MAXNERVA TECHNOLOGY SERVICES LIMITED --- HUATAI FINANCIAL HOLDINGS (HONG KONG) LIMITED
2 November 2015
To the Share Offer Shareholders
Dear Sir or Madam,
INTRODUCTION
On 7 August 2015, the Company and the Offeror jointly announced, among other things , that:
on 29 Apri l 2015 , the Selling Shareholders and the Offeror entered into the Sale and Purchase A greement, pur suant to which the Selling Shareholders conditionally agreed to sell or procure the sale of the Sale Shar es (being an aggregate of 241 ,221,529 Shares) as (direct or indirec t) beneficial owners , and the Offeror conditionally agreed to acquire, the Sale Shares at a consideration of HK$1.144 per Sale Share ; and
on 29 Apr il 20 15 , th e C ompany and t he Subsc riber s enter ed into t he Subscription Agreements pursuant to which the Company conditionally agreed to issue, and the Subscribers conditionally agreed to subscribe , in cash, for a total of 225,000 ,000 new Shares at the Subscr iption Price of HK$1.144 per Share for an aggregate consideration of approximately HK$257.4 million.
The Sale and Purchase Completion and the Subscription Completion took place on
29 October 2015 and were announced on the same date by the Company. The Offeror and parties ac ting in concert with it became the owner of 466 ,221 ,529 Shares or 70.40% of the enlarged share capital of the Company and, accordingly, the Offeror is required to make the Share Offer for all the issued Shares (other than those already owned or agreed to be acquired by the Offeror and parties acting in concert with it) under Rule 26.1 of the Takeovers Code. Huatai, on behalf of the Offeror , is making the Share Offer .
This letter forms part of this Composite Document which sets out, among other things, the principal terms of the Share Offer, the information on the Offeror and the Offeror's intention on the Company. Further details of the Share Offer are also set out in Appendix
I to this Composite Document and the accompanying Form of Acceptance. Your attention is also drawn to the 'Letter from the Board', the 'Letter from the Independent Board Committee ' containing its recommendation to the Share Offer Shareholders in respect of the Share Offer, and the 'Letter from the Independent Financial Adviser ' containing its recommendation to the Independent Board Committee in respect of the Share Offer in this Composite Document.
THE SHARE OFFER
Principal terms of the Share Offer
Huatai, on behalf of the Offeror , is making the Share Offer for all issued Shares (other than those already owned or agreed to be acquired by the Offeror and parties acting in concert with it) on the follow ing basis:
For each Offer Share . . . . HK$1.144 in cash The Share Offer Price is the same as the purchase price per Sale Share under the
Share and Purchase Agreement.
The Shar e Offer will be unconditional in all respects and will not be conditional upon acceptances being received in respec t of a minimum number of Shares or any other conditions.
The Shares to be acquired under the Share Offer will be fully paid, free from all liens , charges and encumbrances.
Value of the Share Offer
As at the Latest Practicable Date, there were 662,239,448 Shares in issue and there were no outstanding options , warra nts, derivatives or convertibles which may confer any rights to the holder(s) thereof to subscribe for , convert or exchange into Shares.
Based on the Share Offer Price of HK$1.144 per Offer Share and 662 ,239,448 Shares in issue as at the Latest Practicable Date, the entire issued share capital of the Company is valued at approximately HK$757.6 million.
A s the Offeror and par t ies acting in concert with it own 466 ,221 ,529 Shares immediately after the Share and Purchase Completion and the Subscr iption Completion, the total number of issued Shares subject to the Share Offer will be 196,017 ,919 Shares.
In the event that the Share Offer is accepted in full , the maximum aggregate amount payable by the Offeror under the Share Offer w ill be approximately HK$224 .2 million.
The Share Offer Price of HK$1.144 per Offer Share represent s:
a discount of approximately 74.12 % to the closing price of the Shares of HK$4.42 per Share as quoted on the Stock Exchange on the Last Trading Day;
a discount of approx imately 72.70% to the ex-dividend closing price of HK$4 . 19 per Share as quoted on the Stock Exchange on the Last Trading Day after taking into account the Special Dividend of HK$0.23 per Share declared;
a discount of approx imately 71.11% to the average closing price of the Shares of approximately HK$3 .96 per Share for the last 5 consecutive Trading Days up to and including the Last Trading Day;
a discount of approximately 69.33% to the ex- dividend average closing price of approximately HK$3.73 per Share for the last 5 consecutive Trading Days up to and including the Last Trading Day after taking into account the Special Dividend of HK$0.23 per Share declared;
a discount of approximately 69.74% to the average closing price of the Shares of approximately HK$3.78 per Share for the last 10 consecutive Tr ading Days up to and including the Last Trading Day;
a discount of approximately 67.77 % to the ex-dividend average closing price of approximately HK$3.55 per Share for the last 10 consecutive Trading Days up to and including the Last Trading Day after taking into account the Spec ial Dividend of HK$0.23 per Share declared;
a discount of approximate ly 54.42% to the average closing price of the Shares of approximately HK$2.51 per Share for the last 30 consecutive Trading Days up to and including the Last Trading Day;
a discount of approximately 49.82% to the ex-div idend average closing price of approximately HK$2 .28 per Share for the last 30 consecutive Trading Days up to and including the Last Trading Day after taking into account the Special Dividend of HK$0.23 per Share declared;
a discount of approx imately 13.33% to the closing price of the Shares of approximately HK$1.32 per Share on the MOU Date;
a premium of approximately 4.95% over the ex-div idend closing pr ice of HK$1.09 per Share on the MOU Date after taking into account the Special Dividend of HK$0.23 per Share declared;
a discount of approxima tely 70.29% to the closing price of the Shares of approximately HK$3.85 per Share on the Latest Practicable Date;
a discount of approximately 68.40% to the ex-dividend closing price of HK$3.62 per Share on the Latest Practicable Date after taking into account the Special Dividend of HK$0.23 per Share declared ;
a premium of approx imately 308.57% over the audited net asse t value attributable to equity holder s as at 31 March 2015 of approximately HK$0.28 per Share based on 662,239,448 Shares in issue as at the Latest Practicable Date; and
a premium of appr oximate ly 2, 188.00% over the audited net asset value attributable to equity holders as at 31 March 20 15 of approximately HK$0.05 per Share (based on the audited net asset value attributable to equity holders of approximately HK$186.3 million as at 31 March 2015 and 662, 239,448 Shares in issue as at the Latest Practicable Date) after deduc ting the Special Dividend of HK$0.23 per Share declared.
During the six-month period preceding the date of the MOU Announcement and the period up to and including the Latest Practicable Date:
the highest closing price of the Shares as quoted on the Stock Exchange was HK$4.75 on 28 April 2015 ; and
the lowest closing price of the Shares as quoted on the Stock Exchange was HK$0.66 on 12 August 2014.
Payment in cash in respec t of acceptances of the Share Offer will be made as soon as possible but in any event w ithin seven (7) Business Days after the date on which the duly completed acceptances of the Share Offer and the relevant documents of title in respect of such acceptances are received by the Of feror or its agent to render each such acceptance complete and valid and in accordance wit h Note 1 to Rule 30.2 of the Takeovers Code.
The Offeror does not intend to avail itself of any powers of compulsory acquisition of any Shares outstanding after the c lose of the Share Offer.
The Share Of fer is uncondit ional. By accepting the Share Of fer , the Share Of fer Shareholders will sell their Shares to the Offeror free f rom all encumbrances whatsoever and together with all rights accruing or attaching to them including , without limitation, the right to receive dividends and distributions (but excluding the Special Dividend) recommended , declared, made or paid, if any, on or af ter the date on which the Share Offer is made. Share Offer Shareholders should note that acceptance of the Share Offer would not have impact on their entitlement to the Special Dividend if they appeared as the registered Shareholders as at the Record Date.
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