Television Broadcasts : Discloseable Transaction in Relation to Disposal of the Remaining 47% Equity Interest in Liann Yee

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(Incorporated in Hong Kong with limited liability) Stock Code: 00511

DISCLOSEABLE TRANSACTION IN RELATION TO DISPOSAL OF THE REMAINING 47% EQUITY INTEREST IN LIANN YEE

Reference is made to the Previous Announcement in relation to the Previous Disposal of approximately 53% shareholding in Liann Yee by Countless and TVBI, both wholly-owned subsidiaries of the Company, to the Purchasers pursuant to a disposal agreement dated 29 January 2015. Subsequent to completion of the Previous Disposal on 6 May 2015, Countless holds approximately 47% of all issued shares of Liann Yee.

The Board announces that on 4 January 2016, Countless entered into the conditional Disposal Agreement with the Purchasers, pursuant to which Countless had agreed to conditionally sell the remaining 5,937,792 issued ordinary shares of Liann Yee, representing approximately 47% of the shareholding in Liann Yee, for a total consideration of NT$4,343,490,566 (representing approximately HK$1,029,624,439).

Upon Completion, the Group will cease to hold any interest in Liann Yee, but will continue to hold the Retained Properties.

As the applicable percentage ratios in respect of the Disposal, on standalone basis and when aggregated with the Previous Disposal, exceed 5% but are all less than 25%, the Disposal constitutes a discloseable transaction of the Company under the Listing Rules.

INTRODUCTION

Reference is made to the Previous Announcement in relation to the Previous Disposal of approximately 53% shareholding in Liann Yee by Countless and TVBI, both wholly-owned subsidiaries of the Company, to the Purchasers pursuant to a disposal agreement dated 29 January 2015. Subsequent to completion of the Previous Disposal on 6 May 2015, Countless holds approximately 47% of all issued shares of Liann Yee and TVBI ceased to be a shareholder of Liann Yee.

The Board announces that on 4 January 2016, Countless entered into the conditional Disposal Agreement with the Purchasers, the principal terms of which are summarised below.

THE DISPOSAL AGREEMENT

Date

4 January 2016

Parties and subject matter

Vendor :	Countless, to sell 5,937,792 issued ordinary shares of Liann Yee, representing approximately 47% of the shareholding in Liann Yee
Purchasers :	Li Mao, to purchase 1,516,032 shares of Liann Yee, representing approximately 12% of the shareholding in Liann Yee De En, to purchase 2,147,712 shares of Liann Yee, representing approximately 17% of the shareholding in Liann Yee Lien Xin, to purchase 2,274,048 shares of Liann Yee, representing approximately 18% of the shareholding in Liann Yee

To the best of the Directors' knowledge, information and belief and having made all reasonable enquiry, each of the Purchasers and their respective ultimate beneficial owners are third parties independent of the Group and are not connected persons of the Group.

Consideration and payment terms

The Consideration is the sum of NT$4,343,490,566 (representing approximately HK$1,029,624,439), comprising of NT$1,108,976,315 (approximately HK$262,882,836), NT$1,571,049,779 (approximately HK$372,417,350) and NT$1,663,464,472

(approximately HK$394,324,253), being the respective purchase price payable by each of Li Mao, De En and Lien Xin, less all applicable Taiwan securities transaction tax payable in relation to the transfer.

The Consideration shall be paid by each of the Purchasers to Countless in immediately available funds at Completion.

Notwithstanding the foregoing, in the event that the Approval Conditions have not been fulfilled on or before 5 February 2016, each of Li Mao, De En and Lien Xin will pay to Countless its respective deposit of NT$110,897,631 (approximately HK$26,288,283), NT$157,104,978 (approximately HK$37,241,735) and NT$166,346,447 (approximately HK$39,432,425) by 20 February 2016, with the balance of the Consideration paid to Countless at Completion.

Basis of Consideration

The Consideration was arrived at after arm's length negotiations between Countless and the Purchasers, taking into consideration the earnings position of the Liann Yee Group and the valuation comparables of similar disposals in the market as used in the Previous Disposal, and the share of transaction-related levies by the Purchasers.

Conditions precedent

Completion will be conditional upon, among others, the fulfilment or waiver (as the case may be) of certain conditions on or before the Long Stop Date, including the condition that the requisite regulatory approvals and any other approvals from the National Communications Commission of Taiwan, the Investment Commission of the Ministry of Economic Affairs of Taiwan and any government authority for the transactions contemplated under the Disposal Agreement having been obtained and remain in full force and effect.

Completion

Completion shall take place on the 5th business day after fulfillment or waiver (as the case may be) of the conditions precedent under the Disposal Agreement or such other date as Countless and the Purchasers may otherwise agree.

If Completion does not occur on or before the Long Stop Date, either Li Mao (on behalf of all the Purchasers) or Countless may terminate the Disposal Agreement by written notice. Immediately after and in any event not later than fourteen business days after the termination of the Disposal Agreement, Countless shall return the deposits (if paid) to the Purchasers in full without interests. Despite the aforesaid, in case where Completion did not occur due to any reason attributable to any one of the Purchasers' fault after fulfillment or waiver of the conditions precedent under the Disposal Agreement on or before the Long Stop Date, the deposits will be forfeited by Countless as damages for the Purchaser(s)' fault(s).

Following Completion, the Group will continue to lease the Retained Properties to the Liann Yee Group.

Termination of the Shareholders' Agreement

Upon Completion, Countless, the Purchasers and Liann Yee will enter into a termination agreement terminating the Shareholders' Agreement.

INFORMATION ON THE GROUP, THE PURCHASERS AND THE LIANN YEE GROUP

The Group is principally engaged in free-to-air terrestrial television broadcasting, programme production, digital new media, pay television programme services, magazine publishing, movie production and investment, and other broadcasting related activities in Hong Kong, and programme licensing and distribution, and pay television programme services in territories outside of Hong Kong.

Each of the Purchasers is principally engaged in business investment and investment holding.

Liann Yee operates various cable television channels, namely, TVBS, TVBS News and TVBS Entertainment in Taiwan. The Liann Yee Group is principally engaged in the business of television programmes production, television channel transmission and operation in Taiwan, and being the television operator for the TVBS channels in Taiwan.

The Group's 47% interest in Liann Yee as at 30 November 2015 was NT$3,755,578,232 (representing approximately HK$890,259,820*) as aligned with the Hong Kong Financial Reporting Standards, the accounting standards adopted by the Group.

Set out below is a summary of the net profit position of Liann Yee for the two years ended respectively 31 December 2013 and 31 December 2014, based on audited consolidated financial statements of Liann Yee, as aligned with the Hong Kong Financial Reporting Standards: -

For the year ended 31 December
2013	2014
Approximately NT$ (in HK$)	Approximately NT$ (in HK$)
Net profit before taxation	NT$942,945,241 (HK$245,932,377)*	NT$992,565,148 (HK$253,310,566)*
Adjusted net profit before taxation#	NT$886,212,044 (HK$231,135,622)*	NT$937,720,098 (HK$239,313,671)*
Net profit after taxation	NT$717,514,482 (HK$187,137,105)*	NT$752,222,196 (HK$191,973,122)*
Adjusted net profit after taxation#	NT$670,425,928 (HK$174,855,798 )*	NT$706,700,805 (HK$180,355,699)*

*For the purpose of illustration, amounts denominated in NT$ have been converted into HK$ at historical conversion rates of NT$=HK$0.260813 for the year ended 31 December 2013, NT$=HK$0.255208 for the year ended 31 December 2014, and NT$=HK$0.237050 for the balances at 30 November 2015.

# The above indicative adjusted net profit figures are provided for illustration taking into account the depreciation and rental expense on the Retained Properties as if the Reorganisation and the Distribution have been completed as at the commencement of the respective periods. "Reorganisation" and "Distribution" have the meanings as ascribed thereto in the Previous Announcement.