E-Malt.com News article: 3786

Hong Kong: The directors of China Resources Enterprise, Limited announced that the Company entered into a conditional acquisition agreement with China Resources Holdings and China Resources Company on 3rd December, 2004 for the acquisition from China Resources Holdings of its 100% equity interest in the BVI Companies for a total consideration of HK$660,300,000 which will be satisfied by the issue of 57,971,905 new shares (‘‘Consideration Shares’’) in the Company to China Resources Holdings. The BVI Companies have entered into separate conditional acquisition agreements on 3rd December, 2004 with the relevant member of the China Resources Company Group, whereby they will, on completion of such agreements, become the legal and beneficial owners of: (i) the 35% equity interest in the China Resources Vanguard Business, (ii) a related shareholders’ loan of RMB35,000,000 (equivalent to approximately HK$32.9 million); and (iii) the 11.5% equity interest in Suguo. Following the Acquisition, the China Resources Vanguard Business will be wholly owned by the Group and Suguo will be 85% owned by the Group with the remaining 15% being owned by Jiangsu Foodstuffs, an independent third party (save otherwise being a substantial shareholder of the Group by virtue of its 15% interest in Suguo). Based on the closing price of HK$11.5 of the Shares on the Stock Exchange on 3rd December, 2004, the Consideration Shares would have a total market value of approximately HK$666.7 million.

As China Resources Holdings is the controlling shareholder of the Company and China Resources Company is the controlling shareholder of China Resources Holdings, the Acquisition constitutes a connected transaction of the Company under the Listing Rules and requires independent shareholders’ approval at an extraordinary general meeting of the Company. An independent board committee of the Company has been formed to give recommendation to the independent shareholders in respect of the Acquisition. An independent financial adviser will also be appointed to advise the independent board committee.

The 73.5% interest in Suguo was acquired by the Group over a period of two years, firstly a 39.25% interest from Jiangsu Foodstuffs in November 2002, another 10% interest from an independent third party in September 2003, and completion of acquisition of another 24.25% interest from Jiangsu Foodstuffs in September 2004. The acquisition of the 24.25% interest was a connected transaction of the Company as announced by the Company on 1st June, 2004 at the time when the agreement for the same was signed. Where the Acquisition is to be aggregated with the connected transaction of the acquisition of the 24.25% interest in Suguo (as part of the series of connected transactions within a 12 month period), the Acquisition will also constitute a discloseable transaction of the Company. A circular containing, among other things, details of the Acquisition, advice of the independent financial adviser, recommendation of the independent board committee and notice convening an extraordinary general meeting to approve the Acquisition will be sent to shareholders of the Company as soon as practicable.

China Resources Vanguard Business is comprised of China Resources Vanguard Group and China Resources Wan Jia Group which are under the same management of China Resources Vanguard as the Group currently has 65% equity interest in each of China Resources Vanguard and China Resources Wan Jia. China Resources Vanguard Business is principally engaged in the operation of retail stores in the Guangdong province.


08 December, 2004