Group as a result of the Proposal.

3. Reasons for and benefits of the Specific Mandate for the allotment and issuance of the Shares under the Proposal

As stated in the section headed “1. Background and financial information of the Group and the Bossini Group – (ii) The Bossini Group” above, the Bossini Group recorded net loss for each of FY2022, FY2023 and 6M2024. Bossini has faced a prolonged period of financial challenges with consistently recorded losses from its operations since 2018 that necessitated the need for external fundings. The Offeror considers that due to the low liquidity and the relative underperformance in the trading of the Bossini Shares, there will be difficulties to a certain extent for Bossini to raise funds from public equity markets, which the Offeror believes is unlikely to see any significant improvement in the near term.

Given the deteriorating financial performance, the share price of the Bossini Shares had been exhibiting a general downward trend in the past two years, which in turn reduced Bossini’s equity financing ability. As such, the Offeror believes that the administrative costs and management resources associated with maintaining Bossini’s listing status are no longer justified. The Proposal will reduce such administrative costs and management resources invested by Bossini to maintain a listing platform that lacks financing capabilities, in which the management can focus on the business operations of the Bossini Group.

LETTER FROM RAINBOW CAPITAL

Taking into account that (i) given the Bossini Group's deteriorating financial performance and lack of equity financing capabilities, it is more beneficial to the Company, the indirect controlling shareholder of Bossini, to privatise Bossini and unify a single listing platform in order to save administrative costs and management resources; (ii) the Proposal does not involve any cash outflow by the Company; (iii) it is currently more cost effective for the Group to implement the Proposal for the privatisation of Bossini as the share price of Bossini of HK$0.123 per Bossini Share on the Last Trading Day was almost at its lowest level which ranged from HK$0.065 per Bossini Share to HK$1.32 per Bossini Share in the last ten years; and (iv) the Proposal is put forward to all the Scheme Shareholders and the Bossini Optionholders, which include certain directors of Bossini Group and independent third parties, at the same share exchange ratio and same consideration ratio under the Option Offer based on their holding of Scheme Shares as at the Record Date and/or their holding of Bossini Options (as the case may be), we consider that the issue of new Shares under Specific Mandate as consideration for the cancellation and extinguishment of the Scheme Shares under the Scheme and the cancellation of Bossini Share Options under the Option Offer are on normal commercial terms and fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Independent Shareholders as a whole.

4. Scheme Consideration

Under the Proposal, 1 Share will be allotted and issued to the Scheme Shareholders for every 5 Scheme Shares cancelled. In order to assess the fairness and reasonableness of the Scheme Consideration, we have considered the following principal factors:

(i) Comparison of value

(a) a premium of approximately 0.93% over the closing price of HK$0.107 for every Bossini Share as quoted on the Stock Exchange on the Latest Practicable Date;

(b) a discount of approximately 12.20% to the closing price of HK$0.123 for every Bossini Share as quoted on the Stock Exchange on the Last Trading Day;

LETTER FROM RAINBOW CAPITAL

(e) a premium of approximately 12.50% over the average closing price of approximately HK$0.096 for every Bossini Share as quoted on the Stock Exchange for the 90 trading days up to and including the Last Trading Day; and
(f) a discount of approximately 0.92% to the average closing price of approximately HK$0.109 for every Bossini Share as quoted on the Stock Exchange for the 180 trading days up to and including the Last Trading Day.

Based on the share exchange ratio and the average share price per Share in various historical period, the premium/discount represented by the Scheme Consideration over/to the average share price per Bossini Share in various historical periods are as follows:

	Last Trading Day	Historical periods up to and including the Last Trading Day
		10 trading days	30 trading days	90 trading days	180 trading days
A Average price per Share (HK$)	0.540	0.556	0.534	0.605	0.668
B Average price per Bossini Share (HK$)	0.123	0.117	0.088	0.096	0.109
C Premium/(discount) = (1/5*A)/B-1	(12.20)%	(4.63)%	21.97%	26.49%	22.43%

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LETTER FROM RAINBOW CAPITAL

Based on the consolidated net asset value per Share of approximately HK$0.932 as at 31 December 2023 (based on the audited consolidated net asset value of the Company of approximately HK$9,056,430,000 as at 31 December 2023 and 9,722,276,727 Shares in issue as at the same date), the implied value of 1 Bossini Share (for each Scheme Share to be cancelled under the Scheme) is approximately HK$0.186, which represents a premium of approximately 200.0% over the consolidated net asset value per Bossini Share of approximately HK$0.062 as at 31 December 2023 (based on the audited consolidated net asset value of Bossini of approximately HK$206,642,000 as at 31 December 2023 and 3,322,720,177 Bossini Shares in issue as at the same date). We are of the view that the significant premium of the implied value of 1 Bossini Share over the consolidated net asset value per Bossini Share is mainly due to the following (i) Bossini had a higher price-to-book ratio than the Company on the Last Trading Day and in the various periods prior to the Last Trading Day; (ii) the share exchange ratio (i.e. 1 Share for every 5 Scheme Shares) has been determined on a commercial basis after taking into account, among other things, the prevailing and historical market price levels and volatility of both the Shares and the Bossini Shares traded on the Stock Exchange; and (iii) the premium represented by the ascribed value of the Scheme Consideration per Bossini Share over the average historical closing price per Bossini Share, is necessary to provide incentives for the Scheme Shareholders to support the Proposal as the Scheme Shareholders are mainly concerned on the realisable value of the Scheme Shares by comparing the Scheme Consideration with the price of the Bossini Shares if they were to dispose their investment on the market, and is in line with other privatisation transactions in Hong Kong. As such, although the implied value of 1 Bossini Share represented significant premium over the consolidated net asset value per Bossini Share, we consider that it is not a determining factor on the fair and reasonableness of the Scheme Consideration.

We further consider that the premiums represented by the implied value of the Scheme Consideration over the average closing prices of the Bossini Shares for the 30 trading days and the 90 trading days up to and including the Last Trading Day are fair and reasonable, as discussed in more detail in the section headed “(v) Privatisation precedents” below, and necessary to provide sufficient incentive to attract the acceptance of the Proposal by the Scheme Shareholders.

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LETTER FROM RAINBOW CAPITAL

(ii) Historical price performance of the Shares and the Bossini Shares

Set out below is the chart showing the relative movement of the daily closing prices of the Shares and the Bossini Shares as quoted on the Stock Exchange during the period from 1 November 2022 up to the Last Trading Day (the “Review Period”), being a period of approximately two years, and up to the Latest Practicable Date. We consider such Review Period to be fair, reasonable and representative as we consider it a sufficient period to illustrate the recent trend and level of movement of the daily closing prices of the Shares and the Bossini Shares for the purpose of this analysis, which reflects the prevailing market sentiment for conducting a comparison between the closing prices of the Shares and the Bossini Shares.

Relative change from the closing prices of the Shares and the Bossini Shares during the Review Period

Source: the website of the Stock Exchange

As showed in the chart above, the closing prices of the Shares and the Bossini Shares exhibited a general downward trend during the Review Period. The Bossini Share price decreased by approximately 88.9% from HK$0.587 on 3 February 2023 to HK$0.065 on 16 September 2024, the lowest closing price of the Bossini Shares during the Review Period. At the same time, the Shares also demonstrated a downward trend during the Review Period at a lesser extent, as the Share price decreased from the highest of HK$1.71 on 3 March 2023 to the lowest of HK$0.49 on 11 September 2024, representing a decrease of approximately 71.3%.

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LETTER FROM RAINBOW CAPITAL

Before the date of the Announcement, the Bossini Share price increased by approximately 110.8% from HK$0.065 on 16 September 2024 to HK$0.137 on 2 October 2024. Based on our review of the public information disclosed by Bossini on the website of the Stock Exchange, including the 2024 Bossini Interim Report, we consider that there have been no material changes in the financial performance or outlook of the Bossini Group that could lead to a surge in the share price of Bossini Shares during the relevant period. Following the surge in share price, the price of the Bossini Shares resumed a downward trend and traded generally below the equivalent Scheme Consideration of approximately HK$0.108. As at the Latest Practicable Date, the Shares and the Bossini Shares closed at HK$0.610 and HK$0.107, respectively. Taking into account that Bossini has been loss making since 2018 and there is no sign of improvement in its outlook, we consider the recent surge in the Bossini Share Price prior to the Last Trading Day may not be sustainable. Although the Scheme Consideration represented discounts to the closing price of the Bossini Shares on the Last Trading Day and for the last 10 trading days up to and including the Last Trading Day, we consider it is fair and reasonable to focus on the long-term underperformance in the trading prices of the Bossini Shares during the Review Period.

Taking into account the consistent downward trend in the share price of the Shares and the Bossini Shares during the Review Period and the need to provide Bossini Shareholders with an appropriate premium for a successful privatisation, we consider that the premiums, represented by the implied value of the Scheme Consideration over the average closing prices of the Bossini Shares for the 30 trading days, the 90 trading days and the 180 trading days, respectively, up to and including the Last Trading Day, are fair and reasonable.

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LETTER FROM RAINBOW CAPITAL

(iii) Historical trading liquidity of the Bossini Shares

The following table sets out the average daily trading volume of the Bossini Shares for each month or period and the percentages of such average daily trading volume to the total number of the Bossini Shares in issue and held by the public during the Review Period:

	Number of trading days	Approximate average daily trading volume of the Bossini Shares	Approximate percentage of average daily trading volume to the total number of the Bossini Shares in issue (Note 1)	Approximate percentage of average daily trading volume to the total number of the Bossini Shares held by the public (Note 2)
2022
November	22	935,244	0.0379%	0.1286%
December	20	3,748,508	0.1517%	0.5155%
2023
January	18	1,253,104	0.0507%	0.1723%
February	20	2,284,641	0.0925%	0.3142%
March	23	1,795,815	0.0727%	0.2469%
April	17	2,295,085	0.0929%	0.3156%
May	21	1,629,762	0.0490%	0.1846%
June	21	1,352,381	0.0407%	0.1532%
July	20	1,376,101	0.0414%	0.1559%
August	23	671,201	0.0202%	0.0760%
September	19	430,632	0.0130%	0.0488%
October	20	301,475	0.0091%	0.0342%
November	22	455,682	0.0137%	0.0516%
December	19	498,000	0.0150%	0.0564%
2024
January	22	470,670	0.0142%	0.0533%
February	19	415,849	0.0125%	0.0471%
March	20	1,173,963	0.0353%	0.1330%
April	20	648,088	0.0195%	0.0734%
May	21	2,432,881	0.0732%	0.2756%
June	19	624,895	0.0188%	0.0708%
July	22	1,023,818	0.0308%	0.1160%
August	22	852,932	0.0257%	0.0966%
September	19	1,297,818	0.0391%	0.1470%
From 2 October to the Last Trading Day	8	4,886,953	0.1471%	0.5536%

Source: the website of the Stock Exchange and Bloomberg

LETTER FROM RAINBOW CAPITAL

Notes:

Based on the total number of the Bossini Shares in issue.
Based on the number of the Bossini Shares held by the public Bossini Shareholders.

As illustrated in the above table, the trading of the Bossini Shares was generally inactive during the Review Period. The monthly average daily trading volume of the Bossini Shares for the respective month or period during the Review Period ranged from approximately 301,475 Bossini Shares in October 2023 to approximately 4,886,953 Bossini Shares during the period from 2 October 2024 to the Last Trading Date, representing approximately 0.0091% to 0.1471% of the total issued Bossini Shares and approximately 0.0342% to 0.5536% of the issued Bossini Shares held by the public.

In April 2023, Bossini conducted a rights issue (the “Rights Issue”) on the basis of one (1) rights share for every two (2) Bossini Shares then existing. 363,612,219 rights shares were offered to the public Bossini Shareholders who then held 727,224,439 Bossini Shares, while only 155,301,025 rights shares, representing 42.71% of the total number of right shares offered to the public Bossini Shareholders, were ultimately subscribed by the then public Bossini Shareholders. Although the subscription price for the Rights Issue represented a discount of approximately 21.28% to the then closing price of the Bossini Shares on 24 February 2023, the public Bossini Shareholders’ subscription of the Rights Issue was limited. As disclosed in the prospectus of Bossini in respect of the Rights Issue, the Bossini Directors had considered other debt/equity fund raising alternatives such as bank borrowings, placing or open offer. The Bossini Directors noted that bank borrowings will carry interest costs and may require the provision of security and creditors will rank before the Bossini Shareholders, and placings will dilute the interests of Bossini Shareholders without giving them the opportunity to take part in the exercise.

Taking into account (i) the historical thin liquidity and general downward trend in the share price of the Bossini Shares during the Review Period; (ii) the public Bossini Shareholders’ relatively unfavourable response towards Bossini’s past equity financing activity; and (iii) that it may also be difficult to find investors for potential placing of Bossini Shares in view of Bossini’s financial which has been loss making since 2018, we are of the view that the equity fund raising abilities of Bossini is limited.

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LETTER FROM RAINBOW CAPITAL

(iv) Comparable companies

The Bossini Group is principally engaged in the retailing and distribution of garments bearing the designated brand names including “bossini”, “bossini.X” and “bossini.X KIDS” mainly in the PRC, Hong Kong, Macau Special Administrative Region and Singapore. Revenue generated from Hong Kong and Macau accounted for approximately 64.9% and 70.9% for FY2023 and 6M2024, respectively.

Price-to-earnings (“P/E(s)”), price-to-book (“P/B(s)”) and price-to-sale (“P/S(s)”) multiples are the three most commonly used benchmarks in valuing a company. Given that (a) the Bossini Group was loss making for FY2023 and 6M2024; (b) the Bossini Group recorded net assets position as at 30 June 2024; and (c) the Bossini Group recorded relatively stable revenue for the two years ended 31 December 2023, we consider the valuation methodologies using P/S and P/B are more appropriate in valuing the Bossini Group.

Based on (a) the implied value of approximately HK$0.108 per Bossini Share on the Last Trading Day; (b) 3,322,720,177 Bossini Shares in issue as at the Latest Practicable Date; (c) revenue of approximately HK$604.2 million for FY2023; and (d) equity attributable to the Shareholders of approximately HK$206.6 million as at 31 December 2023, the P/S and P/B implied by the Scheme Consideration are approximately 0.59 time and 1.74 times, respectively (the “Implied P/S” and the “Implied P/B”, respectively).

In assessing the fairness and reasonableness of the Scheme Consideration, we have, based on our search on Bloomberg and the website of the Stock Exchange, identified an exhaustive list of companies (the “Comparable Companies”) which (a) are principally engaged in and generated over 50% of their revenue from retailing and distribution of garments in Hong Kong and/or Macau; (b) have their shares listed and traded on the Main Board of the Stock Exchange; and (c) had market capitalisation between HK$100 million and HK$500 million on the Last Trading Day. Taking into account (a) Bossini’s market capitalisation of approximately HK$408.7 million on the Last Trading Day; and (b) the implied market capitalisation of approximately HK$358.9 million based on the ascribed value of HK$0.108 per Bossini Share under the Scheme, we consider such market capitalisation range is reasonable and could provide sufficient sample size for comparison purpose.

Based on the aforesaid criteria, we have identified four Comparable Companies, which represents an exhaustive list. We consider the Comparable Companies are fair and representative for comparison purpose given that they and the Bossini Group are engaged in the same sector, have a majority of their revenue derived from Hong Kong and/or Macau, and have a market capitalisation which are comparable to that of Bossini.

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LETTER FROM RAINBOW CAPITAL

The following table sets out the details of the Comparable Companies:

Company name (stock code)	Principal business	Market capitalisation on the Last Trading Day (HK$ million)	P/S (times)	P/B (times)
ENM Holdings Limited (Stock code: 128)	Retail of fashion wear and accessories, resort and recreational club operations and investment.	478.7	3.96	0.45
YGM Trading Limited (Stock code: 375)	Garment wholesaling and retailing, trademark ownership and licensing, property investment and provision of security printing, general business printing and trading of printing products.	182.5	0.77	0.40
Forward Fashion (International) Holdings Company Limited (Stock code: 2528)	Retail and wholesale of luxury and fashion clothes and products.	106.0	0.11	0.46
Bauhaus International (Holdings) Limited (Stock code: 483)	Design and retail of trendy apparel, bags and fashion accessories.	102.9	0.53	0.63
		Maximum	3.96	0.63
		Minimum	0.11	0.40
		Average	1.34	0.49
		Median	0.65	0.46
	Bossini	408.7	0.59 (Note 1)	1.74 (Note 2)

Source: the website of the Stock Exchange and Bloomberg

Notes:

Being the Implied P/S; and
Being the Implied P/B.

LETTER FROM RAINBOW CAPITAL

As shown in the table above, the P/Ss of the Comparable Companies ranged from approximately 0.11 time to approximately 3.96 times on the Last Trading Day. The Implied P/S of approximately 0.59 time is within the range of the P/Ss of the Comparable Companies and is slightly lower than the median of those of the Comparable Companies.

The P/Bs of the Comparable Companies ranged from approximately 0.40 time to approximately 0.63 time on the Last Trading Day. The Implied P/B of approximately 1.74 times is higher than the P/Bs of the Comparable Companies. Bossini Share had a P/B of approximately 1.98 times on the Last Trading Day, which was higher than those all of the Comparable Companies. We have reviewed the financial reports of the Comparable Companies and noted that save for Bauhaus International (Holdings) Limited, the Comparable Companies generally own significant property, plant and equipment and/or investment properties. Bossini is relatively assets-light as compared to the Comparable Companies. As such, we consider the comparison of P/B may not be representative.

Taking into account that (a) the Implied P/S is within the range of those of the Comparable Companies and is slightly lower than the median P/S of the Comparable Companies; (b) it is common for listed issuers to offer premium to scheme shareholders in privatisation transactions to facilitate the success of the implementation of the proposals to privatise the target companies; and (c) the general downward trend of the price of the Shares and the Bossini Shares, we consider the Scheme Consideration to be fair and reasonable as far as the Independent Shareholders are concerned.

(v) Privatisation precedents

In order to further assess the fairness and reasonableness of the Scheme Consideration, we have reviewed successful privatisation precedents of companies listed on the Main Board of the Stock Exchange conducted by issue of shares, either by way of absorption, scheme of arrangement or share exchange, for the past ten years prior to the Last Trading Day. Due to the differences in structure and the need for the Shareholders to consider the prospect of the offeror company, we did not consider the privatisation precedents which involved cash consideration. Based on the aforesaid criteria, we have identified, on a best effort basis, an exhaustive list of five privatisation precedents (the "Privatisation Precedents"). Taking into account the limited number of comparable privatisation precedents involving share offer in the recent years, we have adopted a longer time span of ten years in our research for the Privatisation Precedents in order to obtain sufficient samples for our analysis. We consider that a review period of ten years is adequate and appropriate to provide a sufficient and reasonable sample for comparison with the Proposal.

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LETTER FROM RAINBOW CAPITAL

Although the issuers involved in the Privatisation Precedents have different principal activities and market capitalisations as compared to those of Bossini, taking into account that (a) the Privatisation Precedents would provide us with the relevant information to demonstrate the implied value of successful privatisation of the Main Board listed companies in Hong Kong; and (b) the review period is adequate and appropriate as discussed above, we consider the Privatisation Precedents to be fair and representative samples which can serve as a useful reference to the implied value of privatisation proposals in the Hong Kong capital market, so as to determine whether the Scheme Consideration is in line with market practices. We consider that the Privatisation Precedents are fair, representative and exhaustive samples for our assessment of the Scheme Consideration for illustrative purpose.

The table below sets out the details of the Privatisation Precedents:

Date of announcement	Offeror	Offerre	Share exchange ratio (Note 1)	Premium/(discount) based on the average closing price of the offeror's and the offerre's shares during the historical periods up to and including the respective last trading day (Note 2)
				Last trading day	Last 10 trading days	Last 30 trading days	Last 90 trading days	Last 180 trading days
29 September 2020	Shandong Gold Mining Co., Ltd. (Stock code: 1787)	Hengying Gold Holding Company Limited (Stock code: 2303)	5/29	(2.43)%	9.99%	10.33%	16.23%	15.59%
6 July 2020	Huarong International Financial Holdings Ltd (Stock code: 993)	Huarong Investment Stock Corporation Limited (Stock code: 2277)	2.82	35.54%	53.62%	56.15%	62.44%	108.07%
8 September 2017	China National Building Material Company Limited (Stock code: 3323.HK)	China National Materials Company Limited (Stock code: 1893)	0.85	19.19%	21.92%	27.58%	42.60%	58.98%
9 January 2015	CheungKong (Holdings) Limited (Stock code: 0001)	Hutchison Whampoa Limited (Stock code: 0013)	0.684	(2.33)%	(0.70)%	(0.11)%	(3.80)%	(6.57)%
30 December 2014	CSR Corporation Limited (Stock code: 1766)	China CNR Corporation Limited (Stock code: 6199)	1.10	13.30%	12.56%	12.55%	16.59%	N/A (Note 3)
			Maximum	35.54%	53.62%	56.15%	62.44%	108.07%
			Minimum	(2.43)%	(0.70)%	(0.11)%	(3.80)%	(6.57)%
			Average	12.66%	19.48%	21.30%	26.81%	44.02%
			Median	13.30%	12.56%	12.55%	16.59%	37.28%
16 October 2024	Viva Goods Company Limited (Stock Code: 933)	Bossini International Holdings Limited (Stock Code: 592)	0.20	(12.20)%	(4.63)%	21.97%	26.49%	22.43%
						(the "30 Days Premium")	(the "90 Days Premium")	(the "180 Days Premium")

Source: the website of the Stock Exchange and Bloomberg

Notes:

Share exchange ratio is the number of the offeror's shares that one share of the offeree is worth of.
For the purpose of consistency, premium/(discount) is calculated based on the average closing prices of offerors' shares (up to and including the last trading day) and the share exchange ratio.
The average share price of China CNR Corporation Limited for the last 180 trading days prior to the last trading day was not available as China CNR Corporation Limited was listed on 22 May 2014.

LETTER FROM RAINBOW CAPITAL

As illustrated in the above table, the implied discounts of the Scheme Consideration for each Bossini Share based on the average closing prices of the Shares and Bossini Shares on the Last Trading Day and for the last 10 trading days up to and including the Last Trading Day are 12.20% and 4.63%, respectively, which are lower than all of those of the Privatisation Precedents. However, such lower discounts are mainly due to the surge in share price of Bossini during the period from 16 September 2024 to 2 October 2024, which we consider to be not sustainable given that Bossini has been loss making since 2018 and there is no sign of improvement in its outlook. Following the date of the Announcement, the price of the Bossini Share closed at HK$0.107 as at the Latest Practicable Date, over which the Scheme Consideration represented a premium of approximately 14.02% based on the closing Share price of HK$0.610 per Share and the share exchange ratio. Hence, we consider the comparison of the value of the Scheme Consideration with the closing price of Bossini Shares on the Last Trading Day and the average of the last 10 trading days may not be representative.

The implied premiums of the Scheme Consideration for each Bossini Share based on the average closing prices of the Shares and Bossini Shares for the last 30, 90 and 180 trading days up to and including the Last Trading Day are 21.97%, 26.49% and 22.43%, respectively, which are within the ranges of those of the Privatisation Precedents. The 30 Days Premium is generally in line with the average of those of the Privatisation Precedents. The 90 Days Premium is generally in line with the average and the median of those of the Privatisation Precedents. The 180 Days Premium is lower than the average and the median of those of the Privatisation Precedents but is generally in line with the 30 Days Premium and the 90 Days Premium. In this regard, we noted that the 180 days comparison of the Privatisation Precedents had a large range from a discount of 6.57% to a premium of 108.07%. Given the longer time frame and the significant variance among the Privatisation Precedents, we consider the 180 days comparison may not give a very meaningful analysis for comparison purpose.

Taking into account that the 30 Days Premium and the 90 Days Premium are within the range of those of the Privatisation Precedents and are generally in line with the average and the median of those of the Privatisation Precedents, we consider the Scheme Consideration to be fair and reasonable as far as the Independent Shareholders are concerned.

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LETTER FROM RAINBOW CAPITAL

5. Consideration for the Option Offer

As at the Latest Practicable Date, there were 168,118,814 outstanding Bossini Share Options. Details of the outstanding Bossini Share Options and the relevant exercise prices are set out below:

	Outstanding Bossini Share Options	Exercise Price
January 2021 Bossini Options	29,746,802	HK$0.455
March 2022 Bossini Options	1,669,444	HK$0.659
November 2022 Bossini Options	1,002,068	HK$0.389
March 2024 Bossini Options	135,700,500	HK$0.128

As the exercise prices for all outstanding Bossini Share Options are higher than the ascribed value of HK$0.108 per Bossini Share under the Scheme, the Bossini Share Options are “out of money”.

Assuming no outstanding Bossini Share Options are exercised, 168,118 new Shares will be allotted and issued to the Bossini Optionholders to cancel the outstanding 168,118,814 Bossini Share Options under the Option Offer. Based on the ascribed value of HK$0.108 per Bossini Share under the Scheme, the implied consideration for the Option Offer is HK$18,156.744.

Pursuant to Rule 13 of the Takeovers Code and Practice Note 6 published by the SFC, the price for the Option Offer would normally represent the "see-through" price, being the difference between the share offer price and the exercise price for each outstanding Bossini Share Option. Given that the exercise prices of the outstanding Bossini Share Options are higher than the ascribed value of HK$0.108 per Bossini Share under the Scheme, the outstanding Bossini Share Options are therefore out-of-money with nil "see-through" value. Accordingly, the cancellation price for the Option Offer for outstanding Bossini Share Options is at a nominal value of 1 new Share for every 1,000 Bossini Options cancelled.

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LETTER FROM RAINBOW CAPITAL

To further assess the fair and reasonableness of the Option Offer, we have searched the website of the Stock Exchange for comparable option offers made pursuant to Rule 13 of the Takeovers Code for the offeree company's outstanding share options which were "out of money". The table below sets out an exhaustive list of the comparable option offers announced during the period from 1 January 2023 to the Last Trading Day, which we consider to be adequate and appropriate to provide a sufficient and reasonable sample comparison:

Date of announcement	Offeror	Offeree	Cancellation price of each share option
6 August 2024	Brilliant Sunshine International Limited	Hang Pin Living Technology Company Limited (Stock code: 1682)	HK$0.01
3 July 2024	An Ke Technology Company Limited
China Ping An Insurance Overseas (Holdings) Limited	Lufax Holding Ltd (Stock code: 6623)	HK$0.00001
26 April 2024	Luxurious Bay Capital Limited	i-Control Holdings Limited (Stock code: 1402)	HK$0.0001
8 November 2023	AXIOMA CAPITAL FZE LLC	IRC Limited (Stock code: 1029)	HK$0.0001
3 August 2023	Mr. Xu Ai Hua	Hang Yick Holdings Company Limited (Stock code: 1894)	HK$0.001
28 July 2023	Luk Fook 3D Investment Holding Company Limited	Hong Kong Resources Holdings Company Limited (Stock code: 2882)	HK$0.00001
11 May 2023	Tangshan Guokong Science and Technology Innovation Investment Group Co., Limited	China Titans Energy Technology Group Co., Limited (Stock code: 2188)	HK$0.0001
12 January 2023	Geely Group Limited	Honbridge Holdings Limited (Stock code: 8137)	HK$0.001

LETTER FROM RAINBOW CAPITAL

As noted from the comparable option offers above, all of the cancellation price of each share option under the comparable option offers were of minimal value ranging from HK$0.01 to HK$0.00001. As such, the Option Offer is generally in line with the market practice of those “out of money” option offers. Given that (i) the “see-through” value of the outstanding Bossini Share Options is nil; and (ii) the cancellation price is at a nominal value equivalent to HK$0.000108 per Bossini Share Option based on the ascribed value of HK$0.108 per Bossini Share under the Scheme which is in line with the market practice of the “out of money” option offers, we consider the cancellation price for the Option Offer offered to the Bossini Optionholders is fair and reasonable so far as the Independent Shareholders are concerned.

RECOMMENDATION AND OPINION

In arriving at our recommendation in respect of the issue of new Shares under Specific Mandate as consideration for the cancellation and extinguishment of the Scheme Shares under the Scheme and the cancellation of Bossini Share Options under the Option Offer, we have considered the principal factors and reasons as discussed above and in particular the following (which should be read in conjunction with and interpreted in the full context of this letter):

the Bossini Group’s deteriorating financial performance and lack of equity financing capabilities;
the Proposal does not involve any cash outflow by the Group;
the Company and Bossini could reduce administrative costs and management resources by unifying a single listing platform;
it is currently more cost effective for the Group to implement the Proposal for the privatisation of Bossini as the share price of Bossini of HK$0.123 per Bossini Share on the Last Trading Day was almost at its lowest level which ranged from HK$0.065 per Bossini Share to HK$1.32 per Bossini Share in the last ten years;
the Proposal is put forward to all the Scheme Shareholders and the Bossini Optionholders, which include the directors of Bossini Group and independent third parties. The connected persons of the Company would attain the new Shares at the same share exchange ratio as the other Scheme Shareholders or the same consideration ratio under the Option Offer as the other Bossini Optionholders based on their respective holding of Scheme Shares as at the Record Date and/or their holding of the Bossini Options (as the case may be);
60 -

LETTER FROM RAINBOW CAPITAL

the Scheme Consideration is fair and reasonable, taking into account that:

(i) the historical thin liquidity and general downward trend in the share price of the Bossini Shares during the Review Period;

(ii) the Implied P/S is within the range of those of the Comparable Companies and is slightly lower than the median P/S of the Comparable Companies;

(iii) the 30 Days Premium and the 90 Days Premium are within the range of those of the Privatisation Precedents and are generally in line with the average and the median of those of the Privatisation Precedents;

(iv) the Independent Bossini Shareholders should be given an appropriate premium to provide incentives for them to support the Proposal; and

as the Bossini Share Options are out-of-money, the cancellation price for the Option Offer at a nominal value is considered to be fair and reasonable so far as the Independent Shareholders are concerned.

Based on the above, we consider that while the issue of new Shares under Specific Mandate as consideration for the cancellation and extinguishment of the Scheme Shares under the Scheme and the cancellation of Bossini Share Options under the Option Offer (including the Scheme Consideration and the consideration for the Option Offer) may not be in the ordinary and usual course of business of the Group, it is on normal commercial terms and fair and reasonable so far as the Independent Shareholders are concerned. Accordingly, we advise the Independent Board Committee to recommend, and we ourselves recommend, the Independent Shareholders to vote in favour of the relevant resolution(s) to be proposed at the EGM to approve the issue of new Shares under Specific Mandate as consideration for the cancellation and extinguishment of the Scheme Shares under the Scheme and the cancellation of Bossini Share Options under the Option Offer.

Yours faithfully,

For and on behalf of

Rainbow Capital (HK) Limited

Danny Leung

Managing Director

Mr. Danny Leung is a licensed person and a responsible officer of Rainbow Capital (HK) Limited registered with the Securities and Futures Commission to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO. He has over ten years of experience in the corporate finance industry.

APPENDIX

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

(a) Interests and short positions of Directors and the chief executive in the shares and underlying shares and debentures of the Company and its associated corporations

As at the Latest Practicable Date, save as disclosed below, none of the Directors or the chief executive of the Company or their associates had or was deemed to have any interests and short positions in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which the Directors or the chief executives of the Company or their associates were deemed or taken to have under provisions of the SFO), or which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange.

Long positions in the Shares, underlying Shares and debenture of the Company

Directors	Capacity	Number of Shares/ underlying Shares held		Number of share options held	Total interests	Approximate percentage of shareholdings
		Natural interest	Corporate interest

(a) The Company

Long positions in the Shares, underlying Shares and debentures of the Company

Mr. LI Ning	Beneficial owner	879,508,000	-	14,000,000
	Interest of controlled corporation	-	5,812,443,151	-	6,705,951,151 (1)	68.96%
Mr. LI Chunyang	Beneficial owner	15,451,669	-	56,000,000	71,451,669	0.73%
Mr. LI Qilin	Beneficiary of trusts	3,680,022,769 (2)	-	-
	Beneficial owner	-	-	27,000,000	3,707,022,769	38.12%
Mr. Victor HERRERO	Beneficial owner	29,168,000	-	34,000,000	63,168,000	0.65%
Mr. MA Wing Man	Beneficial owner	2,000,000	-	7,600,000	9,600,000	0.10%
Mr. LI Qing	Beneficial owner	-	-	3,600,000	3,600,000	0.04%

APPENDIX

GENERAL INFORMATION

Directors	Capacity	Number of Shares/underlying Shares held		Number of share options held	Total interests	Approximate percentage of shareholdings
		Personal interest	Corporate interest
Ms. LYU Hong	Beneficial owner	-	-	3,600,000	3,600,000	0.04%
Mr. PAK Wai Keung, Martin	Beneficial owner	-	-	3,600,000	3,600,000	0.04%
Mr. WANG Yan	Beneficial owner	-	-	3,600,000	3,600,000	0.04%
Professor CUI Haitao	Beneficial owner	4,984,000	-	1,800,000	6,784,000	0.07%

(b) Associated Corporation - Bossini

Long positions in the Bossini Shares

Mr. Li Ning Interest of controlled corporation

2,090,373,183 (3)
2,090,373,183

62.91%

Notes:

Mr. Li Ning is interested in 6,705,951,151 Shares, including (i) personal interests in 21,508,000 Shares, 14,000,000 share options which are exercisable into 14,000,000 Shares and the convertible bonds in the principal amount of HK$278,850,000 which are convertible into 858,000,000 Shares at the conversion price of HK$0.325 per Share, and has no maturity date; and (ii) deemed interests in the long positions of 5,812,443,151 Shares in aggregate through his interests in Lead Ahead, Victory Mind Assets and Dragon City, respectively as follows:

(a) the long position of 2,132,420,382 Shares is held by Lead Ahead, which is owned as to 60% by Mr. Li Ning and 40% by Mr. Li Chun. Mr. Li Ning is also a director of Lead Ahead;

(b) the long position of 1,680,022,769 Shares is held by Victory Mind Assets which is owned as to 57% by Ace Leader and 38% by Jumbo Top. All shares of Ace Leader are held by TMF in its capacity as trustee of a discretionary trust. Mr. Li Ning is the settlor of the trust and is therefore deemed to be interested in such 1,680,022,769 Shares. Mr. Li Ning is a director of each of Victory Mind Assets and Ace Leader; and

(c) the long position of 2,000,000,000 Shares is held by Dragon City in its capacity as trustee of a unit trust, the units of which are owned as to 60% by TMF and as to 40% by TMF, each as the trustee of separate discretionary trust. Mr. Li Ning is the 60% shareholder of Dragon City and a founder of the unit trust and is therefore deemed to be interested in such 2,000,000,000 Shares. Mr. Li Ning is a director of Dragon City.

Please refer to note 1(b) and note 1(c) under the section headed "Interests and short positions of substantial shareholders and other persons in the share capital of the Company" below.
As at the Latest Practicable Date, the total number of shares of Bossini in issue was 3,322,720,177 and the Offeror was interested in 2,090,373,183 Bossini Shares. The Offeror is a wholly-owned subsidiary of the Company. As such, Mr. Li Ning is deemed to be interested in the same 2,090,373,183 Bossini Shares by virtue of his interests in the Shares.

APPENDIX

GENERAL INFORMATION

Save as disclosed above, none of the Directors or chief executive of the Company or their associates had any interests or short positions in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO or as recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code as at the Latest Practicable Date.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or a proposed Director is a director or employee of a company which had, or was deemed to have, an interest or short position in the shares or underlying shares of the Company which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO.

(b) Interests and short positions of substantial shareholders and other persons in the share capital of the Company

As at the Latest Practicable Date, save as disclosed below, so far as was known to any Director or chief executive of the Company, no other person or company (other than the Directors or chief executive of the Company) had interests or short positions in the Shares or underlying Shares of the Company as recorded in the register kept by the Company pursuant to section 336 of the SFO which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who were directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group.

Long positions in the Shares and underlying Shares

Name	Capacity	Number of Shares/ underlying Shares held	Approximate percentage of shareholdings
Substantial Shareholders
Mr. Li Chun^{(1)}	Beneficial owner	60,000,000
	Interest of controlled Corporation	5,812,443,151
		5,872,443,151	60.39%
Lead Ahead^{(2)}	Beneficial owner	2,132,420,382	21.93%
Victory Mind Assets^{(3)}	Beneficial owner	1,680,022,769	17.28%

APPENDIX

GENERAL INFORMATION

Name	Capacity	Number of Shares/ underlying Shares held	Approximate percentage of shareholdings
Ace Leader^{(3)}	Interest of controlled corporation	1,680,022,769	17.28%
Jumbo Top^{(3)}	Interest of controlled corporation	1,680,022,769	17.28%
Dragon City^{(4)}	Trustee	2,000,000,000	20.57%
TMF^{(3), (4)}	Trustee	3,680,022,769	37.85%
Other persons
Mr. ZHAO Jianguo^{(5)}	Beneficial owner	298,000,000
	Interest of spouse	700,000,000
	Interest of controlled corporation	12,963,200
		1,010,963,200	10.40%
Ms. LI Ying^{(5)}	Beneficial owner	700,000,000
	Interest of spouse	298,000,000
	Interest of controlled corporation	12,963,200
		1,010,963,200	10.40%
China Orient Asset Management (International) Holding Limited^{(6)}	Interest of controlled corporation	487,672,000	5.02%

Notes:

Mr. Li Chun has personal interest in 60,000,000 Shares and is deemed to be interested in the long positions of 5,812,443,151 Shares in aggregate through his interests in Lead Ahead, Victory Mind Assets and Dragon City, respectively as follows:

(a) the long position of 2,132,420,382 Shares is held by Lead Ahead, which is owned as to 60% by Mr. Li Ning and 40% by Mr. Li Chun;

(b) the long position of 1,680,022,769 Shares is held by Victory Mind Assets which is owned as to 57% by Ace Leader and 38% by Jumbo Top. All shares of Jumbo Top are held by TMF in its capacity as trustee of a discretionary trust. Mr. Li Chun is the settlor of the trust and is therefore deemed to be interested in such 1,680,022,769 Shares. Mr. Li Qilin is a beneficiary of the trust and is also therefore deemed to be interested in such 1,680,022,769 Shares. Mr. Li Chun is also a director of each of Victory Mind Assets and Jumbo Top; and

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APPENDIX

GENERAL INFORMATION

(c) the long position of 2,000,000,000 Shares is held by Dragon City in its capacity as trustee of a unit trust, the units of which are owned as to 60% by TMF and as to 40% by TMF, each as the trustee of a separate discretionary trust. Mr. Li Qilin is a beneficiary of one of the said separate trusts and is also therefore deemed to be interested in such 2,000,000,000 Shares. Mr. Li Chun is taken to be interested in 40% of the shares of Dragon City and is therefore deemed to be interested in such 2,000,000,000 Shares. Mr. Li Chun is a director of Dragon City.

Lead Ahead is owned as to 60% by Mr. Li Ning and 40% by his brother, Mr. Li Chun. Mr. Li Ning is also a director of Lead Ahead.
Please refer to note 1(b) under the section “Interests and short positions of directors and the chief executive in the shares and underlying shares and debentures of the Company and its associated corporations” and note 1(b) above. For avoidance of doubt and double counting, it should be noted that Ace Leader, Jumbo Top and TMF are deemed to be interested in the 1,680,022,769 Shares which Victory Mind Assets is interested in.
Please refer to note 1(c) under the section “Interests and short positions of directors and the chief executive in the shares and underlying shares and debentures of the Company and its associated corporations” and note 1(c) above. TMF is deemed to be interested in the 2,000,000,000 Shares which Dragon City is interested in.
Mr. Zhao Jianguo has personal interest in 289,666,667 Shares and 8,333,333 share options which are exercisable into 8,333,333 Shares. Ms. Li Ying, the spouse of Mr. Zhao Jianguo, has personal interest in the convertible bonds in the principal amount of HK$227,500,000 which are convertible into 700,000,000 Shares at the conversion price of HK$0.325 per Share, and has no maturity date. Double Essence Limited was interested in 12,963,200 Shares and is owned as to 50% by Mr. Zhao Jianguo and 50% by Ms. Li Ying respectively.
China Orient Asset Management (International) Holding Limited is deemed to be interested in the long position of 183,112,000 Shares and 304,560,000 Shares held by China Orient Multi-Strategy Master Fund and China Orient Enhanced Income Fund, respectively.

Save as disclosed above, the Company had not been notified and is not aware of any other persons who had an interest or a short position in the shares and underlying shares of the Company as recorded in the register required to be kept by the Company pursuant to Section 336 of the SFO which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who were directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group as at the Latest Practicable Date.

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APPENDIX

GENERAL INFORMATION

3. DIRECTORS' COMPETING INTERESTS

As at the Latest Practicable Date, save as disclosed below, so far as the Directors are aware of, none of the Directors nor their respective close associates (as defined in the Listing Rules) had any interest in any business which competes or is likely to compete, or is in conflict or is likely to be in conflict, either directly or indirectly, with the business of Group.

Name of Director	Name of Entity	Description of the Entity's Business	Nature of interest of the Director in the Entity
Mr. Li Ning	Li Ning Company Limited	mainly engaged in brand marketing, research and development, design, manufacturing, distribution and retail of professional and leisure footwear, sport apparels, equipment and accessories under the LI-NING brand and other licensed brands	director and substantial shareholder (within the meaning of the SFO)
Mr. Li Qilin	Li Ning Company Limited	as disclosed above	director and substantial shareholder (within the meaning of the SFO)

4. DIRECTORS' INTERESTS IN ASSETS

As at the Latest Practicable Date, none of the Directors had any interest, either directly or indirectly, in any assets which has since 31 December 2023 (being the date to which the latest published audited consolidated financial statements of the Group were made up), up to the Latest Practicable Date, been acquired or disposed of by or leased to, any member of the Group or are proposed to be acquired or disposed of by, or leased to, any member of the Group.

5. DIRECTORS' SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with any member of the Group which does not expire or is not determinable by such member of the Group within one year without payment of compensation (other than statutory compensation).

6. DIRECTORS' INTERESTS IN CONTRACT OR ARRANGEMENT OF SIGNIFICANCE

As at the Latest Practicable Date, none of the Directors was materially interested, directly or indirectly, in any contract or arrangement entered into by any member of the Group subsisting at the Latest Practicable Date and which is significant in relation to the businesses of any member of the Group.

APPENDIX

GENERAL INFORMATION

7. EXPERT AND CONSENT

The following are the qualifications of the expert who have given opinion contained in this circular:

Name	Qualification
Rainbow Capital (HK) Limited	A licensed corporation permitted to carry on Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO

Rainbow Capital has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its letter, advice, opinion and/or report and references to its name in the form and context in which they respectively appeared.

As at the Latest Practicable Date, Rainbow Capital (i) did not have any direct or indirect interest in any assets which had been acquired, disposed of by, or leased to any member of the Group, or was proposed to be acquired, or disposed of by, or leased to any member of the Group, since 31 December 2023, the date to which the latest audited financial statements of the Group was made up; and (ii) was not beneficially interested in the share capital of any member of the Group and did not have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

8. LITIGATIONS

As at the Latest Practicable Date, no member of the Group was engaged in any litigation or arbitration of material importance and no litigation or claim of material importance was known to the Directors to be pending or threatened by or against any member of the Group.

9. MATERIAL ADVERSE CHANGE

The Directors confirm that, as at the Latest Practicable Date, there has been no material adverse change in the financial or trading position of the Group since 31 December 2023, being the date to which the latest published audited consolidated financial statements of the Group were made up.

10. MISCELLANEOUS

(a) The company secretary of the Company is Ms. Chan Tsz Ping. She is a fellow member of the Association of Chartered Certified Accountants and a member of Hong Kong Institute of Certified Public Accountants.

(b) The registered office of the Company is located at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands.

APPENDIX

GENERAL INFORMATION

(c) The principal place of business of the Company is at 2/F., PopOffice, 9 Tong Yin Street, Tseung Kwan O, New Territories, Hong Kong.

(d) The Hong Kong branch share registrar and transfer office of the Company is Tricor Investor Services Limited of 17/F., Far East Finance Centre, 16 Harcourt Road, Hong Kong;

(e) The English text of this circular shall prevail over the Chinese text for the purpose of interpretation.

11. DOCUMENTS ON DISPLAY

Copies of the following documents will be published on the websites of the Stock Exchange (www.hkex.com.hk) and the Company (http://www.vivagoods.hk) for a period of 14 days from the date of this circular:

(a) Letter from Rainbow Capital, the text of which is set out on pages 30 to 61 in this circular; and

(b) the written consent referred to in the paragraph headed "7. Expert and consent" in this Appendix.

NOTICE OF EXTRAORDINARY GENERAL MEETING

VIVA GOODS COMPANY LIMITED

非凡領越有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 933)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (the “EGM”) of Viva Goods Company Limited (the “Company”) will be held at 2/F., PopOffice, 9 Tong Yin Street, Tseung Kwan O, New Territories, Hong Kong on Monday, 10 February 2025 at 4:00 p.m. for the purpose of considering and, if thought fit, passing, with or without modifications, the following resolution as an ordinary resolution of the Company.

Unless otherwise defined, capitalised terms defined in the circular of the Company dated 3 January 2025 (the “Circular”) of which this notice forms part shall have the same meanings when used herein.

ORDINARY RESOLUTION

“THAT

(a) the directors of the Company be and are hereby granted the specific mandate (the “Specific Mandate”) to exercise all the powers of the Company to allot and issue the Shares, credited as fully paid, to the Scheme Shareholders and Bossini Optionholders in accordance with the terms of the Scheme and the Option Offer; and

(b) the directors of the Company, acting collectively or individually, be and are hereby authorised, for and on behalf of the Company, to do all acts and things, to sign, execute and deliver all such documents and to take all such steps considered by such director(s) to be necessary, appropriate, expedient or desirable to give effect to the transaction set out in (a) above and all other matters incidental thereto and/or in connection with the implementation of the Specific Mandate, including (without limitation), agreeing to and making such variation, amendment or waiver in connection therewith which, in the opinion of the directors of the Company, is in the interests of the Company and its shareholders as a whole.”

By Order of the Board

Viva Goods Company Limited

LI Ning

Chairman and Chief Executive Officer

Hong Kong, 3 January 2025

NOTICE OF EXTRAORDINARY GENERAL MEETING

Executive Directors:
Mr. LI Ning (Chairman and Chief Executive Officer)
Mr. LI Chunyang
Mr. LI Qilin

Non-executive Directors:
Mr. Victor HERRERO
Mr. MA Wing Man
Ms. LYU Hong
Mr. QIAN Cheng

Independent Non-Executive Directors:
Mr. LI Qing
Mr. PAK Wai Keung, Martin
Mr. WANG Yan
Professor CUI Haitao

Head office and principal place of business in Hong Kong:
2/F., PopOffice
9 Tong Yin Street
Tseung Kwan O
New Territories
Hong Kong

Notes:
1. Pursuant to the Listing Rules, all the above resolutions are to be voted by poll at the above meeting.
2. A member entitled to attend and vote at the meeting is entitled to appoint one or, if he/she/it is the holder of two or more shares, more than one proxy to attend and vote on his/her/its behalf. A proxy need not be a shareholder of the Company.
3. The record date for determining the entitlement of the shareholders of the Company to attend and vote at the meeting will be the close of business on Tuesday, 4 February 2025. All transfer documents accompanied by the relevant share certificates must be lodged with the Company's Hong Kong branch share registrar, Tricor Secretaries Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong for registration no later than 4:30 p.m. on Tuesday, 4 February 2025.
4. In order to be valid, the form of proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such power of attorney or authority, must be deposited at the Company's Hong Kong branch share registrar, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong, not less than 48 hours before the time appointed for holding the meeting or any adjourned meeting (as the case may be).
5. Delivery of an instrument appointing a proxy should not preclude a shareholder from attending and voting in person at the above meeting or any adjournment thereof and in such event, the instrument appointing a proxy shall be deemed to be revoked.

71 -

NOTICE OF EXTRAORDINARY GENERAL MEETING

In the case of joint registered holders of a share of the Company, any one of such joint holders may vote at the meeting, either personally or by proxy, in respect of such share as if he/she/it were solely entitled thereto; but if more than one of such joint holders are present at the above meeting personally or by proxy, the vote of the senior who tenders a vote shall be accepted to the exclusion of the votes of the other joint holders. For this purpose, seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of such share.
If a tropical cyclone warning signal No. 8 or above is or is expected to be hoisted or a black rainstorm warning signal or “extreme conditions” caused by super typhoons is or is expected to be in force at any time after 11:00 a.m. (Hong Kong time) on the date of the EGM, the EGM will be adjourned in accordance with the articles of association of the Company and in compliance with the applicable laws and the Listing Rules. If the EGM is adjourned, the Company will post an announcement on the respective websites of the Stock Exchange at www.hkexnews.hk and the Company at http://www.vivagoods.hk notifying its members of the date, time and venue of the rescheduled EGM.
72 -

AI assistant

Viva Goods Co. Ltd. — Proxy Solicitation & Information Statement 2025

49575_rns_2025-01-02_9320029e-43b5-4a8e-a876-ea9a0f72f3ea.pdf

VIVA GOODS COMPANY LIMITED

VIVA GOODS COMPANY LIMITED

TERMS OF THE PROPOSAL

COMPARISON OF VALUE

CONDITIONS TO THE PROPOSAL AND THE SCHEME

WITHDRAWAL OF LISTING OF THE BOSSINI SHARES ON THE MAIN BOARD

PROPOSED ISSUE OF NEW SHARES UNDER SPECIFIC MANDATE AS CONSIDERATION FOR THE CANCELLATION AND EXTINGUISHMENT OF THE SCHEME SHARES UNDER THE SCHEME AND CANCELLATION OF BOSSINI SHARE OPTIONS UNDER THE OPTION OFFER

CONNECTED TRANSACTION

Notes:

SHAREHOLDING STRUCTURE OF THE COMPANY

REASONS AND BENEFITS OF THE PROPOSAL

The listed platform has provided limited equity financing capabilities

GENERAL INFORMATION ON THE PARTIES

The Offeror

The Group

The Bossini Group

LISTING RULES IMPLICATION

GENERAL

EGM

RECOMMENDATION

FURTHER INFORMATION

VIVA GOODS COMPANY LIMITED

BASIS OF OUR OPINION

PRINCIPAL TERMS OF THE PROPOSAL

CONDITIONS TO THE PROPOSAL AND THE SCHEME

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background and financial information of the Group and the Bossini Group

(i) The Group

Financial performance

FY2023 as compared to FY2022

Financial performance

6M2024 as compared to 6M2023

FY2023 as compared to FY2022

2. Information on the Offeror and the future intention of the Offeror

3. Reasons for and benefits of the Specific Mandate for the allotment and issuance of the Shares under the Proposal

4. Scheme Consideration

(i) Comparison of value

(iii) Historical trading liquidity of the Bossini Shares

5. Consideration for the Option Offer

RECOMMENDATION AND OPINION

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTERESTS

(b) Interests and short positions of substantial shareholders and other persons in the share capital of the Company

Long positions in the Shares and underlying Shares

3. DIRECTORS' COMPETING INTERESTS

4. DIRECTORS' INTERESTS IN ASSETS

5. DIRECTORS' SERVICE CONTRACTS

6. DIRECTORS' INTERESTS IN CONTRACT OR ARRANGEMENT OF SIGNIFICANCE

7. EXPERT AND CONSENT

8. LITIGATIONS

9. MATERIAL ADVERSE CHANGE

10. MISCELLANEOUS

11. DOCUMENTS ON DISPLAY

VIVA GOODS COMPANY LIMITED

NOTICE OF EXTRAORDINARY GENERAL MEETING

ORDINARY RESOLUTION

“THAT

More from Viva Goods Co. Ltd.

Viva Goods Co. Ltd. Proxy Solicitation & Information Statement 2025