09:38 EMPEROR IHL<00163> - Announcement (4) Implications under the Takeovers Code Worthly Strong is beneficially interested in 204,678,600 Shares, representing approximately 22.04% of the issued capital of EEH as at the date hereof. After the Acquisition, Worthly Strong will be beneficially interested in 309,087,600 Shares, representing approximately 33.28% of the issued capital of EEH. Accordingly, Worthly Strong, its associates and its concert parties would be required to make a mandatory offer for the Shares not owned by them under Rule 26 of the Takeovers Code as a result of the Acquisition. Worthly Strong is an indirect wholly-owned subsidiary of the Company and a substantial shareholder of EEH. The Company is owned by Charron (which is indirectly owned by the AY Trust) as to 65.04%. The Vendor is indirectly beneficially owned by the AY Trust and Mr Albert Yeung respectively in the ratio of 21,742,615 to 1. Therefore, Worthly Strong, the Vendor, the Company and the AY Trust are acting in concert in respect of EEH. Application will be made by Worthly Strong, its associates and its concert parties to the Executive for the Waiver pursuant to Note 6 to Rule 26.1 of the Takeovers Code. Reasons for and benefits of the Acquisition The Company is an investment company and its subsidiaries are principally engaged in property investment and development in Hong Kong, securities brokerage and provision of financial services, furniture retailing, hotel operation and publishing and printing. The Directors consider that the Acquisition is a good investment opportunity by allowing the Group to increase its stake in EEH and hence participate further in the tourist and entertainment business which the Directors consider it have great business potential. The Company intends to hold the Sale Shares as long term investments. In view of such a good investment opportunity, the Company intends to acquire further shares of EEH from the market but will not trigger a general offer obligation under the Takeovers Code in any event. The AY Trust also intends to acquire, through Charron, further Shares of the Company from the market in order to further invest in both the Company and EEH. The Directors consider that the terms of the Sale and Purchase Agreement fair and reasonable and they are in the interests of the Company and its Shareholders as a whole. GENERAL An Independent Board Committee will be formed to advise the Independent Shareholders and an independent financial adviser will be appointed to advise the Independent Board Committee and the Independent Shareholders in respect of the Acquisition. At the SGM, an ordinary resolution will be proposed to approve the Acquisition. Charron and its associates will abstain from voting at the SGM on such resolution. An application will be made to the Stock Exchange for the listing of and permission to deal in the Consideration Shares. A circular containing, inter alia, (i) further information regarding the details of the Acquisition; (ii) the advice of the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the Acquisition; (iii) the recommendation of the Independent Board Committee to the Independent Shareholders in relation to the Acquisition; and (iv) a notice convening the SGM will be despatched to the Shareholders as soon as practicable. TERMS USED IN THIS ANNOUNCEMENT "associates" has the same meaning as defined in the Listing Rules "Acquisition" the acquisition of the Sale Shares "AY Trust" The Albert Yeung Discretionary Trust (of which Mr. Albert Yeung is the founder), a controlling Shareholder of the Company "Board" the board of Directors "Charron" Charron Holdings Limited, a company indirectly owned by the AY Trust and a controlling Shareholder of the Company