Emperor International : Discloseable Transaction - Acquisition of Entire Interest in the Target Company

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(Incorporated in Bermuda with limited liability)

(Stock Code: 163) DISCLOSEABLE TRANSACTION ACQUISITION OF ENTIRE INTEREST IN THE TARGET COMPANY

The Board is pleased to announce that on 10 January 2017, the Purchaser, an indirect wholly- owned subsidiary of the Company, entered into the Agreement for Sale and Purchase with the Vendor, being an Independent Third Party, in relation to the sale and purchase of the Sale Shares and the Sale Loan at a total consideration of HK$515,000,000, subject to adjustment with reference to the net value of the consolidated current assets and all the consolidated liabilities (except the Sale Loan) of the Target Company as at Completion Date.

The Sale Shares represent the entire equity interest in the Target Company. The principal asset of the Target Group is the Properties, being 12 retail shops located at G/F and LG/F, Fairview Height, No.1 Seymour Road, Hong Kong with a total gross floor area of approximately 13,173 sq. ft.

As one of the applicable percentage ratios in respect of the Acquisition is more than 5% but less than 25%, the Acquisition constitutes a discloseable transaction for the Company and is subject to the announcement requirement but is exempt from the Shareholders' approval requirement under Chapter 14 of the Listing Rules.

INTRODUCTION

The Board is pleased to announce that on 10 January 2017, the Purchaser, an indirect wholly- owned subsidiary of the Company, entered into the Agreement for Sale and Purchase with the Vendor, being an Independent Third Party, in relation to the sale and purchase of the Sale Shares and the Sale Loan at a total consideration of HK$515,000,000, subject to adjustment with reference to the net value of the consolidated current assets and all the consolidated liabilities (except the Sale Loan) of the Target Company as at the Completion Date.

THE AGREEMENT FOR SALE AND PURCHASE DATED 10 JANUARY 2017 Parties

Vendor: Henderson Land Development Company Limited, a company incorporated in the Hong Kong with limited liability. The Vendor is an investment holding company.

To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, the Vendor and its ultimate beneficial owners are Independent Third Parties.

Purchaser: New Prominent Limited, an indirect wholly-owned subsidiary of the Company.

Asset to be acquired

The assets to be acquired by the Purchaser comprise the Sale Shares and the Sale Loan. The Sale Shares represent the entire equity interest in the Target Company.

The Sale Loan represents all the loans owing by the Target Group to the Vendor as at the Completion Date.

The principal asset of the Target Group is the Properties, details of which are set out in the paragraph headed "Information of the Target Company" below.

Information of the Target Company

The Target Company is a property and investment holding company incorporated in Hong Kong with limited liability and with its total issued and fully paid up shares of 1,000 ordinary shares beneficially owned by the Vendor. Gesund is a property holding company incorporated in Hong Kong with limited liability and with its total issued and fully paid up shares of 2 ordinary shares held by the Target Company. The Target Company and Gesund legally and beneficially co-own the Properties as to 64.58% and 35.42% respectively. As at the date of this announcement, the Target Group has no other business operation other than holding the Properties.

The Properties are 12 retail shops located at G/F and LG/F, Fairview Height, No. 1 Seymour Road, Hong Kong, with a total gross floor area of approximately 13,173 sq. ft. The Properties are held by the Target Group as investment properties for rental purpose.

Based on the financial information provided by the Vendor, the unaudited consolidated total asset value and unaudited consolidated net asset value of the Target Company as at 30 November 2016 were approximately HK$407,778,000 and HK$292,209,000 respectively.

The financial information of the Target Company and Gesund for the 11 months ended 30 November 2016 and for the two years ended 31 December 2015 and 31 December 2014 is set out below:

For the 11 months ended		For the year ended			For the year ended
30 November 2016		31 December 2015			31 December 2014
Target Company	Gesund	Target Company	Gesund	Target Company	Gesund
(Unaudited)	(Unaudited)	(Audited)	(Audited)	(Audited)	(Audited)
HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000
Revenue	10,385	5,777	12,234	5,756	21,244	6,403
Net profit before taxation	12,442	6,259	12,022	4,522	33,277	11,880
Net profit after taxation	10,925	5,524	10,585	3,906	31,650	11,156

Consideration and payment terms

The total consideration for the Acquisition is HK$515,000,000, subject to adjustment by adding the consolidated current assets of the Target Company and deducting all consolidated liabilities (excluding the Sale Loan) of the Target Company as at the Completion Date, which has been determined after arm's length negotiations between the parties and with reference to the prevailing market value of similar properties in the same area in Hong Kong Island.

According to the Agreement for Sale and Purchase, the consideration for the Acquisition has been / shall be paid to the Vendor in the following manner :-

1. an initial deposit of HK$51,500,000 has been paid by the Purchaser upon signing of the Agreement for Sale and Purchase;

2. a further deposit of HK$51,500,000 shall be payable by the Purchaser on or before 10 February 2017; and

3. the remaining balance shall be payable by the Purchaser upon Completion. The consideration for the Acquisition is financed by internal resources of the Group. Completion

Pursuant to the Agreement for Sale and Purchase, the Completion shall take place on 10 July 2017 before 12:00 noon or such other date and time as may be agreed in writing between the Vendor and the Purchaser.

At Completion, the Vendor shall transfer and assign to the Purchaser the Sale Shares and the Sale Loan respectively, both free from encumbrances. Upon Completion, the Target Company

and Gesund will be wholly-owned by the Purchaser and become indirect wholly-owned subsidiaries of the Company.

Shareholding and corporate structure of the Target Group

Set out below is the shareholding and corporate structure of the Target Group immediately before and after the Completion:

Immediately before Completion Immediately after Completion

Vendor

Purchaser

100%

100%

Target Company

Target Company

100%

100%

Gesund

64.58%

Gesund

64.58%

35.42%

35.42%

Properties

Properties

REASONS FOR THE ACQUISITION

The Company is an investment holding company and its subsidiaries are principally engaged in property investments, property development and hospitality in the Greater China and overseas. The Purchaser is an indirect wholly-owned subsidiary of the Company and principally engaged in investment holding.

The Properties are located at Mid-Levels, a traditional luxury residential area on Hong Kong Island. Leasing demand for shops at traditional luxury residential area stays strong as the purchasing power of residents in luxury residential area is resilient and the supply of retail spaces in Mid-Levels is limited. The Acquisition has once again demonstrated the Group's ambition to enhance the proportion of commercial shops among the property investment portfolio. Riding on the ideal location of the Properties, the Board is confident with its rental return and capital appreciation potential in the long-run.

The Board considers that the terms and conditions for the Acquisition are on normal commercial terms, which are fair and reasonable and in the interest of the Company and its Shareholders as a whole.