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. This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the Shares. INTIME DEPARTMENT STORE (GROUP) COMPANY LIMITED (Incorporated in the Cayman Islands with limited liability) (Stock Code: 1833) DISCLOSEABLE TRANSACTION ACQUISITION OF 100% INTEREST IN SIN CHENG Sale and Purchase Agreement The Board announced that on 11 October 2010, (i) Intime HK, a wholly-owned subsidiary of the Company, (ii) Keson International; (iii) Henderson Land; and (iv) the Company entered into the Sale and Purchase Agreement pursuant to which Intime HK agreed to purchase and Keson International agreed to sell 100% equity interest in Sin Cheng, a wholly-owned subsidiary of Keson International, for a total consideration of HK$1,612,500,000. The total consideration will be satisfied by Intime HK procuring the Company to issue the Consideration Shares. Discloseable Transaction As some of the applicable percentage ratios are more than 5% but are less than 25%, the Acquisition constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. INTRODUCTION The Board announces that, on 11 October 2010, (i) Intime HK, a wholly-owned subsidiary of the Company, (ii) Keson International; (iii) Henderson Land; and (iv) the Company entered into the Sale and Purchase Agreement pursuant to which Intime HK agreed to purchase and Keson International agreed to sell 100% equity interest in Sin Cheng, a wholly-owned subsidiary of Keson International, for a total consideration of HK$1,612,500,000. - -
THE SALE AND PURCHASE AGREEMENT The principal terms of the Sale and Purchase Agreement are summarised as follows: Date: October 2010 Parties: (i) Intime HK (ii) Keson International (iii) Henderson Land (iv) the Company Subject matter: Consideration: Payment: Pursuant to the Sale and Purchase Agreement, Intime HK agreed to purchase and Keson International agreed to sell 1,200,000 shares of Sin Cheng of SG$1 each, representing 100% issued share capital of Sin Cheng. The Consideration is HK$1,612,500,000, which shall be subject to adjustment as mentioned below. Provided that the Audited Accounts are available on or before 31 December 2010, (i) if the Audited Valuation according to the Audited Accounts is not lower than 95% of the Consideration, no adjustment will be made and the Consideration shall remain as HK$1,612,500,000; and (ii) if the Audited Valuation according to the Audited Accounts is lower than 95% of the Consideration, the consideration for the Acquisition shall be adjusted so that the final Consideration will be equal to the Audited Valuation. Pursuant to the Sale and Purchase Agreement, the total consideration shall be satisfied by way of Intime HK procuring the Company to issue the Consideration Shares, being 147,664,835 new Shares upon Completion (subject to adjustment of the Consideration as set out above). Assuming no new Shares will be issued from the date hereof to the date of issuance of the Consideration Shares, the Consideration Shares represent (i) approximately 8.38% of total number of issued share capital of the Company immediately prior to the issue of the Consideration Shares; and (ii) approximately 7.74% of the enlarged issued share capital of the Company as enlarged by the issuance of the Consideration Shares. The Consideration Shares will be issued pursuant to the general mandate to issue Shares approved by Shareholders at the annual general meeting of the Company held on 7 June 2010. Upon issuance, the Consideration Shares will rank pari passu with the all existing Shares. An application will be made for the listing of and permission to deal in the Consideration Shares on the Stock Exchange. - 2 -
The Consideration was determined based on arm s length negotiation between the parties thereto taking into account, among other things, the estimated market value of the department store operations of Beijing Youyi Lufthansa and the attributable interest thereof held by Sin Cheng, the total assets and future growth potential of Beijing Youyi Lufthansa and that of Sin Cheng, with reference to the historical net profits of Sin Cheng and Beijing Youyi Lufthansa. Conditions Precedent: The obligations of the parties hereto to effect completion of the sale and purchase of the equity interest shall be conditional upon, among others, the following: (i) (ii) the transaction pursuant to the Sale and Purchase Agreement complying with relevant Listing Rules requirements and all other applicable law and regulations (including but not limited to all necessary approvals required under the Listing Rules and the memorandum and articles of associations of Intime HK and the Company); all subsidiaries of the Target Group having complied with the applicable law and regulations in their ordinary course of business and there being no material adverse change in the Target Group s business; (iii) Intime HK obtaining all necessary approvals for the Acquisition pursuant to the Sale and Purchase Agreement and in compliance with all applicable law and regulations; and (iv) Keson International and Sin Cheng having obtained all necessary authorisations to execute and approve the Sale and Purchase Agreement respectively. Intime HK may waive any of the above conditions other than condition (i). Keson International shall provide all necessary assistances to Intime HK to procure the fulfilment of condition (i). If the above conditions are not fulfilled or waived on or before 30 June 2011, the Acquisition will not proceed and the Sale and Purchase Agreement shall be terminated. Completion: Completion of the Sale and Purchase Agreement shall take place on the fifth business day after satisfaction (or waiver) of all conditions set out in the paragraph headed Conditions Precedent above. - 3 -
At completion, Keson International shall deliver to Intime HK the share certificates of the equity interest of Sin Cheng to be purchased by Intime HK and all other corporate documents requested by Intime HK. Intime HK shall deliver to Keson International the share certificates of the Consideration Shares. Appointment of Non-executive Director: Keson International shall be entitled to nominate Mr. Lee Ka Kit as a non-executive Director candidate of the Company upon completion of the Acquisition. REASONS FOR AND BENEFITS OF THE ACQUISITION The Group has been actively identifying opportunities to acquire attractive department store assets. The Directors intend to further strength the Group s national geographical coverage of department store network in order to further enhance its competitiveness and consider that the Acquisition represents a good opportunity to expand the Group s operations in northern China. Beijing Youyi Lufthansa, in which Sin Cheng owns 50% equity interest, currently operates and owns three department stores in Beijing, a prominent retail market in China and one department store in Taiyuan, Shanxi Province, a relatively new market which has significant growth potential. The Directors are optimistic about the development potential of Beijing Youyi Lufthansa and believe that the Acquisition will enhance the Group s overall competitiveness in the long run. The Directors, including the independent non-executive Directors, consider that the terms of the Sale and Purchase Agreement are on normal commercial terms and the Acquisition thereunder is fair and reasonable and in the interests of the Shareholders as a whole. Upon completion of the Acquisition, Sin Cheng will become a wholly-owned subsidiary of the Company, and Beijing Youyi Lufthansa, in which Sin Cheng has 50% equity interest, will be accounted for as a jointly-controlled entity or as an associate of the Group. INFORMATION ON SIN CHENG AND Beijing Youyi Lufthansa Sin Cheng is a limited liability company incorporated in Singapore and owns 50% equity interest of Beijing Youyi Lufthansa. Beijing Youyi Lufthansa is a limited company established in the PRC which is primarily engaged in the operations and management of department stores in the PRC. - 4 -
For the two financial years ended 31 December 2009, the audited net profits of Sin Cheng before and after tax are as follows: For the financial year ended 31 December Net profit SG$ 2008 (a) before tax: 14,921,416 (b) after tax: 14,748,372 2009 (a) before tax: 14,268,533 INFORMATION ON INTIME HK AND THE GROUP (b) after tax: 12,607,202 Intime HK is a company incorporated in Hong Kong and a wholly-owned subsidiary of the Company. It is primarily engaged in investment holding. The Group is principally engaged in the business of operation and management of department stores in the PRC. The Group is the largest department store chain in Zhejiang province in terms of sales. INFORMATION ON KESON INTERNATIONAL AND HENDERSON LAND Keson International is a limited liability company incorporated in Hong Kong which is an indirect wholly-owed subsidiary of Henderson Land. Keson International is principally engaged in investment holding. Henderson Land is a limited liability company incorporated in Hong Kong, the shares of which are listed on the Stock Exchange. It is an investment holding company and the principal activities of its subsidiaries are property development and investment, construction, infrastructure, hotel operation, finance, department store operation, project management, investment holding and property management. To the best of the Directors knowledge, information and belief having made all reasonable enquiry, Keson International, Henderson Land and their respective ultimate beneficial owners are Independent Third Parties. LISTING RULES IMPLICATIONS As some of the applicable percentage ratios are more than 5% but are less than 25%, the Acquisition constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules and is only subject to the reporting and announcement requirements set out in Rules 14.34 to 14.38 under the Listing Rules. - 5 -
DEFINITIONS In this announcement, the following expressions shall have the following meanings unless the context requires otherwise: Acquisition Audited Accounts Audited Valuation Beijing Youyi Lufthansa Board Company Consideration Consideration Shares Director(s) Group Henderson Land the acquisition of 100% equity interest of Sin Cheng by Intime HK pursuant to the Sale and Purchase Agreement the audited accounts of the Target Group for the period from 1 July 2007 to 30 June 2010 the agreed valuation of the Target Group, being an amount equals to 50% of the audited net profit of the Target Group for the period from 1 July 2009 to 30 June 2010 as shown in the Audited Accounts multiplied by 15 times (Beijing Youyi Lufthansa Shopping City Co. Ltd. Beijing Lufthansa Centre), a limited company established in the PRC which is held by Sin Cheng and (Beijing Youyi Shangye Fuwu Co.) as to 50% each the board of Directors Intime Department Store (Group) Company Limited, a limited liability company incorporated in the Cayman Islands, the shares of which are listed on the Stock Exchange HK$1,612,500,000, being the consideration tentatively agreed among the parties to the Sale and Purchase Agreement and which is subject to adjustment pursuant to the terms thereof 47,664,835 new Shares to be issued as the consideration of the Acquisition the director(s) of the Company the Company and its subsidiaries Henderson Land Development Company Limited, a limited liability company incorporated in Hong Kong, the shares of which are listed on the Stock Exchange. Henderson Land is an Independent Third Party - 6 -
HK$ Independent Third Party(ies) Intime HK Keson International Listing Rules PRC Sale and Purchase Agreement SG$ Shareholder(s) Sin Cheng Stock Exchange Target Group Hong Kong dollars, the lawful currency of Hong Kong third party(ies) that is(are) independent of the Company and connected persons (as defined under the Listing Rules) of the Company Intime Department Store (Hong Kong) Company Limited, a limited liability company incorporated in Hong Kong and a wholly-owned subsidiary of the Company Keson International Limited, a limited liability company incorporated in Hong Kong and an Independent Third Party. Keson International is an indirect wholly-owned subsidiary of Henderson Land the Rules Governing the Listing of Securities on the Stock Exchange the People s Republic of China the sale and purchase agreement dated 11 October 2010 and entered into among Intime HK, Keson International, Henderson Land and the Company Singapore dollars, the lawful currency of Singapore the shareholder(s) of the Company Sin Cheng Holdings PTE Ltd, a limited liability company incorporated in Singapore and a wholly-owned subsidiary of Keson International The Stock Exchange of Hong Kong Limited Sin Cheng, its subsidiaries and entities which Sin Cheng jointly controls, including Beijing Youyi Lufthansa % per cent By Order of the Board Intime Department Store (Group) Company Limited Shen Guojun Chairman Beijing, 11 October 2010-7 -
As at the date of this announcement, the executive Directors of the Company are Mr. Shen Guojun and Mr. Ching Siu Leung, the non-executive Directors of the Company are Mr. Xin Xiangdong and Mr. Li Hui, David, and the independent non-executive Directors of the Company are Mr. Yu Ning, Mr. Chow Joseph and Mr. Shi Chungui. - 8 -