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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.



WHEELOCK AND COMPANY LIMITED

(Incorporated in Hong Kong with limited liability)

(Stock Code: 20)

Connected Transaction THE WHARF (HOLDINGS) LIMITED

(Incorporated in Hong Kong with limited liability)

(Stock Code: 4)

Connected & Discloseable Transactions


JOINT ANNOUNCEMENT


SALE AND PURCHASE OF THE ENTIRE ISSUED SHARE CAPITAL OF AGGRESSIVE ENTERPRISES, BEING THE INDIRECT OWNER OF THE COMMERCIAL PROPERTY LOCATED AT 3RD TO 24TH FLOORS, WHEELOCK HOUSE, CENTRAL, HONG KONG (PROPERTY A)


The respective Boards of Wheelock and Wharf are pleased to announce that on 14 March 2016, a wholly-owned subsidiary of Wharf entered into Agreement A to acquire from a wholly-owned subsidiary of Wheelock (i) the entire issued share capital of Aggressive Enterprises at a price of approximately HK$3,904 million in cash and (ii) the aggregate amount of shareholder's loans due by Aggressive Enterprises as at Completion Date (amounting to HK$1,116 million as at the date of Agreement A) on a dollar-for-dollar basis.


SALE AND PURCHASE OF THE ENTIRE ISSUED SHARE CAPITAL OF ESTCOURT, BEING THE INDIRECT OWNER OF THE COMMERCIAL PROPERTY LOCATED AT SHOP C, GROUND FLOOR, WHEELOCK HOUSE, CENTRAL, HONG KONG (PROPERTY B)


In addition, the respective Boards of Wheelock and Wharf are pleased to announce that on 14 March 2016, the same wholly-owned subsidiary of Wharf entered into Agreement B to acquire from a company effectively owned by Hon. Peter K. C. Woo and his spouse (i) the entire issued share capital of Estcourt at a price of approximately HK$904 million in cash and

  1. the aggregate amount of shareholder's loans due by Estcourt as at Completion Date (amounting to HK$237 million as at the date of Agreement B) on a dollar-for-dollar basis.


    REGULATORY ASPECTS


    In accordance with Chapter 14A of the Listing Rules, the Acquisition of Aggressive Enterprises constitutes a connected transaction for Wharf since Wheelock owns about 59% equity interest of Wharf and, given its value, is subject to reporting and announcement requirements by Wharf but exempt from the independent shareholders' approval requirement.


    In accordance with Chapter 14A of the Listing Rules, the Acquisition of Estcourt constitutes a connected transaction for both Wheelock and Wharf since Hon. Peter K. C. Woo is the past senior director of Wheelock and the past chairman of Wharf within the preceding 12 months and, given its value, is subject to reporting and announcement requirements by both Wheelock and Wharf but exempt from the independent shareholders' approval requirement.


    For Wharf, in accordance with Chapter 14 of the Listing Rules, the two transactions mentioned above together also constitute discloseable transactions and, given their aggregate value, are subject to reporting and announcement requirements by Wharf but exempt from the shareholders' approval requirement.


    REASONS FOR AND BENEFITS OF THE TRANSACTIONS


    Within the Wheelock Group, all major investment properties in Hong Kong are currently held through Wharf, with the exception of Property A. Upon completion of the Acquisition of Aggressive Enterprises, that exception will be eliminated. On the other hand, investment properties represent Wharf's core business and account for about three-quarters of Wharf's core earnings. These acquisitions offer Wharf a rare opportunity to acquire a prime and very visible Central property at a reasonable yield to expand Wharf's portfolio of investment properties in Hong Kong. The directors of Wheelock and Wharf believe these acquisitions will further the business strategy of both Wheelock and Wharf and are beneficial to both Wheelock and Wharf.


    AGREEMENT A


    Date : 14 March 2016


    Parties : 1. Wheelock Properties, the vendor, which is a wholly-owned subsidiary of Wheelock; and

    2. City State, the purchaser, which is a wholly-owned subsidiary of Wharf.


    Assets being acquired by Wharf Group

    : Wheelock Properties agrees to sell and City State agrees to purchase:


    1. The entire issued share capital of Aggressive Enterprises; and


    2. The aggregate amount of loans and net amounts due and owing by Aggressive Enterprises to Wheelock Properties as at Completion Date and, for information purpose only, such debt was in an aggregate sum of HK$1,116 million as at the date of Agreement A.


      Property A : The principal asset Aggressive Enterprises holds (through its

      wholly-owned subsidiary) is the 100% legal and beneficial interest in Property A. Details of Property A are as follows:

      1. Lot Number and Address, etc.:


        ALL Those 7,527 equal undivided 11,022nd parts or shares of and in Section A, Section C and the Remaining Portion of Marine Lot No. 99 and Section A, Section B and the Remaining Portion of Marine Lot No. 100 TOGETHER with the messuages erections and the buildings thereon now known as Wheelock House at 20 Pedder Street, Central, Hong Kong ("Wheelock House"), together with the right to hold use occupy and enjoy 3rd to 24th Floors of the building.


      2. Description:


      3. Wheelock House is a 25-storey (including a basement) commercial/office building completed in 1984.


        Property A comprises 21 consecutive office floors (except common areas) of the Building with a total gross area of approximately 18,572.37 sq. m. (199,913 sq. ft.).


        Consideration : The provisional consideration shall be an aggregate sum of

        HK$5,020 million, comprising the share consideration (subject to subsequent adjustments) amounting to HK$3,904 million and the debt consideration amounting to HK$1,116 million.


        The provisional consideration was determined after due negotiation (on an arm's length basis where practicable) between Wheelock Properties and City State with reference to and on the basis of (i) the pro-forma consolidated net asset value of Aggressive Enterprises and its subsidiary as at Completion Date; and (ii) the appraised value of Property A as at 11 March 2016 of HK$5,080 million valued by an independent professional valuer; and (iii) the aggregate amount of the debt in the amount of HK$1,116 million as at the date of Agreement A.


        Adjustments to the consideration

        : The Completion Accounts of Aggressive Enterprises will be prepared as at the Completion Date. In the event that the final consideration calculated with reference to the Completion Accounts of Aggressive Enterprises is different from the pre-adjusted consideration, either Wheelock Properties shall pay the difference of the amount to City State or City State shall pay the difference of the amount to Wheelock Properties (as the case may be) within 14 days of production of the Completion Accounts of Aggressive Enterprises.


        Payment terms : 5% of the provisional consideration shall be satisfied by City

        State by cash upon signing of Agreement A and the remaining balance (subject to any subsequent adjustments) shall be satisfied by City State by cash on Completion.

        Completion : Agreement A shall be completed on or before 31 May 2016. The Wharf Group will pay the consideration from internal resources and borrowings.

        Information on Aggressive Enterprises

        Aggressive Enterprises was incorporated under the laws of the British Virgin Islands. Wheelock Properties acquired the entire issued share capital of Aggressive Enterprises at par value of US$1 each at US$500 (being the original acquisition cost to Wheelock Properties). As at the date of Agreement A, Aggressive Enterprises, through its wholly-owned subsidiary, legally and beneficially owns Property A. Based on the information provided by Wheelock Properties, apart from the above, Aggressive Enterprises is not engaged in any business activities.


        The key financial information of Aggressive Enterprises based on the consolidated financial statements of Aggressive Enterprises for each of the two years ended 31 December 2014 and 2015 is set out below:


        For the year ended 31 December


        2014

        2015

        HK$

        HK$

        Profit before tax Profit after tax

        197 million

        179 million

        933 million

        912 million


        The pro-forma consolidated net asset value of Aggressive Enterprises as at Completion Date is expected to be HK$3,904 million.


        AGREEMENT B


        Date : 14 March 2016


        Parties : 1. Champion Honest, the vendor; and

        2. City State, the purchaser


        Assets being acquired : Champion Honest agrees to sell and City State agrees to

        purchase:


        1. The entire issued share capital of Estcourt; and


        2. The aggregate amount of loans and net amounts due and owing by Estcourt to Champion Honest as at Completion Date and, for information purpose only, such debt was in an aggregate sum of HK$237 million as at the date of Agreement B.


        Property B : The principal asset Estcourt holds (through its wholly-owned

        subsidiaries) is the 100% legal and beneficial interest in Property B. Details of Property B are as follows:

      The Wharf (Holdings) Ltd. issued this content on 14 March 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 14 March 2016 12:59:00 UTC

      Original Document: http://www.wharfholdings.com/file/160314 WAC WHL Joint e.pdf