09:27     GUOCO GROUP<00053> - Announcement (1)                               

    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.               
                                                                              
                                                                              
    Guoco Group Limited                                                       
    (Incorporated in Bermuda with limited liability)                          
    (Stock Code: 00053)                                                       
                                                                              
    CONNECTED TRANSACTION                                                     
                                                                              
     On 11 January 2005, DHE entered into the Sale and Purchase               
    Agreement with AHB for the proposed disposal of the entire interest       
    in DHI to AHB at a total consideration of HK$152,551,910.00 to be         
    fully satisfied in cash. The Sale and Purchase Agreement constitutes      
    a connected transaction for Guoco under the Listing Rules. As the         
    Sale Consideration falls within the de minimis threshold as set out       
    under Rule 14A.32(1) of the Listing Rules, no independent                 
    shareholders' approval is required. Details of the Proposed Disposal      
    will be disclosed in the next published annual report and accounts of     
    Guoco in accordance with Rules 14A.45(1) to (5) of the Listing            
    Rules.                                                                    
                                                                              
                                                                              
    SALE AND PURCHASE AGREEMENT DATED 11 JANUARY 2005                         
    Parties                                                                   
    Vendor:                        DHE, a wholly owned                        
                                   subsidiary of Guoco                        
    Purchaser:                     AHB, a wholly owned                        
                                   subsidiary of                              
                                   HLA                                        
                                                                              
                                                                              
                                                                              
    Sale Shares                                                               
    500,000 Shares representing the entire issued share capital of DHI.       
                                                                              
                                                                              
    Consideration                                                             
    The Sale Consideration of HK$152,551,910.00 was arrived at based on       
    a willing-buyer-willing-seller basis. It represents 1.2 times of          
    HK$127.1 million, being the audited net tangible assets of DHI as at      
    30 June 2004 of approximately HK$167.1 million after adjusting for a      
    total dividend of HK$40 million paid and/or payable by DHI to DHE         
    prior to completion of the Sale and Purchase Agreement. The Sale          
    Consideration shall be paid in cash by AHB upon completion of the         
    Sale and Purchase Agreement.                                              
                                                                              
    The audited net tangible assets of DHI as at 30 June 2004 were            
    approximately HK$167.1 million. The audited net profits before and        
    after tax of DHI for the year ended 30 June 2003 were approximately       
    HK$18.3 million and HK$16.3 million respectively. The audited net         
    profit before and after tax of DHI for the year ended 30 June 2004        
    were approximately HK$43.8 million and HK$42.5 million                    
    respectively.                                                             
                                                                              
    Conditions Precedent                                                      
    The completion of the Sale and Purchase Agreement is conditional          
    upon, amongst other things, the following:                                
                                                                              
    1.                                                                        
    approval from Bank Negara Malaysia for the purchase of the Sale           
    Shares (which approval was obtained on 3 December 2004) and for the       
    remittance of the Sale Consideration to DHE (which approval was           
    obtained on 5 January 2005);                                              
                                                                              
    2.                                                                        
    HKIA giving its no objection notification for AHB to become the           
    controller of DHI; and                                                    
                                                                              
    3.                                                                        
    approvals from the shareholders of AHB, HLA and HLCB respectively.        
                                                                              
                                                                              
    If any of the above conditions precedent is not fulfilled within 6        
    months from the date of the Sale and Purchase Agreement (or within        
    such extended period as the parties may mutually agree), either party     
    may at any time thereafter terminate the Sale and Purchase Agreement      
    by giving 14 days written notice to each other.                           
                                                                              
    Completion                                                                
    Completion of the Sale and Purchase Agreement will take place on the      
    7th day after the fulfillment of the conditions precedent or such         
    other date as may be mutually agreed by the parties.                      
                                                                              
    TERMS OF THE SALE AND PURCHASE AGREEMENT                                  
    The directors of Guoco (including the independent non-executive           
    directors) confirmed that the terms and conditions of the Sale and        
    Purchase Agreement were arrived at after an arm's length negotiation      
    and were considered to be fair and reasonable and in the interests of     
    the Company and its shareholders as a whole.                              
                                                                              
    REASONS FOR THE PROPOSED DISPOSAL