Beijing Enterprse Mdcl & Hlth Ind Gp : Announcements and Notices - Discloseable Transaction in Relation to Subscription of Beijing Sports Shares

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2389) DISCLOSEABLE TRANSACTION IN RELATION TO SUBSCRIPTION OF BEIJING SPORTS SHARES PROPOSED SUBSCRIPTION

On 25 July 2017, the Company and Beijing Sports entered into the Subscription Agreement, pursuant to which, among others, the Company has conditionally agreed to subscribe for or to procure its nominee(s) to subscribe for, and Beijing Sports has conditionally agreed to allot and issue to the Company (or its nominee(s)), 122,000,000 Subscription Shares at the Subscription Price of HK$1.88 per Beijing Sports Share. The Subscription Shares to be subscribed for by the Company (or its nominee(s)) represent approximately 9.41% of the issued share capital of Beijing Sports as enlarged by the allotment and issue of the Subscription Shares.

LISTING RULES IMPLICATIONS

As one of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of the Subscription is more than 5% but less than 25%, the Subscription constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting and announcement requirements under the Listing Rules.

Warning: As the Subscription Completion is subject to the satisfaction and/or waiver (where applicable) of the conditions set out in the Subscription Agreement, the Subscription may or may not proceed to completion. Shareholders and potential investors of the Company should exercise caution when dealing in the Shares or any securities of the Company. THE SUBSCRIPTION AGREEMENT

Date: 25 July 2017

Issuer: Beijing Sports

Subscriber: The Company (or its nominee(s))

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, as at the date of this announcement, save for the shareholding interest and the directorship in Beijing Sports (details as shown in the sections "Changes in Shareholding Structure of Beijing Sports" and "General" below), Beijing Sports and its controlling and substantial shareholders are independent of and not connected with the Company and its connected persons.

SUBSCRIPTION SHARES

The Company has conditionally agreed to subscribe for or to procure its nominee(s) to subscribe for, and Beijing Sports has conditionally agreed to allot and issue to the Company (or its nominee(s)), the Subscription Shares at the Subscription Price pursuant to the Subscription Agreement.

The Subscription Shares to be subscribed for by the Company (or its nominee(s)) represent approximately 9.41% of the issued share capital of Beijing Sports as enlarged by the allotment and issue of the Subscription Shares.

The Subscription Shares, when issued and fully paid up, shall rank pari passu in all respects with all other Beijing Sports Shares then in issue and in particular, will rank in full for all dividends and other distributions declared, made or paid at any time on or after the date of the allotment and issue of the Subscription Shares.

CONSIDERATION

The consideration of HK$229,360,000 shall be payable by the Company in cash on the date of Subscription Completion. The payment for the consideration will be funded by the internal resources of the Company.

The Subscription Price of HK$1.88 per Beijing Sports Share was arrived at after arm's-length negotiations between the Company and Beijing Sports after taking into account (i) the historical operating and financial performance of the Beijing Sports Group; (ii) the historical and recent trading prices and trading volume of Beijing Sports; and (iii) the growth potential of the business of the Beijing Sports Group together with the synergies that may be derived from the businesses of the Group and the Beijing Sports Group.

The Subscription Price represents an approximately 20.3% discount to the average closing price of Beijing Sports Shares as quoted on the Main Board of the Stock Exchange for the last five consecutive trading days immediately preceding the date of the Subscription Agreement.

CONDITIONS OF THE SUBSCRIPTION

Subscription Completion is conditional upon satisfaction (or where applicable, waiver) of the following conditions:

1. the Beijing Sports Shareholders having passed resolutions at the EGM approving the Subscription Agreement and all other transactions contemplated under the Subscription Agreement and the grant of a specific mandate for the allotment and issue of the Subscription Shares in accordance with the Listing Rules;

2. the listing committee of the Stock Exchange having granted the listing of and the permission to deal in the Subscription Shares and such grant being in force and not having been revoked;

3. from the date of the Subscription Agreement to the date of Subscription Completion, the Beijing Sports Shares continuing to be listed and traded on the Stock Exchange (other than suspension of trading pending the issue of announcements by Beijing Sports relating to, among other things, the Subscription) at all times and Beijing Sports not having received indications from the Stock Exchange and/or the SFC on or before the date of Subscription Completion that the listing of Beijing Sports Shares on the Stock Exchange will or may be revoked or rejected as a result of the completion of the Subscription Agreement or the terms of the Subscription Agreement (and/or for any other reasons);

4. all consents and approval of any relevant governmental authority in Hong Kong and other relevant jurisdiction which are necessary for the entering into and implementation of the Subscription Agreement and the transactions contemplated thereunder having been obtained by Beijing Sports;

5. the Company having completed and being satisfied with the results of the due diligence exercise on the Beijing Sports Group;

6. there not having been, at any time before the date of Subscription Completion:

7. any material adverse change which is material in the context of the Subscription; and

8. the occurrence of any event or the existence of any circumstance which would render any of the representations or warranties given by Beijing Sports untrue or inaccurate or misleading in any respect; and

9. all necessary consents and approval under the Listing Rules and other applicable laws and regulations in connection with the Subscription Agreement and the transactions contemplated thereunder having been obtained by the Company.

Beijing Sports shall procure satisfaction of all of the conditions precedent above (other than the condition precedent in paragraph (7) above) as soon as possible and in any event on or before the Long Stop Date.

The Company may in its discretion waive all or any of the conditions precedent above (other than the conditions precedent in paragraphs (1), (2), (4) and (7) above) at any time by notice in writing to Beijing Sports. In the event that any of the above conditions precedent is not fulfilled (or otherwise waived by the Company in writing where applicable) on or before the Long Stop Date, the Company may notify Beijing Sports in writing to terminate the Subscription Agreement with immediate effect, but:

1. certain surviving clauses in the Subscription Agreement will continue to have effect; and

2. the obligations of Beijing Sports accrued prior to such termination will not be affected.

COMPLETION

Subject to fulfillment or waiver by the Company (where applicable) of the conditions precedent of the Subscription Agreement, Subscription Completion will take place on the tenth Business Day after the day on which the last of the conditions precedent has been fulfilled (or waived by the Company, where applicable) or such other date as the parties to the Subscription Agreement may agree in writing.

On the date of Subscription Completion, the Company will arrange for payment of the consideration for the Subscription Shares to the account designated by Beijing Sports.