10:44 MELCO INT'L DEV<00200> - Announcement & Resumption (3) The Great Wonders Agreement The injection of 30% equity interests in Great Wonders by Melco to Melco Entertainment after acquisition of the same from STDM is treated as a deemed disposal under the Listing Rules, which constitutes a discloseable transaction of Melco under Rule 14.06 of the Listing Rules and is subject to the requirements of reporting, announcement and issue of a circular as set out in Chapter 14 of the Listing Rules. An independent board committee of Melco comprising its independent non-executive Directors will be appointed to advise the Independent Shareholders on whether or not the terms of the Third Agreement and the transactions contemplated thereunder, including the proposed allotment and issue of Consideration Shares are fair and reasonable and in the interests of the Independent Shareholders as a whole. An independent financial adviser will be appointed to advise the independent board committee thereon. A circular containing, among other things, (i) the principal terms of the Third Agreement; (ii) the principal terms of the Great Wonders Agreement; (iii) the valuation report of the Land; (iv) the recommendation from the independent board committee of Melco in respect of the Third Agreement and the transactions contemplated thereunder; (v) a letter of advice from the independent financial adviser to the independent board committee of Melco in respect of the Third Agreement and the transactions contemplated thereunder; and (vi) a notice of the EGM will be dispatched to the Shareholders within 21 days from the publication date of this announcement. At the request of Melco, the Shares have been suspended from trading on the Stock Exchange at 9:30 a.m. on 18 March 2005 pending the release of this announcement. Application has been made by Melco to the Stock Exchange for the resumption of trading in Shares with effect from 9:30 a.m. on 23 March 2005. BACKGROUND As disclosed in the announcement and circular of Melco respectively dated 13 September 2004 and 11 October 2004, Melco has entered into the First Agreement with STDM to acquire 50% equity interests in Great Wonders from STDM for a consideration of HK$100 million. Subsequent to the completion of the First Agreement, and by the announcement and circular of Melco respectively dated 23 November 2004 and 5 January 2005, Melco entered into the Second Agreement with STDM to acquire an additional 20% equity interests in Great Wonders from STDM for a consideration of HK$56 million. Immediately following the completions of the First Agreement and the Second Agreement, Great Wonders was owned as to 70% by Melco (with the same subsequently transferred to Melco Entertainment prior to the formation of the JV Group pursuant to the Subscription Agreement) and 30% by STDM. Pursuant to the completion of the Subscription Agreement in respect of the formation of the JV Group, as disclosed in the announcements and circular of Melco respectively dated 23 November 2004, 23 December 2004 and 5 January 2005, which took place on 8 March 2005, the JV Group has been formed and the existing structure of which is as follow: Immediately after completions of the Third Agreement and the Great Wonders Agreement, the structure of the JV Group will become as follows: Notes: 1. Pursuant to the Subscription Agreement, PBL Asia has made the capital contribution of US$163 million (equivalent to HK$1,270 million) to Melco PBL Holdings, which is the principal holding company of the JV Group. 2. Melco PBL International Limited is an intermediary company newly formed pursuant to the Subscription Agreement. 3. Pursuant to the terms of the Shareholders Deed, Melco Leisure holds 20% direct interest in Melco Entertainment and hence, the total attributable interest held by Melco in Melco Entertainment is 60%. In addition, since Melco continues to retain the control of the composition of the board of directors of Melco Entertainment, Melco Entertainment, Great Wonders and Mocha Slot are non wholly-owned subsidiaries of Melco.