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| A circular in relation to the disposal of 70% interest in the Founder Data Group to MIT by Founder has been despatched to the shareholders of Founder on 9th September, 2000.
A circular in relation to the Whitewash Waiver, the Acquisition, the Disposal, the Management Arrangement (including the Possible Disposal), the Equity Transfer, the Subscriptions and the Placing has been despatched to the shareholders of MIT on 9th September, 2000. Additional financial information relating to MIT is set out below. |
Reference is made to the joint announcements made by the respective boards of directors of Founder and MIT dated 24th May, 2000, 14th June, 2000, 5th July, 2000, 26th July, 2000, 16th August, 2000 and 6th September, 2000 respectively.
Each of Founder and MIT has issued a circular (together, the "Circulars") to its respective shareholders in relation to, inter alia, (a) (in the case of Founder) a major transaction; and (b) (in the case of MIT) (i) major and connected transactions; (ii) placing and subscription of new Shares of MIT; and (iii) the Whitewash Waiver.
The circular issued by MIT contains, inter alia, certain financial information relating to the Group and the Enlarged Group, including a statement of the pro forma unaudited adjusted consolidated net tangible assets of the Enlarged Group immediately following the Transaction Completion Date, which is based on the audited consolidated financial statements of the Group as at 31st December, 1999, adjusted to reflect the effect of the Acquisition, the Equity Transfer, the Disposal, the Subscriptions, the Placing and certain adjustments since 31st December, 1999. An extract of the said statement of the pro forma unaudited adjusted consolidated net tangible assets of the Enlarged Group is reproduced below.
HK$'000 HK$'000
Audited consolidated net assets
of the Group as at 31st
December, 1999 186,614
Add: Unaudited consolidated net loss
attributable to the Shareholders
for the four months ended 30th
April, 2000 (7,215)
Add: Goodwill on acquisition
of additional interests
in a subsidiary (200)
----------
Unaudited consolidated net assets
of the Group as at
30th April, 2000 179,199
The Acquisition
Founder Data Group
(a) Value of business acquired
- Pro forma net assets as at
31st May, 2000 (note (i)) 18,799
- Surplus arising in business valuation 464,801
----------
483,600
(b) Discount on acquisition (44,040)
----------
(c) Consideration to be satisfied by
the issue of Shares 439,560
----------
The Equity Transfer
Datacom
(a) Value of business acquired
- Pro forma net assets as at
31st May, 2000 (note (ii)) 258
- Surplus arising in business valuation 83,069
----------
83,327
(b) Premium on acquisition 9,913
----------
(c) Consideration to be satisfied by
the issue of Shares 93,240
----------
Total consideration for the Acquisition
and the Equity Transfer 532,800
Less: Estimated expenses relating to the
Acquisition And the Equity Transfer (10,000)
----------
Increase in net assets of the Group after
the Acquisition And the Equity Transfer 522,800
The Disposal
(a) Pro forma net assets of the MITI Group
as at 30th April, 2000 (61,476)
(b) Net proceeds from the Disposal 61,476
----------
Increase in net assets of the Group after
the Disposal -
Net proceeds from the Placing and the
Subscriptions 104,429
Net proceeds from the issue of the Shares
arising from the exercise of share
options after 30th April, 2000 1,825
----------
Pro forma unaudited adjusted consolidated
net assets of the Enlarged Group 808,253
Less: Net surplus arising on business
valuation in respect of the
Acquisition and the Equity
Transfer (513,743)
----------
294,510
Less: Intangible assets of the Founder
Data Group as at 31st May, 2000 (244)
Less: Intangible assets of the Group
as at 30th April, 2000 (4,385)
----------
Pro forma unaudited adjusted
consolidated net tangible
assets of the Enlarged
Group 289,881
==========
| Note (i): | Pro forma net assets of the Founder Data Group as at 31st May, 2000 have been prepared on the assumption that 60.1% interests in AdTargeting, at that time held by Beijing Founder Electronics Co., Ltd, had been transferred to Founder Data on that date. |
| Note (ii): | Pro forma net assets of Datacom as at 31st May, 2000 have been prepared on the assumption that 19.9% interests in AdTargeting had been transferred by Yahoo! to Datacom on that date. |
Each of Founder and MIT wishes to point out that the general meetings for their respective shareholders are convened to be held on Monday, 25th September, 2000. Notices of the general meetings are set out in the Circulars. The completion of the form of proxy will not preclude the respective shareholders of Founder and MIT from attending and voting at the relevant special general meetings of Founder and MIT in person should they so wish. Completion is expected to take place on or before 30th September, 2000.
As the completion of the Acquisition, the Disposal, the Possible Disposal, the Equity Transfer, the Placing and the Subscriptions are subject to a number of conditions as stated in the first joint announcement dated 24th May, 2000, shareholders should note that such transactions may or may not proceed. Shareholders and potential investors are advised to exercise extreme caution in dealing in the shares of both Founder and MIT.
DEFINITIONS
| "Acquisition" | the acquisition of the entire issued share capital of Founder Data by MIT |
| "AdTargeting" | Beijing AdTargeting Inc., a wholly foreign owned enterprise established in the PRC whose registered capital is beneficially owned as to 19.9% by Yahoo! (through Datacom) and as to 80.1% by Founder Data |
| "Datacom" | Datacom Developments Limited, a company incorporated in the British Virgin Islands and a wholly-owned subsidiary of Yahoo! which directly owns a 19.9% interest in AdTargeting |
| "Disposal" | the disposal from MIT to Ricwinco of the entire issued share capital of Management Investment & Technology International Inc. and the assignment of the interest in the indebtedness due to MIT by the MITI Group |
| "Enlarged Group" | MIT and its subsidiaries immediately following Transaction Completion Date, including the Yung Wen Group, the MITC Group, the Founder Data Group and Datacom but excluding the MITI Group |
| "Equity Transfer" | the transfer of a 19.9% interest in AdTargeting to be effected by the sale of its 100% interest in Datacom by Yahoo! to MIT |
| "Founder" | Founder Holdings Limited |
| "Founder Data" | Founder Data Corporation International Limited |
| "Founder Data Group" | Founder Data and its subsidiaries and associated companies, namely an 80.1% interest in Beijing AdTargeting Inc., a 100% interest in Founder EC-Media Limited, a 100% interest in Founder EC-Tech Limited and a 60% interest in Founder E-Town Limited, a 40% interest in Founder iASPEC Limited, and a 40% interest in MC.Founder Limited |
| "Group" | MIT and its subsidiaries |
| "MIT" | Management Investment & Technology (Holdings) Limited |
| "MITC Group" | all of those companies which are subsidiaries of MIT except (i) the MITI Group and (ii) the Yung Wen Group before the Transaction Completion Date |
| "MITI Group" | Management Investment & Technology International Inc. (a wholly-owned subsidiary of MIT), its subsidiaries and associated companies as at the Transaction Completion Date |
| "Placing" | the placing of 75,560,000 new Shares in aggregate at a price of HK$1.00 per Share |
| "Possible Disposal" | the possible sale by MIT to Ricwinco of its interest in the entire issued share capital of Yung Wen Investment & Finance Limited |
| "Ricwinco" | Ricwinco Investment Limited, the controlling shareholder of MIT |
| "Share(s)" | share(s) of HK$0.10 each in the share capital of MIT |
| "Subscriptions" | the subscription of an aggregate of 31,000,000 new Shares by Founder and Mr. Cheung Shuen Lung, a director of Founder, at HK$1.00 per Share |
| "Transaction Completion Date" | the date on which the Acquisition, the Disposal, the Equity Transfer, the Placing and the Subscriptions will be completed |
| "Whitewash Waiver" | a waiver from the general offer obligation pursuant to Note 1 of the Notes on dispensations from Rule 26 of the Hong Kong Code on Takeovers and Mergers |
| "Yahoo!" | Yahoo! Inc., a United States corporation incorporated in the State of Delaware whose shares are listed on NASDAQ and an independent third party of MIT |
| "Yung Wen Group" | Yung Wen Investment & Finance Limited and its subsidiaries and associated companies as at completion of the Possible Disposal |
| By the Order of the Board of Founder Holdings Limited Cheung Shuen Lung President |
By the Order of the Board of Management Investment & Technology (Holdings) Limited Richard Chih Shin Yung Chairman |
Hong Kong, 9th September, 2000
The directors of Founder and MIT jointly and severally accept full responsibility for the accuracy of the information contained in this announcement and confirm, having made all reasonable enquiries, that to the best of their knowledge, their opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any of their statements in this announcement misleading.
Please also refer to the published version of this announcement in Hong Kong iMail, Hong Kong Economic Journal and Hong Kong Economic Times.
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