WH Group Limited — M&A Activity 2001

Jan 23, 2001

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

HUEY TAI INTERNATIONAL LIMITED	GOLD BRILLIANT LIMITED
(Incorporated in Bermuda with limited liability)	(Incorporated in the British Virgin Islands with limited liability)

Conditional cash offers made jointly by

Anglo Chinese Corporate Finance, Limited and CEF Capital Limited

on behalf of

Gold Brilliant Limited

a 65% owned subsidiary of China Strategic Holdings Limited

and

a 35% owned associated company of Star East Holdings Limited

to acquire all the issued shares and outstanding options

to subscribe for shares

in Huey Tai International Limited

other than those already owned by

Gold Brilliant Limited

or

parties acting in concert with it

Introduction

This announcement is made further to, among other things, the joint announcement made by the respective boards of directors of Huey Tai, Asean Resources, Gold Brilliant (the ``Offeror'') and JV Co. dated 25th November, 2000.

Completion of the Huey Tai Sale and Purchase Agreement

The Huey Tai Sale and Purchase Agreement was completed on 19th January, 2001.

Huey Tai Offers

As a result of completion of the Huey Tai Sale and Purchase Agreement, the Offeror is obliged to make the Huey Tai Offers under the Takeovers Code, and according to the expected timetable, the latest time for receiving acceptances before the Closing Date is at 4:00 p.m. on Monday, 12th February, 2001.

Despatch of the Composite Document

The Composite Document comprising, among other things, an expected timetable, a letter from the Independent Board Committee and a letter from an independent financial adviser has been despatched to the Huey Tai Shareholders and the Huey Tai Share Optionholders today.

Warning:

Investors are urged to exercise extreme caution in dealing in the Huey Tai Shares.

Terms defined in the Composite Document shall have the same meanings when they are used in this announcement unless the context otherwise requires.

Introduction

This announcement is made further to, among others things, the joint announcement made by the respective boards of directors of Huey Tai, Asean Resources, the Offeror and JV Co dated 25th November, 2000.

Completion of the Huey Tai Sale and Purchase Agreement

Resolutions were duly passed by the Huey Tai Shareholders at the special general meeting on 17th January, 2001 to approve, among others things, the Asean Sale and Purchase Agreement and the Acquisition Agreement. The Huey Tai Sale and Purchase Agreement, the Asean Sale and Purchase Agreement and the Acquisition Agreement were simultaneously completed on 19th January, 2001. Following completion of the Huey Tai Sale and Purchase Agreement, the Offeror and parties acting in concert with it are interested, as at 19th January, 2001, being the Latest Practicable Date, in 604,823,608 Huey Tai Shares, representing approximately 38.65% of the entire issued share capital of Huey Tai.

Huey Tai Offers

Consequently, an obligation has arisen under the Takeovers Code for the Offeror to make the conditional cash offers for all the Huey Tai Shares and Huey Tai Share Options not already owned by the Offeror or parties acting in concert with it. In compliance with the Takeovers Code, Anglo Chinese and CEF are making the Huey Tai Offers on behalf of the Offeror.

Despatch of the Composite Document

The Offeror and Huey Tai jointly announced that the Composite Document containing, among other things, detailed terms of the conditional cash offers jointly made by Anglo Chinese and CEF on behalf of the Offeror for all the issued shares and outstanding options to subscribers for shares in Huey Tai other than those already owned by the Offeror and parties acting in concert with the Offeror has been despatched to the Huey Tai Shareholders and the Huey Tai Share Optionholders on Monday, 22nd January, 2001.

The Board also announces that an Independent Board Committee comprising Mr. Cheng Wui See, Henry and Mr. Tsang Link Carl, Brian, both the independent non-executive directors of Huey Tai, has been set up to consider the terms of the Huey Tai Offers and to advise the Independent Huey Tai Shareholders and the Huey Tai Share Optionholders on whether the terms of the Huey Tai Offers are fair and reasonable. Somerley Limited, an independent financial adviser has been appointed to consider the terms of the Huey Tai Offers and to advise the Independent Board Committee on whether the terms of the Huey Tai Offers are fair and reasonable. The Independent Board Committee has already made the recommendations to the Independent Huey Tai Shareholders and the Huey Tai Shares Optionholders in respect of the Huey Tai Offers.

Huey Tai Shareholders and Huey Tai Share Optionholders are advised not to take any action in connection with the Huey Tai Offers until they have considered the recommendation made by the Independent Board Committee in respect of the Huey Tai Offers.

In the mean time investors are urged to exercise extreme caution in dealing in the Huey Tai Shares.

Set out below is a statement of unaudited pro forma consolidated net tangible asset value of the Huey Tai Group based on the audited consolidated net tangible asset value of the Huey Tai Group as at 31st March, 2000 and adjusted as follows:

	HK$'000
Audited consolidated net tangible asset value of the Huey Tai Group as at 31st March, 2000	2,447,469
Add: Unaudited consolidated profit of the Huey Tai Group for the six months ended 30th September, 2000	29,445
Capital reserve on consolidation arising from increase in interest in an associated company for the six months ended 30th September, 2000	2,652
Less: Goodwill arising from acquisition of interest in a subsidiary for the six months ended 30th September, 2000 (Note 1)	(54,336)
Other property revaluation reserve released upon pre-sale of properties under development held for sale for the six months ended 30th September, 2000 (Note 2)	(21,027)
Share of an associated company's reserve movements for the six months ended 30th September, 2000 (Note 3)	(15,104)
Exchange losses arising on translation of financial statements of overseas operations for the six months ended 30th September, 2000	(897)
Unaudited consolidated net tangible asset value of the Huey Tai Group as at 30th September, 2000	2,388,202
Less: Net deficit arising from the revaluation of property interests as at 30th November, 2000 (including 63.68% share of those held by Asean Resources)	(12,018)
	2,376,184
Add: Gross proceeds from the disposal of the Asean Sale Shares	573,494
Less: Diminution in the consolidated net tangible asset value of the Huey Tai Group upon completion of the disposal of the Asean Sale Shares (Note 4)	(2,623,899)
Unaudited pro forma consolidated net tangible asset value before accounting for the decrease in net tangible assets arising from the Acquisition (Note 5)	325,779
Less: Decrease in net tangible assets arising from the Acquisition (Note 6)	(117,500)
Unaudited pro forma consolidated net tangible asset value after accounting for the decrease in net tangible assets arising from the Acquisition	208,279
Unaudited pro forma consolidated net tangible asset value per Huey Tai Share after accounting for the decrease in net tangible assets arising from the Acquisition (based on 1,564,735,970 Huey Tai Shares as at the Latest Practicable Date)	HK$0.133

Notes:

1. The amount represents the excess of the purchase consideration over the fair value ascribed to the Huey Tai Group's share of the separable net assets at the date of acquisition of Oz New Media Inc., a subsidiary of Huey Tai.

2. The amount represents other property revaluation reserve included as profit for the six months ended 30th September, 2000 upon the pre-sale of the properties under development held for sale.

3. The amount represents the share of the reduction in the reserves of Paul Y. - ITC, a then associated company of Huey Tai which had ceased to be regarded as an associated company of the Huey Tai Group upon completion of the Asean Shares Sale for the six months ended 30th September, 2000.

4. This sum does not include a provision for impairment loss of the investment in Paul Y. - ITC, a then associated company of the Huey Tai Group. As at the Latest Practicable Date, the direct interest of the Huey Tai Group in Paul Y. - ITC is approximately 1.8% of the issued share capital of Paul Y. - ITC.

5. Based on 1,564,735,970 Huey Tai Shares as to the Latest Practicable Date, the unaudited pro forma consolidated net tangibles asset value per Huey Tai Share before completion of the Acquisitions was HK$0.208.

6. The amount represents the excess of the purchase consideration over the aggregate net tangible assets of China Youth, Komatic and S. P. Co.

Expected timetable

Huey Tai Share Offer opens	Monday, 22nd January, 2001
Latest time for receiving acceptances before the Closing Date	4:00 p.m. on Monday, 12th February, 2001
Closing Date(1)	9:30 a.m. on Tuesday, 13th February, 2001
Press announcement of the outcome of the Huey Tai Share Offer	Tuesday, 13th February, 2001

Assuming the Huey Tai Share Offer becomes or is declared unconditional on 12th February, 2001:

Payment of remittances under the Huey Tai Offers in respect of valid acceptances lodged on or before 4:00 p.m. on Monday, 12th February, 2001 to be despatched on or before(2)	Thursday, 22nd February, 2001
Latest time for receiving acceptances(3)	4:00 p.m. Monday, 26th February, 2001
Closing date of the Huey Tai Offers(4)	9:30 a.m. Tuesday, 27th February, 2001
Right of withdrawal exercisable on(5)	Tuesday, 6th March, 2001
Payment of remittances under the Huey Tai Offers in respect of valid acceptances lodged after 4:00 p.m. on Monday, 12th February, 2001 but on or before 4:00 p.m. on Monday, 26th February, 2001 to be despatched on or before(6)	Thursday, 8th March, 2001

Notes:

(1) In the event that the Huey Tai Offers have not become or been declared unconditional on or before 9:30 a.m. on 13th February, 2001, the Huey Tai Offers will lapse unless extended in accordance with the Takeovers Code.

(2) Each Huey Tai Shareholder and Huey Tai Share Optionholder who validly accepts the Huey Tai Offers on or before 4:00 p.m. on Monday, 12th February, 2001 will be paid the applicable consideration within 10 calendar days of the later of the date on which the Huey Tai Offers become or are declared unconditional in all respects and the date on which all the relevant documents have been received by the Share Registrar to render the acceptance under the Huey Tai Offers complete and valid.

(3) Under the Takeovers Code, the Huey Tai Offers must be closed by 9:30 a.m. on any closing date and in order to be valid, acceptances must be received by 4:00 p.m. on the preceding day. Acceptances received after 4:00 p.m. on such preceding day will only be valid if the Huey Tai Offers are revised or extended before the closing date, or if the Huey Tai Offers have become or been declared unconditional as to acceptances by 4:00 p.m. on the day preceding such closing date.

(4) As required by the Takeovers Code, where the Huey Tai Offers become or are declared unconditional, it should remain open for acceptance for not less than 14 calendar days thereafter. If the Huey Tai Offers become or are declared unconditional on 12th February, 2001, the first date on which the Huey Tai Offers may close is 27th February, 2001. The Offeror reserves the right, subject to the Takeovers Code, to keep the Huey Tai Offers open beyond that date. The Offeror reserves the right to extend the Huey Tai Offers in order to allow it to achieve the level of acceptances necessary to enable it to proceed to compulsory acquisition under the Companies Act, although it does not currently intend to avail itself of any power of compulsory acquisition. Under the Companies Act, the Huey Tai Offers may not remain open for acceptance for more than four months from 22nd January, 2001 being the date of the making of the Huey Tai Offers, if the Offeror wishes to exercise its rights of compulsory acquisition.

(5) Under the Takeovers Code, if the Huey Tai Share Offer has not become or been declared unconditional in all respects by 6th March, 2001, being the day falling 21 days from the Closing Date, an acceptor of the Huey Tai Share Offer or the Huey Tai Share Option Offer shall be entitled to withdraw his acceptance. Such entitlement to withdraw shall be exercisable until the Huey Tai Share Offer becomes unconditional.

(6) Assuming that the Huey Tai Offers become or are declared unconditional on 12th February, 2001, the applicable consideration for any acceptance of the Huey Tai Offers received between 13th February, 2001 and 26th February, 2001 will be paid within 10 calendar days of the date upon receipt of all the relevant documents by the Share Registrar to render the acceptance under the Huey Tai Offers complete and valid.

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

``Anglo Chinese''	Anglo Chinese Corporation Finance, Limited, an investment adviser and dealer registered under the Securities Ordinance and one of the joint financial advisers to the Offeror
``CEF''	CEF Capital Limited, a dealer registered under the Securities Ordinance and one of the joint financial advisers to the Offeror

By order of the board	By order of the board
Huey Tai International Limited	Gold Brilliant Limited
Chan Boon Ho, Peter	Chau Mei Wah, Rosanna
Chairman	Director

22nd January, 2001

This announcement includes particulars given in compliance with the Takeovers Code for the purpose of giving information with regard to the Huey Tai Group, other than China Youth, Komatic and S. P. Co.. The information contained in this announcement, insofar as it relates to Huey Tai, has been supplied by the Huey Tai Directors who have taken all reasonable care to ensure that the information stated herein, insofar as it relates to the Huey Tai Group, other than China Youth, Komatic and S. P. Co., is accurate. The Huey Tai Directors jointly and severally accept full responsibility for the accuracy of such information contained in this announcement insofar as it relates to the Huey Tai Group, other than China Youth, Komatic and S. P. Co., and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, opinions expressed by them herein have been arrived at after due and careful consideration and there are no other facts not contained herein the omission of which would make any statement made by them contained in this announcement misleading.

The information contained in this announcement other than the information relating to the Huey Tai Group (excluding China Youth, Komatic and S. P. Co.) has been supplied by the directors of the Offeror who have taken all reasonable care to ensure that the information stated herein, other than the information relating to the Huey Tai Group (excluding China Youth, Komatic and S. P. Co.) is accurate. The directors of the Offeror jointly and severally accept full responsibility for the accuracy of such information contained in this announcement, other than the information relating to the Huey Tai Group (excluding China Youth, Komatic and S. P. Co.) and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, the opinions expressed by them herein, have been arrived at after due and careful consideration and there are no other facts not contained herein, the omission of which would make any statement made by them contained in this announcement misleading.

Please also refer to the published version of this announcement in the (Hong Kong iMail)