09:55 GUOCO GROUP<00053> - Announcement (2) HLI and HLIT 80,827,163 54,520,949 225.1 153.7 HLCom 17,420,787 8,408,643 21.1 29.6 FCCE 21,309,900 26,637,375 46.3 53.3 Total: 119,557,850 89,566,967 292.5 236.6 Based on the audited consolidated financial statements of CGB for the year ended 31 December 2003, the loss before and after tax for the year were approximately RM42.2 million (approximately HK$86.6 million) and RM40.6 million (approximately HK$83.3 million) respectively and the audited net asset value of CGB as at 31 December 2003 was approximately RM623.0 million (approximately HK$1,278.3 million). The loss before and after tax for the year ended 31 December 2002 were approximately RM2.6 million (approximately HK$5.3 million) and RM0.5 million (approximately HK$1.0 million) respectively. CGB had announced an unaudited consolidated profit before and after tax of approximately RM42.9 million (approximately HK$88.0 million) and RM43.6 million (approximately HK$89.5 million) respectively for the 9-month period ended 30 September 2004. Conditions Precedent The completion of the Securities Sale Agreement is conditional upon, amongst other things, the following conditions precedent being fulfilled: 1. such approval as may be necessary from the SC being obtained by the Purchaser; 2. the approval of the shareholders of the Vendors (as may be required) in general meeting for the sale of the Sale Securities being obtained; and 3. the completion of such due diligence as the Purchaser may opt to undertake and the results of such due diligence being satisfactory to the Purchaser in all material respects. If the conditions precedent are not fulfilled within 6 months from the date of the Securities Sale Agreement (or within such extended period as the parties may mutually agree), the Securities Sale Agreement shall be terminated. Completion Completion of the Securities Sale Agreement will take place within 10 Working Days after the fulfillment of the conditions precedent. TERMS OF THE SECURITIES SALE AGREEMENT The directors of Guoco (including the independent non-executive directors) confirmed that the terms and conditions of the Securities Sale Agreement were arrived at after an arm's length negotiation based on normal commercial terms and in the ordinary and usual course of business and were considered to be fair and reasonable and in the interests of the Company and its shareholders as a whole. BACKGROUND OF CGB The principal activities of CGB is investment holding. The major asset of CGB is a 22.3% investment in its associated company, BIL which is an investment holding company with primary listing on the SGX-ST and secondary listing on the London and New Zealand Stock Exchanges. BIL's core operating assets comprise Thistle Hotels Group and other investment projects. Thistle Hotels Group owns, leases or manages over 50 hotels in the United Kingdom, providing full services to both business and leisure travelers. REASONS FOR THE PROPOSED ACQUISITIONS The Proposed Acquisitions will enable Guoco to acquire substantial interests of approximately 40.03% in CGB Shares and 72.25% of CGB ICULS respectively and become the single largest shareholder of CGB. CGB will become an associated company of the Group after completion of the Proposed Acquisitions. GENERAL OFFER IMPLICATION Upon completion of the Proposed Acquisitions, the Purchaser will own 40.03% and 72.25% of the CGB Shares and CGB ICULS respectively. Pursuant to Section 6(l) of The Malaysian Take-overs Code, the Purchaser is obliged to extend a mandatory general offer to acquire the remaining CGB Shares and CGB ICULS the Purchaser does not hold based on the same terms of the Proposed Acquisitions. In the event pursuant to the mandatory general offer to be made by the Purchaser in accordance with The Malaysian Take-overs Code, the respective price paid by the Purchaser to the other holders of CGB Shares and CGB ICULS (not being the Vendors) is greater than RM1.20 per CGB Share or RM1.04 per CGB ICULS, the Purchaser shall, at the same time pay such additional amount as is equal to the difference between the price paid by the Purchaser to the other holders of CGB Shares and CGB ICULS and RM1.20 per CGB Share or RM1.04 per CGB ICULS as the case may be.