10:27 MING PAO ENT<00685> - Announcement (2) INFORMATION ON THE OMG GROUP OMG was incorporated as an exempted company in the Cayman Islands on 11 March 2005. Prior to the Proposed Spin-off, a reorganization will be carried out pursuant to which OMG will become the immediate holding company of OMH and its subsidiaries and a direct wholly-owned subsidiary of Winmax. Winmax is currently an indirect 60%-owned subsidiary of the Company. The Group is principally engaged in the publication of Chinese-language newspapers, magazines and books, as well as the provision of travel and travel related services. The OMG Group, which is the subject of the Proposed Spin-off, represents the Group's consumer lifestyle magazine operating arm. The OMG Group currently publishes three well-known lifestyle magazines in Hong Kong, namely, Ming Pao Weekly, Hi-TECH Weekly and City Children's Weekly, and provides contents to, and has the right to sell advertising space in, the magazines that incorporate the contents from four internationally-renowned lifestyle magazines, namely, Popular Science, Tomorrow's Technology Today, Digital Camera and TopGear, in the PRC. Details in respect of the Proposed Spin-off, including the size and structure of the Share Offer, the extent of the reduction in shareholding of the Company in OMG and the expected timetable, have not yet been finalized. A further announcement will be made by the Company after the structure of the Proposed Spin-off and the Share Offer is finalized. REASONS FOR AND BENEFITS OF THE PROPOSED SPIN-OFF The Board believes that the separate listing of OMG will provide OMG direct access to the capital market for equity and/or debt financing, and the value of the OMG Group would be more distinct, recognizable and easier to realize. The Proposed Spin-off will also enhance the transparency of the performance of OMG's business as well as its decision-making process and improve its responsiveness to market changes. The Board expects that the OMG Group, by having a separate management team and a non-political editorial platform, will be able to capitalize on the fast growing lifestyle magazine market in Hong Kong and the PRC. The Board believes that the Proposed Spin-off will be beneficial to the Shareholders because the Company will be able to realize the value of its investments in OMG, return value to its Shareholders in the form of liquid securities, as well as focus on developing its remaining business. CONDITIONS PRECEDENT FOR THE PROPOSED SPIN-OFF The Proposed Spin-off will be conditional on, among other things, the following: (a) the Shareholders approving the Proposed Spin-off; (b) the Stock Exchange granting approval for the Proposed Spin-off and the listing of, and permission to deal in, the shares of OMG in issue and to be issued under the Share Offer; and (c) the terms and structure of the Share Offer being agreed among the Company, OMG and the joint bookrunners in respect of the Share Offer. If the above conditions are not fulfilled, the Proposed Spin-off will not proceed and the Stock Exchange will be notified immediately and a notice will be published by the Company as soon as practicable thereafter. ASSURED ENTITLEMENT The Board will give due regard to the interests of the existing Shareholders by providing them with an assured entitlement to the shares of OMG if the Board decides to proceed with the Proposed Spin-off and the Share Offer (subject to certain conditions being fulfilled). Details of such assured entitlement have not yet been finalized. A further announcement will be made by the Company in due course giving details of the assured entitlement to be made to the qualifying Shareholders of the Company to subscribe for shares of OMG under the Share Offer.