Hong Kong Television Network : MAJOR TRANSACTION - ACQUISITION OF ENTIRE SHARE CAPITAL OF THE TARGET COMPANY

If you are in any doubt about this circular or as to the action to be taken, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Hong Kong Television Network Limited, you should at once hand this circular to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

香港電視網絡有限公司

(Incorporated in Hong Kong with limited liability under the Companies Ordinance)

MAJOR TRANSACTION ACQUISITION OF

ENTIRE SHARE CAPITAL OF THE TARGET COMPANY

15 May 2017

Page

Definitions ....... ....... ........ ....... ....... ........ ....... ........ ....... ....... 1

Letter from the Board ... ........ ....... ....... ........ ....... ........ ....... ....... 3

1. Introduction .... ........ ....... ....... ........ ....... ........ ....... ....... 3

2. Principal Terms of the Agreement ..... ........ ....... ........ ....... ....... 3

1. Principal Terms of the Master Transition Services and License Agreement .... 5

2. Reasons for and Benefits of the Acquisition .... ....... ........ ....... ....... 5 5. Information of the Parties ...... ....... ........ ....... ........ ....... ....... 6 6. Financial Effects of the Acquisition . . . ........ ....... ........ ....... ....... 6 7. Listing Rules Implications ..... ....... ........ ....... ........ ....... ....... 6 8. Additional Information . . ....... ....... ........ ....... ........ ....... ....... 7

Appendix I - Financial Information of the Group . ....... ........ ....... ....... 8

Appendix II - Historical Financial Information of the Target Company 10

Appendix III - Management Discussion and Analysis of the Target Company 41

Appendix IV - Unaudited Pro Forma Financial Information of

the Enlarged Group 46

Appendix V - General Information 54

In this circular, the following expressions shall have the following meanings unless the context otherwise requires:

''Acquisition'' the acquisition of Sale Share as contemplated under the Agreement

''Agreement'' the conditional sale and purchase agreement dated 20 February 2017 entered into between the Vendor and the Purchaser in relation to the Acquisition

''Board'' the board of Directors

''Company'' Hong Kong Television Network Limited, a company incorporated in Hong Kong with limited liability

''Completion'' completion of the Acquisition in accordance with the terms and conditions of the Agreement

''Consideration'' the total consideration in the sum of US$0.671 million

(equivalent to approximately HK$5.21 million) (subject to adjustment for the net working capital as at the date of Completion upon preparation of the relevant accounts of the Target Company) payable by the Purchaser to the Vendor for the Acquisition as described under the Agreement

''Director(s)'' the director(s) of the Company

''Enlarged Group'' the Group and the Target Company upon Completion

''Gross Merchandise Value'' represents the total gross sales dollar value for merchandise

sold through a particular marketplace over a certain timeframe, before deduction of any discounts offered by the marketplace, rebate used and returns of merchandise sold

''Group'' the Company and its subsidiaries

''HKFRS'' Hong Kong Financial Reporting Standards which include all Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards and Interpretations, issued by the Hong Kong Institute of Certified Public Accountants

''HK$'' Hong Kong dollars, the lawful currency of Hong Kong

''Hong Kong'' the Hong Kong Special Administrative Region of the People's Republic of China

''Latest Practicable Date'' 12 May 2017, being the latest practicable date prior to the

printing of this circular for ascertaining certain information in this circular

''Listing Rules'' the Rules Governing the Listing of Securities on the Stock Exchange

''Master Transition Services and License Agreement''

the transition services agreement dated 3 March 2017 entered into between the Purchaser, the Target Company, and Groupon, Inc. on Completion

''Purchaser'' Talent Ascent Limited, a company incorporated in the British Virgin Islands with limited liability and a wholly- owned subsidiary of the Company

''Sale Share'' 200,000 ordinary shares in the share capital of the Target Company, being the entire issued share capital of the Target Company held by the Vendor

''Share(s)'' ordinary share(s) of the Company

''Shareholder(s)'' the registered holder(s) of the Share(s)

''Stock Exchange'' The Stock Exchange of Hong Kong Limited

''Target Company'' Shift Media Group Limited, a company incorporated in

Hong Kong with limited liability

''Transition Services'' collectively, the transition services set forth in or

contemplated by the Master Transition Services and License Agreement

''US$'' United States dollars, the lawful currency of the United States of America

''US GAAP'' Generally accepted accounting principles in effect in the United States

''Vendor'' Groupon, Inc., a company incorporated in Delaware, the United States of America, and publicly listed on the NASDAQ Global Select Market, and Groupon Holdings B.V., a company incorporated in the Netherlands, with limited liability and an indirect wholly-owned subsidiary of Groupon, Inc.

''%'' per cent.