TIDMETC
RNS Number : 9793M
Kuoni Travel Holding Limited
02 June 2010
FOR IMMEDIATE RELEASE
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS IN THAT JURISDICTION
2 June 2010
RECOMMENDED CASH ACQUISITION OF ET-CHINA.COM INTERNATIONAL
HOLDINGS LIMITED
BY KUONI TRAVEL HOLDING LTD
Summary
· The board of Kuoni Travel Holding Ltd. ("Kuoni") and the Independent
Directors of Et-china.com International Holdings Limited ("Et-china" or the
"Company") are pleased to announce that they have reached agreement on the terms
of a recommended proposal whereby Kuoni will acquire, for cash, all the issued
and to be issued ordinary shares in Et-china not already owned by Kuoni (the
"Proposal"). It is intended that the Proposal will be implemented by way of a
scheme of arrangement under Part 18A of the Jersey Law.
· Under the terms of the Proposal, Scheme Shareholders will receive 115
pence in cash for each Et-china Share valuing the entire issued ordinary share
capital of Et-china at approximately GBP40 million and the entire issued and to
be issued ordinary share capital at approximately GBP56 million. The Offer Price
represents a premium of approximately 219.4 per cent. to the Closing Price of
36.0 pence per Et-china Share on 1 June 2010, being the latest practicable
Business Day prior to the date of this announcement.
· Kuoni currently holds just under 33.0 per cent. of Et-china's entire
issued share capital and GBP500,000 in aggregate principal amount of the
Et-china Convertible Bonds.
· As Maria Ng is an employee of the Kuoni Group as well as being an
Et-china Director, she has absented herself from all deliberations of the board
of Et-china in connection with the Proposal. Accordingly, the Proposal has been
considered only by the Independent Directors.
· The Independent Directors of Et-china, who have been advised by Macquarie
(in its capacity as financial adviser to Et-china), consider the terms of the
Proposal to be fair from a financial point of view to the Et-china Shareholders.
In providing its advice to the Independent Directors, Macquarie has taken into
account the commercial assessments of the Independent Directors.
· Accordingly, the Independent Directors of Et-china intend unanimously to
recommend that Et-china Shareholders vote in favour of the Scheme to be proposed
at the Court Meeting and to vote in favour of the Resolutions to be proposed at
the Extraordinary General Meeting (or, in the event that the Proposal is
implemented by way of a Takeover Offer, to accept or procure acceptance of such
offer) as the Independent Directors have irrevocably undertaken to do in respect
of their own beneficial holdings (and, where applicable, those of their
connected persons) totalling 5,465,680 Et-china Shares, representing, in
aggregate, approximately 15.6 per cent. of the entire issued ordinary share
capital of Et-china. These undertakings remain binding in the event of a
Competing Proposal being made for Et-china.
· In addition, Kuoni has received an irrevocable undertaking from one other
Et-china Shareholder (Mintpine, an Australian company which holds Et-china
Shares on trust for certain individuals and other entities), to vote in favour
of the Scheme to be proposed at the Court Meeting and to vote in favour of the
Resolutions to be proposed at the Extraordinary General Meeting (or, in the
event that the Proposal is implemented by way of a Takeover Offer, to accept or
procure acceptance of such offer). Mintpine's irrevocable undertaking relates to
10,177,983 Et-china Shares, representing, in aggregate, approximately 29.1 per
cent. of the entire issued ordinary share capital of Et-china (of which
4,638,836 Et-china Shares in aggregate are held by Mintpine on trust for
Independent Directors of Et-china (and/or their family trusts), all of which are
also covered by the directors' irrevocable undertakings). This undertaking
remains binding in the event of a Competing Proposal being made for Et-china.
· Accordingly, Kuoni has received, in aggregate, irrevocable undertakings
from certain Et-china Shareholders to vote in favour of the Scheme to be
proposed at the Court Meeting and to vote in favour of the Resolutions to be
proposed at the Extraordinary General Meeting (or, in the event that the
Proposal is implemented by way of a Takeover Offer, to accept or procure
acceptance of such offer) in respect of 11,004,827 Et-china Shares,
representing, in aggregate, approximately 31.5 per cent. of the entire issued
ordinary share capital of Et-china. Further details of these irrevocable
undertakings are set out in Appendix 3 to this announcement.
· Et-china was listed on AIM in August 2007, and is primarily engaged in
the provision of travel related services including air-ticketing, train
ticketing, hotel reservation, provision of package tour services, conference
services and other related services as well as property development in the PRC.
Since 2006, Et-china subscribed for or acquired or contracted to acquire a total
of 54.43 per cent. of GZL, one of the largest group leisure travel companies in
South China.
· Since its listing on AIM, Et-china has consistently applied its strategy
set out at that time which has resulted in growth in market share and revenue.
· Kuoni is one of the world's leading globally-active leisure travel
organisations. The group is headquartered in Zurich, Switzerland and has branch
operations in over 40 countries in Europe, Asia, Africa, Australia and North
America with a worldwide workforce in excess of 9,070 employees. Kuoni is listed
on the Swiss Stock Exchange with a market capitalisation as at 1 June 2010 of
approximately CHF 933 million.
Commenting on the Proposal, Peter Rothwell, CEO of Kuoni, said:
"In acquiring our equity holding in Et-china in 2009, we began writing a new
chapter in Kuoni's corporate history and took our first step into this key
market of tomorrow. We are convinced that our activities in one of the fastest
growing travel and tourism regions have vast potential; and we are equally
convinced that Et-china can make a substantial contribution to the further
development of the Kuoni Group and in our positioning as a key player in China.
That's why this proposed acquisition is a major strategic step forward in the
international development of our company and for this long-term partnership with
one of China's leading travel corporations."
Commenting on the Proposal, Matthew Ng, CEO of Et-china, said:
"I am delighted that we have come to an agreement for Et-china to become part of
Kuoni's global operations. This transaction will mark another significant
milestone for the company since its inception some 10 years ago. Under Kuoni's
ownership, the company will be in a much stronger position to take advantage of
China's growing tourism market by leveraging Kuoni's 100 plus years of
experience and expertise in the global travel industry, especially in the
premium travel sector. This is particularly important as unlike other parts of
the world, the Chinese travel sector has registered growth over the last 12
months, inline with the increasing likelihood of the affluent population
travelling abroad.
I am confident that the company will develop faster and stronger under Kuoni's
ownership, which should give us real advantages against our domestic competitors
in branding, product knowledge and product offering as a result of being part of
a global travel powerhouse. The management team is looking forward to learning
from and becoming an integral part of one of the world's leading tour operators.
As the founding CEO of the company, I would like to take this opportunity to
thank all of the shareholders and bondholders for their past and continued
support of the company, particularly through some of the more challenging years.
We are pleased to deliver this result to our shareholders as the offer price
represents a significant premium to the current share price."
+--------------------------------------------+---------------------+
| Enquiries: | |
+--------------------------------------------+---------------------+
| Kuoni Travel Holding Ltd. | |
| Max Katz, Chief Financial Officer | Tel: +41 (0)44 |
| Laurence Bienz, Head Investor Relations | 277 4444 |
+--------------------------------------------+---------------------+
| Credit Suisse (financial adviser to Kuoni | |
| Travel Holding Ltd.) | |
| Jens Haas | Tel: +44 (0)20 |
| Angus Dickson | 7888 8888 |
+--------------------------------------------+---------------------+
| Et-china.com International Holdings | |
| Limited | Tel: +86 (0)20 |
| Matthew Ng | 3879 5531 |
+--------------------------------------------+---------------------+
| Seymour Pierce (Nominated adviser and | |
| corporate broker to Et-china) | |
| Mark Percy | Tel: +44 (0)20 |
| Catherine Leftley | 7107 8000 |
+--------------------------------------------+---------------------+
As Et-china's place of central management and control is outside the UK and
Et-china's shares are not traded on a UK regulated market, the Takeover Panel
has ruled that it does not have jurisdiction over the Proposal and, accordingly,
the Takeover Code does not apply to the Proposal.
This summary should be read in conjunction with the full text of the following
announcement and the Appendices. The Proposal will be subject to the Conditions
and further terms set out in Appendix 1 to this announcement and to the full
terms and Conditions to be set out in the Scheme Document and the Forms of
Proxy, when issued. Appendix 2 to this announcement contains source notes
relating to certain information contained in this announcement. Appendix 3 to
this announcement provides the details of the irrevocable undertakings received
by Kuoni. Certain terms used in this announcement are defined in Appendix 4 to
this announcement.
This announcement is not intended to and does not constitute or form part of any
offer to sell or subscribe for or any invitation to purchase or subscribe for
any securities or the solicitation of any vote or approval in any jurisdiction
pursuant to the Proposal or otherwise. The Proposal will be made solely by means
of the Scheme Document, which will contain the full terms and conditions of the
Proposal, including details of how to vote in favour of the Scheme. Any response
in relation to the Proposal should be made only on the basis of the information
in the Scheme Document or any document by which the Proposal is made. Et-china
will prepare the Scheme Document to be distributed to the Et-china Shareholders.
Et-china and Kuoni urge Et-china Shareholders to read the Scheme Document when
it becomes available because it will contain important information relating to
the Proposal.
Macquarie Capital (Hong Kong) Limited and Macquarie Capital (Europe) Limited
(together, "Macquarie") are members of the Macquarie Capital Group Limited group
of companies. Macquarie is acting exclusively as financial advisor to Et-china
and no-one else in connection with the Proposal and will not be responsible to
anyone other than Et-china for providing the protections afforded to clients of
Macquarie or for providing advice in relation to the Proposal. Macquarie Capital
(Europe) Limited is authorised and regulated by the UK Financial Services
Authority. Neither Macquarie Capital (Europe) Limited nor Macquarie Capital
(Hong Kong) Limited is an authorised deposit-taking institution for the purposes
of the Banking Act 1959 (Commonwealth of Australia), and neither of their
obligations represent deposits or other liabilities of Macquarie Bank Limited
ABN 46 008 583 542. Macquarie Bank Limited does not guarantee or otherwise
provide assurance in respect of the obligations of Macquarie Capital (Europe)
Limited or Macquarie Capital (Hong Kong) Limited.
Credit Suisse, which is authorised and regulated by the Financial Services
Authority, is acting for Kuoni and for no one else in connection with the
matters referred to in this announcement and will not be responsible to anyone
other than Kuoni for providing the protections afforded to clients of Credit
Suisse or for providing advice in relation to this matter, the content of this
announcement or any matter referred to herein. Neither Credit Suisse nor any of
its subsidiaries, branches or affiliates owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client of Credit
Suisse in connection with this announcement, any statement contained herein or
otherwise.
The availability of the Proposal to Et-china Shareholders who are not resident
in and citizens of the United Kingdom or Jersey may be affected by the laws of
the relevant jurisdictions in which they are located or of which they are
citizens. Such persons should inform themselves of, and observe, any applicable
legal or regulatory requirements of their jurisdictions. Further details in
relation to overseas shareholders will be contained in the Scheme Document.
The distribution of this announcement in jurisdictions other than in the United
Kingdom or Jersey may be restricted by law and therefore any persons who are
subject to the laws of any jurisdiction other than the United Kingdom or Jersey
should inform themselves about, and observe, any applicable requirements. This
announcement has been prepared for the purposes of complying with Jersey law and
the AIM Rules and information disclosed may not be the same as that which would
have been disclosed if this announcement had been prepared in accordance with
the laws of any jurisdiction outside the United Kingdom or Jersey.
If Kuoni exercises its right to implement the Proposal by way of a Takeover
Offer, the Proposal will not be made, directly or indirectly, in, into or from
any jurisdiction where to do so would violate the laws in that jurisdiction.
Accordingly, copies of this announcement and formal documentation relating to
the Proposal will not be and must not be, mailed or otherwise forwarded,
distributed or sent in, into or from any jurisdiction where to do so would
violate the laws in that jurisdiction.
The Proposal relates to the shares of a Jersey company and is proposed to be
effected by means of a scheme of arrangement under Jersey law. The Proposal will
not be sent to Et-china Shareholders who are resident in, or citizens of, or are
organised or incorporated in, the United States. Accordingly, neither this
announcement nor any other document in connection with the Proposal shall be
released, published or distributed in whole or in part in, into or from the
United States or any other jurisdiction where to do so would constitute a
violation of the relevant laws in that jurisdiction. Neither this announcement
nor any other document in connection with the Proposal shall be forwarded by any
nominee, custodian, broker or other intermediary in, into or from the United
States.
Hong Kong
WARNING
The contents of this announcement and the Scheme Document have not been reviewed
by any regulatory authority in Hong Kong. You are advised to exercise caution in
relation to the offer. If you are in doubt about any of the contents of this
announcement or the Scheme Document, you should obtain independent professional
advice.
This announcement and the Scheme Document do not constitute an offer or
invitation to the public in Hong Kong to subscribe for or dispose of the Scheme
Shares. Accordingly, unless permitted by the securities laws of Hong Kong, no
person may issue or have in its possession for the purposes of issue, this
announcement or any invitation or document relating to the Scheme Shares,
whether in Hong Kong or elsewhere, which is directed at, or the contents of
which are likely to be accessed or read by, the public in Hong Kong other than
in circumstances which do not constitute an offer or an invitation to the public
for the purposes of the SFO. However, numbered copies of the Scheme Document may
be issued to a limited number of shareholders in Hong Kong in a manner which
does not constitute an issue, circulation or distribution of this document, or
any offer or invitation in respect of the Scheme Shares, to the public in Hong
Kong. Only the person to whom a numbered copy of the Scheme Document has been
issued may take action in response to the Scheme Document. No person to whom a
numbered copy of the Scheme Document is issued may issue, circulate or
distribute this document in Hong Kong or make or give a copy of this document to
any other person.
Forward-Looking Statements
This announcement, oral statements made regarding the Proposal, and other
information published by Kuoni and Et-china may contain "forward-looking
statements". These statements are based on the current expectations of the
management of Kuoni and Et-china and are naturally subject to uncertainty and
changes in circumstances. The forward-looking statements contained herein
include statements about the expected effects of the Proposal on Et-china and
Kuoni, the expected timing and scope of the Proposal, enhanced customer support,
access to greater resources and other synergies, other strategic options and all
other statements in this announcement other than historical facts.
Forward-looking statements include, without limitation, statements typically
containing words such as "intends", "expects", "anticipates", "believes",
"estimates", "will" "may" and "should" and words of similar import. By their
nature, forward-looking statements involve risk and uncertainty because they
relate to events and depend on circumstances that will occur in the future.
There are a number of factors that could cause actual results and developments
to differ materially from those expressed or implied by such forward-looking
statements. These factors include, but are not limited to, the satisfaction of
the Conditions to the Proposal, as well as additional factors, such as changes
in economic conditions, changes in the level of capital investment, success of
business and operating initiatives and restructuring objectives, customers'
strategies and stability, changes in the regulatory environment, fluctuations in
interest and exchange rates, the outcome of litigation, government actions and
natural phenomena such as floods, earthquakes and hurricanes. Other unknown or
unpredictable factors could cause actual results to differ materially from those
in the forward-looking statements. Given these risks and uncertainties,
investors should not place undue reliance on forward-looking statements as a
prediction of actual results. Neither Kuoni, nor Et-china undertakes any
obligation to update publicly or revise forward-looking statements, whether as a
result of new information, future events or otherwise, except to the extent
legally required.
FOR IMMEDIATE RELEASE
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS IN THAT JURISDICTION
2 June 2010
RECOMMENDED ACQUISITION OF ET-CHINA.COM INTERNATIONAL HOLDINGS LIMITED
BY KUONI TRAVEL HOLDING LTD
1. Introduction
The board of Kuoni Travel Holding Ltd. ("Kuoni") and the Independent Directors
of Et-china.com International Holdings Limited ("Et-china" or the "Company") are
pleased to announce that they have reached agreement on the terms of a
recommended proposal whereby Kuoni will acquire, for cash, all the issued and to
be issued ordinary shares in Et-china not owned by Kuoni (the "Proposal"). It is
intended that the Proposal will be implemented by way of a scheme of arrangement
under Part 18A of the Jersey Law. The Scheme will require the approval of the
Scheme Shareholders and the sanction of the Court. The associated Reduction of
Capital will require the approval of the shareholders by special resolution and
confirmation of the Court.
As Maria Ng is an employee of the Kuoni Group as well as being an Et-china
Director, she has absented herself from all deliberations of the board of
Et-china in connection with the Proposal. Accordingly, the Proposal has been
considered and recommended by the Independent Directors.
2. The Proposal
Under the terms of the Proposal, which will be subject to the Conditions and
further terms set out in Appendix 1 to this announcement and to the full terms
and Conditions to be set out in the Scheme Document and the Forms of Proxy, when
issued, Scheme Shareholders will be entitled to receive:
+-----------------------------------+--------------------+
| for each Et-china Share | 115 pence in cash |
+-----------------------------------+--------------------+
The Proposal values the entire issued ordinary share capital of Et-china at
approximately GBP40 million and the entire issued and to be issued ordinary
share capital at approximately GBP56 million. The Offer Price represents a
premium of approximately 219.4 per cent. to the Closing Price of 36.0 pence per
Et-china Share on 1 June 2010, being the latest practicable Business Day prior
to the date of this announcement.
In addition to the Et-china Shares, Et-china has in issue 547,501 Et-china A
Ordinary Shares. The Et-china A Ordinary Shares were issued pursuant to a number
of share sale and subscription agreements dated on or about 6 March 2008 between
certain individuals and Et-china for the acquisition of shares in GZL. The
consideration payable under these arrangements was cash and Et-china A Ordinary
Shares which at a later date would convert into Et-china Shares on the
occurrence of certain conditions. The current Et-china A Ordinary Shares in
issue will not form part of the Scheme. The Et-china A Ordinary Shares have no
rights to dividends, capital or voting.
3. Recommendation
The Independent Directors of Et-china, who have been advised by Macquarie (in
its capacity as financial adviser to Et-china), consider the terms of the
Proposal to be fair from a financial point of view to the Et-china Shareholders.
In providing its advice to the Independent Directors, Macquarie has taken into
account the commercial assessments of the Independent Directors. In addition,
the Independent Directors of Et-china consider the terms of the Proposal to be
in the best interests of Et-china Shareholders as a whole. Accordingly, the
Independent Directors of Et-china intend unanimously to recommend that Et-china
Shareholders vote in favour of the Scheme to be proposed at the Court Meeting
and to vote in favour of the Resolutions to be proposed at the Extraordinary
General Meeting (or, in the event that the Proposal is implemented by way of a
Takeover Offer, to accept or procure acceptance of such offer) as the
Independent Directors have irrevocably undertaken to do in respect of their own
beneficial shareholdings (and, where applicable, those of their connected
persons) totalling 5,465,680 Et-china Shares, representing, in aggregate,
approximately 15.6 per cent. of the entire issued ordinary share capital of
Et-china.
4. Background to, and reasons for, recommending the Proposal
Et-china was listed on AIM in August 2007, and is primarily engaged in the
provision of travel related services including air-ticketing, train ticketing,
hotel reservation, provision of package tour services, conference services and
other related services as well as property development in the PRC. Since 2006,
Et-china has subscribed for or acquired or contracted to acquire a total of
54.43 per cent. of GZL, one of the largest group leisure travel companies in
South China.
Since its listing on AIM, Et-china has consistently applied its strategy set out
at that time which has resulted in growth both in its market share and its
revenue.
However, since the time of its listing, until 1 June 2010 (being the latest
practicable Business Day prior to this announcement), Et-china's share price has
underperformed the FTSE AIM All Share Index and Et-china has received little
attention from UK investment analysts, institutional investors or investment
publications.
Whilst pursuing its strategy to create a strong business and to develop Et-china
into a leading integrated travel operator in South China, Et-china has been
approached by several parties from time to time with a view to acquiring some or
all of Et-china's businesses, none of which led to a formal offer being made for
the Company.
In June 2009, Kuoni acquired 31.8 per cent. of Et-china's issued ordinary share
capital, forming a key long-term strategic partnership between Et-china and
Kuoni. In February 2010, Kuoni increased its shareholding in Et-china to just
under 33.0 per cent. of Et-china's issued ordinary share capital and purchased
GBP500,000 in aggregate principal amount of the Et-china Convertible Bonds. The
boards of Et-china and Kuoni have now reached agreement on the terms of a
recommended cash proposal for all the issued and to be issued ordinary shares in
Et-china not owned by Kuoni. The Proposal provides Et-china Shareholders with
the opportunity to realise significant value in cash, substantially above the
recent trading price, giving certainty to Et-china Shareholders.
The Independent Et-china Directors believe the terms of the Proposal fairly
reflect the current strengths and future prospects of the business and that
under Kuoni's ownership, Et-china would be better assisted with funding and
strategic direction than as a standalone business and that ownership by Kuoni
should offer the benefits of being part of an established global operator.
5. Background to and reasons for the Proposal
Kuoni Group believes a combination of its Asian business with Et-china has
significant strategic merit in terms of geographic footprint, local business
know-how, customer base and e-platform and that Et-china's strong foothold in
South China, the country's fastest growing region, is highly complementary to
Kuoni Group's existing business in Asia that is operated from Hong Kong. Kuoni
Group believes that it will be able to secure a highly skilled local management
team together with experienced employees in a highly competitive and rapidly
developing market.
6. Information on Et-china
Et-china is primarily engaged in the provision of travel related services
including air-ticketing, train ticketing, hotel reservation, provision of
package tour services, conference services and other related services as well as
property development in the PRC. In addition, Et-china, through a joint-venture
with China Southern Airlines, provides the e-ticketing service and back office
support for China Southern Airlines.
Et-china principally operates under two brands, being Et-china and GZL. Et-china
is focused on corporate travel accounts and on the emerging frequent independent
travellers ("FIT") market whilst GZL primarily focuses on the packaged group
tours market. Through these two brands, the Group is now considered one of the
market leaders for the provision of travel services in South China. The Group
operates through more than 160 retail outlets, a call centre and an internet
booking website.
Et-china was founded in 2000 and began operating from its Guangzhou base as an
online travel company in January 2000 after securing a strategic partnership
with China Southern Airlines, now the largest airline in China. Due to the
immaturity of online travel at that stage, Et-china initially focused on the
managed corporate travel segment and secured a number of major corporate
accounts from leading multinational companies.
In October 2002, Et-china established e-JV, a joint venture with China Southern
Airlines to be the exclusive provider of sales and services for all China
Southern Airlines e-ticketing. This contract was initially for five years to
October 2007 but in June 2007 was extended for an additional ten years to April
2018.
From March 2006 to mid 2008, Et-china Group subscribed for or acquired or
contracted to acquire a total 54.43 per cent. of GZL. GZL was reincorporated
from Guangzhou Travel Company which was established in 1980 by the Government of
Guangzhou and has become one of the largest travel companies in South China for
both outbound and domestic travel. It specialises in leisure tour services and
is one of the largest leisure tour operators in China.
As part of its intention to strengthen its online platform, Et-china acquired
Yoee.com, a Beijing-based online travel company specialising in the sale of air
tickets, in March 2009.
For the year ended 31 December 2009, Et-china reported revenue of approximately
RMB 1,909 million (2008: approximately RMB 1,741 million) and loss after income
tax of approximately RMB 31 million (2008: approximately RMB 84 million). As at
31 December 2009, Et-china had net assets of approximately RMB 129 million
(2008: approximately RMB 164 million).
7. Information on Kuoni Group
Kuoni is one of the world's leading globally-active leisure travel
organisations. The group is headquartered in Zurich, Switzerland and has branch
operations in over 40 countries in Europe, Asia, Africa, Australia and North
America with a worldwide workforce in excess of 9,070 employees. Kuoni Group is
listed on the Swiss Stock Exchange with a market capitalisation as at 1 June
2010 of approximately CHF 933 million. Leisure travel accounted for
approximately 78 per cent. of the group's total turnover while its destination
management activities generated approximately 22 per cent.
For the year ended 31 December 2009, Kuoni Group reported revenues of CHF 3,894
million (2008: CHF 4,855 million) and net profit of CHF 2 million (2008: CHF 151
million). As at 31 December 2009, Kuoni Group had net assets of CHF 592 million
(2008: CHF 606 million).
Kuoni has an interest in 11,540,110 Et-china Shares, representing just under
33.0 per cent. of the entire issued ordinary share capital of Et-china.
Kuoni holds GBP500,000 in aggregate principal amount of the Et-china Convertible
Bonds.
Based on the terms of the Proposal, Kuoni Group's total investment in Et-china
would be approximately GBP49 million in aggregate (including prior investments
in Et-china).
Further information on the Kuoni Group is available on its web site at
www.kuoni-group.com.
8. Irrevocable Undertakings
Kuoni has received irrevocable undertakings from each of the Independent
Directors to vote in favour of the Scheme to be proposed at the Court Meeting
and to vote in favour of the Resolutions to be proposed at the Extraordinary
General Meeting (or, in the event that the Proposal is implemented by way of a
Takeover Offer, to accept or procure acceptance of such offer) in respect of
their own beneficial shareholdings (and, where applicable, those of their
connected persons) totalling 5,465,680 Et-china Shares, representing, in
aggregate, approximately 15.6 per cent. of the entire issued ordinary share
capital of Et-china. These undertakings remain binding in the event of a
Competing Proposal being made for Et-china. These undertakings also include a
warranty from each of the Independent Directors as to Et-china's fully diluted
share capital.
In addition, Kuoni has received an irrevocable undertaking from one other
Et-china Shareholder (Mintpine, an Australian company which holds Et-china
shares on trust for certain individuals and other entities), to vote in favour
of the Scheme to be proposed at the Court Meeting and to vote in favour of the
Resolutions to be proposed at the Extraordinary General Meeting (or, in the
event that the Proposal is implemented by way of a Takeover Offer, to accept or
procure acceptance of such offer). Mintpine's irrevocable undertaking relates to
10,177,983 Et-china Shares, representing, in aggregate, approximately 29.1 per
cent. of the entire issued ordinary share capital of Et-china (of which
4,638,836 Et-china Shares in aggregate are held by Mintpine on trust for
Independent Directors of Et-china (and/or their family trusts), all of which are
also covered by the directors' irrevocable undertakings). This undertaking
remains binding in the event of a Competing Proposal being made for Et-china.
Accordingly, Kuoni has received, in aggregate, irrevocable undertakings from
certain Et-china Shareholders to vote in favour of the Scheme to be proposed at
the Court Meeting and to vote in favour of the Resolutions to be proposed at the
Extraordinary General Meeting (or, in the event that the Proposal is implemented
by way of a Takeover Offer, to accept or procure acceptance of such offer) in
respect of 11,004,827 Et-china Shares, representing, in aggregate, approximately
31.5 per cent. of the entire issued ordinary share capital of Et-china.
Further details of these irrevocable undertakings are set out in Appendix 3 to
this announcement.
9. Structure of the Proposal
The Proposal is intended to be effected by means of a court-sanctioned scheme of
arrangement between Et-china and the Scheme Shareholders under Part 18A of the
Jersey Law.
The objective of the Proposal is for Kuoni to become the owner of the whole of
the issued and to be issued ordinary share capital of Et-china. This is to be
achieved, on the Scheme becoming effective, by the cancellation of the Scheme
Shares by the Reduction of Capital and the issue of new Et-china Shares to Kuoni
so that Et-china will become wholly owned by Kuoni. In consideration for the
cancellation of the Scheme Shares, each Scheme Shareholder will receive 115
pence in cash from Kuoni for each Scheme Share that they hold.
To become effective, the Scheme requires, amongst other things, the approval of
a majority in number of the Scheme Shareholders (which excludes Kuoni) present
and voting in person or by proxy at the Court Meeting, representing not less
than three-fourths of the voting rights of the Scheme Shares held by such Scheme
Shareholders (that is excluding the Excluded Shares), together with the sanction
of the Court and the passing of the Resolutions necessary to implement the
Scheme at the Extraordinary General Meeting (including a special resolution
approving the Reduction of Capital). Kuoni will not be entitled to attend or
vote at the Court Meeting. Kuoni will undertake to the Court to be bound by the
Scheme. Following the Meetings, the Scheme must be sanctioned and the Reduction
of Capital confirmed by the Court, and the Scheme will only become effective on
delivery to the Registrar of Companies of the Scheme Court Order and the
Reduction Court Order, and, in the case of the Reduction Court Order (and the
minute attached to that order), being registered by the Registrar of Companies
together with the minute of the Reduction of Capital attached thereto. Upon the
Scheme becoming effective, it will be binding on all Scheme Shareholders,
irrespective of whether or not they attended or voted at the Court Meeting or
the Extraordinary General Meeting.
The Proposal will be governed by Jersey law and will be subject to the
jurisdiction of the Jersey courts and to the Conditions and further terms set
out in Appendix 1 to this announcement and to the full terms and Conditions to
be set out in the Scheme Document and the Forms of Proxy, when issued.
It is intended that, prior to the Scheme becoming effective, Et-china will make
an application to the London Stock Exchange to cancel the admission of Et-china
Shares to trading on AIM. It is also intended that as soon as possible following
the Acquisition Effective Date, and after the admission to trading of Et-china
Shares on AIM has been cancelled, Et-china will be re-registered as a private
limited company.
Kuoni reserves the right to implement the Proposal by way of a Takeover Offer,
in which case additional documents will be despatched to Et-china Shareholders.
In such event, the Proposal will be implemented on the same terms (subject to
appropriate amendments, including (without limitation) an acceptance condition
set at 90 per cent. of the shares to which the acquisition relates or such
lesser percentage, being more than 50 per cent. (when taken together with the
Kuoni Interests), as Kuoni may decide). Further if sufficient acceptances of
such offer are received and/or sufficient Et-china Shares are otherwise
acquired, it is the intention of Kuoni to compulsorily acquire any outstanding
Et-china Shares to which such offer relates under the relevant provisions of the
Jersey Law.
10. Scheme Document
It is intended that the Scheme Document containing further details of the Scheme
will shortly be despatched to Et-china Shareholders and, for information only,
to participants in the Et-china Share Scheme, holders of Et-china Convertible
Bonds, holders of Et-china A Ordinary Shares and the holder of Et-china
Warrants. The Scheme Document will include the notices of the Meetings and full
details of the Scheme together with the expected timetable, and will specify the
necessary actions to be taken by Et-china Shareholders.
11. Et-china Share Scheme
Et-china Optionholders will be contacted regarding the effect of the Proposal on
their rights under this scheme and appropriate proposals will be made to such
participants in due course.
12. Holders of Et-china Convertible Bonds
In accordance with the terms of the Et-china Convertible Bonds, holders of the
Et-china Convertible Bonds will be contacted immediately following the date of
this announcement regarding the effect of the Proposal on their rights under the
bonds.
13. Et-china Warrant Holders
No proposals will be made to the Et-china Warrant Holders as all the Et-china
Warrants are exercisable at an exercise price that is higher than the Offer
Price.
14. Financing
The cash consideration payable by Kuoni to Scheme Shareholders under the terms
of the Proposal will be funded using Kuoni's existing cash resources.
15. Implementation Agreement and Escrow Agreement
(a) Implementation Agreement
Kuoni and Et-china have entered into an Implementation Agreement (the
"Implementation Agreement") on 2 June 2010 which provides, inter alia, for the
implementation of the Scheme and related matters in accordance with an agreed
indicative timetable. It contains certain assurances and confirmations between
the parties, including provisions to implement the Scheme and to achieve
satisfaction of the Conditions on a timely basis and undertakings regarding the
conduct of the Et-china Group prior to the Acquisition Effective Date.
The Implementation Agreement terminates in certain circumstances including:
(a) if at any time Kuoni and Et-china should so agree;
(b) if the Scheme is not sanctioned by the Scheme shareholders at the
Court Meeting or any of the resolutions to be approved at the Extraordinary
General Meeting are not so approved and Kuoni does not elect to implement the
Proposal by way of Takeover Offer;
(c) an inducement fee becoming payable by Et-china pursuant to the
Implementation Agreement;
(d) if the Acquisition Effective Date has not occurred by the Long Stop
Date; or
(e) if the Proposal lapses or is withdrawn.
The Implementation Agreement includes an inducement fee of GBP2 million which
would be payable, by Et-china to Kuoni, if prior to the termination of the
Implementation Agreement:
(i) the Independent Directors fail to recommend the Proposal unanimously
on an unqualified basis in the Acquisition Document (except where only one of
the Independent Directors, not being Matthew Ng, so fails to recommend the
Acquisition and either (i) the Acquisition Effective Date nevertheless occurs
prior to the Long Stop Date; or (ii) Kuoni becomes liable to pay its GBP2
million break fee) or subsequently any of the Independent Directors withdraws or
materially and adversely modifies his or her recommendation (except where only
one of the Independent Directors, other than Matthew Ng, so withdraws or
modifies his or her recommendation and either (i) the Acquisition Effective Date
nevertheless occurs prior to the Long Stop Date or (ii) Kuoni becomes liable to
pay its GBP2 million break fee);
(ii) an Et-china Trigger Event occurs and as a result the Acquisition
Effective Date does not occur prior to the Long Stop Date; or
(iii) Et-china takes any action which would, were Et-china to be governed
by the Takeover Code, constitute frustrating action in breach of Rule 21 of the
Takeover Code which has a material adverse effect on Et-china or any member of
the Et-china Group (and for these purposes an action shall be material if, when
taken together with other frustrating actions, it amounts to or exceeds an
aggregate amount of GBP100,000) and in addition the parties have agreed
provisions governing how Rule 21 is to apply in the circumstances of the
Proposal given that the Takeover Panel does not have jurisdiction, following
which Kuoni has notified Et-china that it wishes to withdraw from the Proposal.
Kuoni has agreed to pay Et-china a break fee of GBP2 million if prior to the
termination of the Implementation Agreement: (i) a Kuoni Trigger Event occurs
and as a result the Acquisition Effective Date does not occur prior to Long Stop
Date or (ii) Kuoni invokes (or fails to waive non-satisfaction of) a Condition
causing the Proposal to lapse or to be withdrawn other than as a result of one
of the following circumstances:
(i) a revocation by the issuing authority in the PRC of either the
International Travel Agency Services Operating Permit or the Domestic Travel
Agency Services Operating Permit; or
(ii) either:
(aa) a transfer by any current holder of sufficient shares in any member of
the Et-china Group, to a person outside the Et-china Group (other than where
those shares are to be held by such other person on the same or similar terms as
they are currently held);
(bb) a breach by any holder of shares in any member of the Et-china Group of
any material obligation owned by that shareholder to any member of the Et-china
Group, in connection with that shareholding; or
(cc) any relevant government body or authority making an order because of
the Proposal or the announcement of the Proposal,
in each case which has the effect that Et-china is no longer able to control its
material businesses materially on the terms it does so at the date of this
announcement; or
(iii) Et-china takes any action which would, were Et-china to be governed
by the Takeover Code, constitute frustrating action in breach of Rule 21 of the
Takeover Code which has a material adverse effect on Et-china or any member of
the Et-china Group (and for these purposes an action shall be material if, when
taken together with other frustrating actions, it amounts to or exceeds an
aggregate amount of GBP100,000) and in addition the parties have agreed
provisions governing how Rule 21 is to apply in the circumstances of the
Proposal given that the Takeover Panel does not have jurisdiction, following
which Kuoni has notified Et-china that it wishes to withdraw from the Proposal;
or
(iv) would have allowed Kuoni to invoke a Condition so as to cause the
Proposal not to proceed, to lapse or to be withdrawn under Rule 2.7 or, as
appropriate, Rule 13.4 of the Takeover Code had the Takeover Code applied to the
Proposal.
Et-china has also agreed that it will procure that no members of the Et-china
Group (or any of their connected persons) shall, either directly or indirectly,
solicit, initiate, encourage, induce or respond to or knowingly facilitate the
communication, making, submission or announcement of any Competing Proposal or
enter into or conduct any discussions in respect of the foregoing during the
period from the date of this announcement to the Acquisition Effective Date (the
"Exclusivity Period"). Save that Et-china will not be prevented during the
Exclusivity Period from responding or providing information to or negotiating or
recommending any Competing Proposal where the Independent Directors determine,
in good faith, after consultation with, and upon the advice of, external legal
advisers that the failure to respond to or negotiate with such third party would
be in breach of any of the statutory or common law duties of the Independent
Directors and Et-china shall promptly inform Kuoni that it is engaging in any
such communications or negotiations and it will notify Kuoni if it or any of its
connected persons has received or become aware of an unsolicited Competing
Proposal during the Exclusivity Period and it will then provide to Kuoni
material details of that proposal (being the offer price, the nature of the
consideration and the identity of the person making the Competing Proposal).
The Independent Directors consider, having consulted with Seymour Pierce,
Et-china's nominated adviser, that the terms of the Implementation Agreement are
fair and reasonable in so far as its shareholders are concerned.
(b) Escrow Agreement
Matthew Ng, Jianxu Lu, Shaodong Zhu and Weixing Zhang have entered into an
escrow agreement pursuant to which a total amount of US$1 million in aggregate
of the consideration which they would otherwise receive under the Scheme (in the
case of Matthew Ng) or pursuant to the proposal which is expected to be made to
the Et-china Optionholders for their options granted under the Et-china Share
Scheme (in the case of Jianxu Lu, Shaodong Zhu and Weixing Zhang) will be placed
into escrow until 30 September 2011 to be payable to Kuoni if within that period
certain business issues arise.
16. Directors, Management, Employees and Location of Head Office
Kuoni has given assurances to the Independent Directors that, following the
Scheme becoming effective, the existing contractual employment rights of all
employees of the Et-china Group will be fully safeguarded. Kuoni has also
confirmed that Et-china's management will continue to be based in Guangzhou with
its registered office to remain in Jersey.
On the Scheme becoming effective, it is intended that Matthew Ng will receive an
incentive package, made up of a base salary of GBP140,000 per annum, benefits of
GBP40,000 per annum and an annual bonus of GBP100,000. The bonus is divided into
a short term cash portion and long term performance share bonus, all of which
are in line with Kuoni's current compensation policy. In addition, Matthew Ng
will be entitled to a long term one-off cash payment of between US$2 million and
US$4 million at the end of the period of three years from the Scheme becoming
effective based on achieving pre-determined business plan targets. A report
commissioned by the Independent Directors excluding Matthew Ng of Et-china has
been provided by an independent remuneration expert which concluded that the
total remuneration package for Matthew Ng is within market ranges.
Et-china's remuneration committee has agreed that Matthew Ng may, conditional on
the Scheme, take his current accrued bonus by way of issue of Et-china Shares at
an allotment price of GBP1.27 per share (being the Admission Price). Matthew Ng
has therefore been allotted 1,118,014 Et-china Shares conditional on the Scheme
being sanctioned by the Court at the Second Court Hearing.
It is intended that the current two Executive Directors will remain at the
Company and Matthew Ng will be appointed as Managing Director of Et-china and
Kitty Yang will be appointed as the Finance Director of Et-china. The current
Non-Executive Directors Christopher Rose and Robert Drummond have tendered their
resignations conditional on the Scheme becoming effective and their appointments
will terminate in accordance with their agreements on the Scheme becoming
effective. It is intended that Maria Ng will remain a non-executive director of
the Company.
17. Disclosure of interests in Et-china
Save for the Kuoni Interests and the irrevocable undertakings referred to in
paragraph 8 above (and detailed in Appendix 3 to this announcement), as at the
close of business on 1 June 2010, the last Business Day prior to the date of
this announcement:
· neither Kuoni nor any of the Kuoni Executive Board nor, so far as the
Kuoni Executive Board are aware, any member of the Kuoni Group or any director
of Kuoni or any person acting in concert with any of them for the purposes of
the Proposal, has any interest in, or right to subscribe for, any Et-china
Shares or securities convertible or exchangeable into Et-china Shares ("Et-china
Securities"); and
· neither Kuoni nor any of the Kuoni Executive Board nor, so far as the
Kuoni Executive Board are aware any member of the Kuoni Group or any director of
Kuoni or any person acting in concert with any of them for the purposes of the
Proposal, has any short position (whether conditional or absolute and whether in
the money or otherwise) including short positions under derivatives or
arrangement in relation to Et-china Securities.
For these purposes, "arrangement" includes any indemnity or option arrangement
or any agreement or understanding, formal or informal, of whatever nature,
relating to Et-china Securities which may be an inducement to deal or refrain
from dealing in such securities.
18. Cancellation of admission to trading
It is intended that, prior to the Scheme becoming effective, Et-china will make
an application to the London Stock Exchange to cancel the admission of Et-china
Shares to trading on AIM. It is also intended that as soon as possible following
the Acquisition Effective Date, and after the admission to trading of Et-china
Shares on AIM has been cancelled, Et-china will be re-registered as a private
limited company.
19. General
The Proposal will be governed by Jersey law and will be subject to the
jurisdiction of the Jersey courts and to the Conditions and further terms set
out in Appendix 1 to this announcement and to the full terms and Conditions to
be set out in the Scheme Document and the Forms of Proxy, when issued.
The bases and sources of certain financial information contained in this
announcement are set out in Appendix 2 to this announcement.
Certain terms used in this announcement are defined in Appendix 4 to this
announcement.
This announcement is not intended to and does not constitute or form part of any
offer to sell or subscribe for or any invitation to purchase or subscribe for
any securities or the solicitation of any vote or approval in any jurisdiction
pursuant to the Proposal or otherwise. The Proposal will be made solely by means
of the Scheme Document, which will contain the full terms and conditions of the
Proposal, including details of how to vote in favour of the Scheme. Any response
in relation to the Proposal should be made only on the basis of the information
in the Scheme Document or any document by which the Proposal is made. Et-china
will prepare the Scheme Document to be distributed to Et-china Shareholders.
Et-china and Kuoni urge Et-china Shareholders to read the Scheme Document when
it becomes available because it will contain important information relating to
the Proposal.
Macquarie is acting exclusively as financial advisor to Et-china and no-one else
in connection with the Proposal and will not be responsible to anyone other than
Et-china for providing the protections afforded to clients of Macquarie or for
providing advice in relation to the Proposal. Macquarie Capital (Europe) Limited
is authorised and regulated by the UK Financial Services Authority. Neither
Macquarie Capital (Europe) Limited nor Macquarie Capital (Hong Kong) Limited is
an authorised deposit-taking institution for the purposes of the Banking Act
1959 (Commonwealth of Australia), and neither of their obligations represent
deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542.
Macquarie Bank Limited does not guarantee or otherwise provide assurance in
respect of the obligations of Macquarie Capital (Europe) Limited or Macquarie
Capital (Hong Kong) Limited.
Credit Suisse, which is authorised and regulated by the Financial Services
Authority, is acting for Kuoni and for no one else in connection with the
matters referred to in this announcement and will not be responsible to anyone
other than Kuoni for providing the protections afforded to clients of Credit
Suisse or for providing advice in relation to this matter, the content of this
announcement or any matter referred to herein. Neither Credit Suisse nor any of
its subsidiaries, branches or affiliates owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client of Credit
Suisse in connection with this announcement, any statement contained herein or
otherwise.
The availability of the Proposal to Et-china Shareholders who are not resident
in and citizens of the United Kingdom or Jersey may be affected by the laws of
the relevant jurisdictions in which they are located or of which they are
citizens. Such persons should inform themselves of, and observe, any applicable
legal or regulatory requirements of their jurisdictions. Further details in
relation to overseas shareholders will be contained in the Scheme Document.
The distribution of this announcement in jurisdictions other than in the United
Kingdom or Jersey may be restricted by law and therefore any persons who are
subject to the laws of any jurisdiction other than the United Kingdom or Jersey
should inform themselves about, and observe, any applicable requirements. This
announcement has been prepared for the purposes of complying with Jersey law and
the AIM Rules and information disclosed may not be the same as that which would
have been disclosed if this announcement had been prepared in accordance with
the laws of any jurisdiction outside the United Kingdom or Jersey.
If Kuoni exercises its right to implement the Proposal by way of a Takeover
Offer, the Proposal will not be made, directly or indirectly, in, into or from
any jurisdiction where to do so would violate the laws in that jurisdiction.
Accordingly, copies of this announcement and formal documentation relating to
the Proposal will not be and must not be, mailed or otherwise forwarded,
distributed or sent in, into or from any jurisdiction where to do so would
violate the laws in that jurisdiction.
The Proposal relates to the shares of a Jersey company and is proposed to be
effected by means of a scheme of arrangement under Jersey law. The Proposal will
not be sent to Et-china Shareholders who are resident in, or citizens of, or are
organised or incorporated in, the United States. Accordingly, neither this
announcement nor any other document in connection with the Proposal shall be
released, published or distributed in whole or in part in, into or from the
United States or any other jurisdiction where to do so would constitute a
violation of the relevant laws in that jurisdiction. Neither this announcement
nor any other document in connection with the Proposal shall be forwarded by any
nominee, custodian, broker or other intermediary in, into or from the United
States.
Hong Kong
WARNING
The contents of this announcement and the Scheme Document have not been reviewed
by any regulatory authority in Hong Kong. You are advised to exercise caution in
relation to the offer. If you are in doubt about any of the contents of this
announcement or the Scheme Document, you should obtain independent professional
advice.
This announcement and the Scheme Document do not constitute an offer or
invitation to the public in Hong Kong to subscribe for or dispose of the Scheme
Shares. Accordingly, unless permitted by the securities laws of Hong Kong, no
person may issue or have in its possession for the purposes of issue, this
announcement or any invitation or document relating to the Scheme Shares,
whether in Hong Kong or elsewhere, which is directed at, or the contents of
which are likely to be accessed or read by, the public in Hong Kong other than
in circumstances which do not constitute an offer or an invitation to the public
for the purposes of the SFO. However, numbered copies of the Scheme Document may
be issued to a limited number of shareholders in Hong Kong in a manner which
does not constitute an issue, circulation or distribution of this document, or
any offer or invitation in respect of the Scheme Shares, to the public in Hong
Kong. Only the person to whom a numbered copy of the Scheme Document has been
issued may take action in response to the Scheme Document. No person to whom a
numbered copy of this document is issued may issue, circulate or distribute this
document in Hong Kong or make or give a copy of this document to any other
person.
Forward-Looking Statements
This announcement, oral statements made regarding the Proposal, and other
information published by Kuoni and Et-china may contain "forward-looking
statements". These statements are based on the current expectations of the
management of Kuoni and Et-china and are naturally subject to uncertainty and
changes in circumstances. The forward-looking statements contained herein
include statements about the expected effects of the Proposal on Et-china and
Kuoni, the expected timing and scope of the Proposal, enhanced customer support,
access to greater resources and other synergies, other strategic options and all
other statements in this announcement other than historical facts.
Forward-looking statements include, without limitation, statements typically
containing words such as "intends", "expects", "anticipates", "believes",
"estimates", "will" "may" and "should" and words of similar import. By their
nature, forward-looking statements involve risk and uncertainty because they
relate to events and depend on circumstances that will occur in the future.
There are a number of factors that could cause actual results and developments
to differ materially from those expressed or implied by such forward-looking
statements. These factors include, but are not limited to, the satisfaction of
the Conditions to the Proposal, as well as additional factors, such as changes
in economic conditions, changes in the level of capital investment, success of
business and operating initiatives and restructuring objectives, customers'
strategies and stability, changes in the regulatory environment, fluctuations in
interest and exchange rates, the outcome of litigation, government actions and
natural phenomena such as floods, earthquakes and hurricanes. Other unknown or
unpredictable factors could cause actual results to differ materially from those
in the forward-looking statements. Given these risks and uncertainties,
investors should not place undue reliance on forward-looking statements as a
prediction of actual results. Neither Kuoni, nor Et-china undertakes any
obligation to update publicly or revise forward-looking statements, whether as a
result of new information, future events or otherwise, except to the extent
legally required.
APPENDIX 1
CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE PROPOSAL
Part A: Conditions to the Proposal
1. The Proposal is conditional upon the Scheme becoming or being
declared unconditional and becoming effective by the Long-Stop Date.
2. The Scheme will be subject to the following conditions:
(a) approval of the Scheme by a majority in number, representing at least
three-fourths of the voting rights of Scheme Shareholders (or the relevant class
or classes thereof) present, entitled to vote and voting, either in person or by
proxy, at the Court Meeting and at any separate class meeting which may be
required by the Court (or at any adjournment of that meeting);
(b) the Resolutions being duly passed by the requisite majorities of
Et-china Shareholders at the EGM (or at any adjournment of that meeting);
(c) the sanction of the Scheme by the Court (with or without
modification, but subject to any modification being on terms acceptable to Kuoni
and Et-china) and the delivery of the Scheme Court Order to the Registrar of
Companies; and
(d) the confirmation of the Reduction of Capital by the Court (with or
without modification, but subject to any modifications being on terms acceptable
to Kuoni and Et-china) and the Reduction Court Order and minute of such
reduction attached thereto being filed with, and registered by, the Registrar of
Companies.
3. In addition, Kuoni and Et-china have agreed that, subject to Clause 4
below, the Scheme will be conditional upon the following matters and,
accordingly, the Court's sanction of the Scheme will not be sought unless such
conditions (as amended, if appropriate) have been satisfied (and continue to be
satisfied pending commencement of the Second Court Hearing) or waived:
(a) no PRC Authority having received any complaint or reference or having
taken, threatened to take or proposed any action or investigation or having
decided or proposed to enact, amend or revoke any statute, regulation, decision,
order or published practice which would or might reasonably be expected to:
(i) result in any member of the Et-china Group ceasing to hold or
ceasing to be able to use in its business any Key Licence in all material
respects on the same basis and terms as at present apply;
(ii) result in any material loss to any member of the Et-china Group of
any of its existing rights to, or control over, any material part of the
businesses of the Et-china Group as such businesses are presently operated; or
(iii) result in any material fines, penalties of other costs being
imposed on any member of the Et-china Group by any PRC Authority;
(b) all necessary filings, applications and/or notifications (including
any national anti-trust, competition or merger control filings) having been
made, and all necessary waiting and other time periods (including extensions
thereof) under any applicable legislation or regulation of any relevant
jurisdiction having expired, lapsed or been terminated, and all statutory or
regulatory obligations in any relevant jurisdiction having been complied with,
in each case in respect of the Scheme or in connection with the Proposal or any
part thereof or any matter arising therefrom or relating thereto, and all
authorisations, orders, recognitions, grants, consents, licences, confirmations,
certificates, clearances, permissions and approvals necessary or appropriate in
any jurisdiction for, or in respect of, the Scheme or in connection with the
Proposal or any part thereof or any matter arising therefrom or relating thereto
and to carry on any material part of the business of any member of the Kuoni
Group or any member of the Et-china Group ("Authorisations") having been
obtained, in terms and in a form reasonably satisfactory to Kuoni, from all
appropriate Relevant Authorities and from any persons or bodies with whom any
member of the Kuoni Group or any member of the Et-china Group has entered into
contractual arrangements, and any conditions or obligations attached to any such
Authorisations being on terms and in a form reasonably satisfactory to Kuoni,
and all such Authorisations remaining in full force and effect and no intimation
of any intention to revoke, suspend, restrict, modify or not to renew any of the
same having been made and all necessary statutory or regulatory obligations in
any jurisdiction having been complied with;
(c) no Relevant Authority (including any national or supranational
anti-trust, competition or merger control authority) having instituted,
implemented or threatened any action, proceeding, suit, investigation, reference
or enquiry, or made, proposed or enacted any statute, legislation, regulation,
decision or order or change to published practice or taken or proposed to take
any other steps and there not continuing to be outstanding any statute,
legislation, regulation, decision or order or change to published practice which
would or might reasonably be expected (in a manner or to an extent which would
be reasonably likely to have a material adverse effect on the Et-china Group
taken as a whole) to:
(i) make the Scheme, its implementation or the Proposal or the proposed
acquisition by Kuoni of any shares or other securities in, or control or
management of, Et-china or any member of the Et-china Group, void,
unenforceable, prohibited and/or illegal in any jurisdiction or otherwise
directly or indirectly restrain, restrict, prevent, prohibit, delay or otherwise
interfere with the same, or impose additional conditions or obligations with
respect thereto, or otherwise impede, challenge or interfere with the same;
(ii) require, prevent or materially delay the divestiture, or alter the
terms of any proposed divestiture, by any member of the Kuoni Group or the
Et-china Group of all or any material part of their respective businesses,
assets or property (including without limitation any Scheme Shares) or impose
any material limitation on the ability of any member of the Kuoni Group or the
Et-china Group to conduct any of their respective businesses or own or dispose
of any of their respective assets or property or any part thereof;
(iii) impose any material limitation on, or result in a material delay
in, the ability of any member of the Kuoni Group or the Et-china Group to
acquire or to hold or to exercise effectively, directly or indirectly, all or
any rights of ownership in respect of shares or loans or securities convertible
into shares or other securities (or the equivalent) in, or to exercise voting or
management control over, any member of the Kuoni Group or the Et-china Group;
(iv) require any member of the Kuoni Group or the Et-china Group to
acquire, or to offer to acquire, any shares or other securities (or their
equivalent) or any interest in any member of the Et-china Group or any asset
owned by any third party (other than in the implementation of the Proposal) or
to sell or offer to sell any shares or other securities (or their equivalent) or
any interest in any assets owned by any member of the Kuoni Group or the
Et-china Group;
(v) impose any material limitation on the ability of any member of the
Kuoni Group or the Et-china Group to integrate or co-ordinate its business, or
any part of it, with all or any part of the business of any other member of the
Kuoni Group or the Et-china Group;
(vi) impose any material limitation on the ability of any member of the
Kuoni Group or of the Et-china Group to conduct any material part of its
business as it is presently conducted;
(vii) result in any member of the Kuoni Group or the Et-china Group
ceasing to be able to carry on business under any name under which it presently
does so or ceasing to be able to use in its business any name, trademark or
other material intellectual property right which it at present uses, in each
case on the same basis and terms as at present apply; or
(viii) otherwise materially and adversely affect the business, assets,
financial or trading position, profits or prospects of any member of the
Et-china Group or of any member of the Kuoni Group;
and all applicable waiting and other time periods during which any such Relevant
Authority could institute or implement any such action, proceeding, suit,
investigation, reference or enquiry or otherwise intervene under the laws of any
relevant jurisdiction in respect of the Scheme or in connection with the
Proposal or any part thereof or any matter arising therefrom or relating thereto
having expired, lapsed or been terminated;
(d) save as Disclosed, there being no provision of any arrangement,
agreement, licence, permit, lease, franchise, authorisation or other instrument
to which any member of the Et-china Group is a party, or by or to which any such
member or any of its material assets is or are or may be bound, entitled or
subject and which, in consequence of the Scheme or the Proposal or any part
thereof or any matter arising therefrom or relating thereto or the proposed
acquisition of any shares or other securities in, or control or management of,
Et-china or any member of the Et-china Group by Kuoni or because of a change in
the control or management of Et-china or any member of the Et-china Group or
otherwise, would or might reasonably be expected to result (to an extent which
would have a material adverse effect on the Et-china Group taken as a whole) in:
(i) any monies borrowed by, or other indebtedness (actual or contingent)
of, or any grant made or available to, any such member being or becoming
repayable or capable of being declared repayable immediately or prior to their
or its stated maturity or repayment date or the ability of any such member to
borrow monies or to incur any material indebtedness being withdrawn or inhibited
or becoming capable of being withdrawn or inhibited;
(ii) any such arrangement, agreement, licence, permit, lease, franchise,
authorisation or other instrument or the rights, liabilities, obligations or
interests of any such member thereunder being terminated or adversely modified
or affected or any obligation or liability arising or any adverse action being
taken or arising thereunder;
(iii) the creation of any mortgage, charge or other security interest
over the whole or any part of the business, property or assets of any such
member other than in the ordinary course of business or any such mortgage,
charge or other security interest (whenever arising or having arisen) being
enforced or becoming enforceable or being capable of being enforced;
(iv) the rights, liabilities, obligations or interests of any such member
under any such arrangement, agreement, licence, permit, lease, franchise,
authorisation or other instrument or the interests or business of any such
member in or with any other firm or body or person (or any agreement or
arrangement relating to such interests or business) being terminated or
adversely modified or affected or any obligation or liability arising or any
action being taken or arising thereunder;
(v) any material asset or interest of, or any material asset the use of
which is enjoyed by, any such member being or falling to be disposed of or
charged or any right arising under which any such asset or interest could be
required to be disposed of or charged or could cease to be available to any such
member in each case other than in the ordinary course of business;
(vi) any such member ceasing to be able to carry on business under any
name under which it presently does so or ceasing to be able to use in its
business any name, trademark or other intellectual property right which it at
present uses, in each case on the same basis and terms as at present apply; or
(vii) the creation of any liabilities whether actual or contingent by any
such member other than in the ordinary course of business;
and no event having occurred which, under any provision of any arrangement,
agreement, licence, permit, lease, franchise, authorisation or other instrument
to which any member of the Et-china Group is a party or by or to which any such
member or any of its assets may be bound, entitled or subject would reasonably
be considered likely to result in any of the events or circumstances as are
referred to in sub-paragraphs (i) to (vii) of this Condition (d);
(e) except as Disclosed, no member of the Et-china Group having since 31
December 2009:
(i) issued or agreed to issue, or authorised or proposed the issue of,
additional shares of any class, or securities convertible into or exchangeable
for, or rights, bonds, warrants or options to subscribe for or acquire, any such
shares or convertible securities or sold or transferred any shares out of
treasury (save for options granted, and for any Scheme Shares allotted upon
exercise of options granted, under the Et-china Share Scheme or the 1,118,014
Shares to be issued to Matthew Ng in respect of his current accrued bonus
entitlement or between Et-china and wholly-owned members of the Et-china Group
before the date of the Announcement);
(ii) other than to another member of the Et-china Group which is a
Wholly owned Et-china subsidiary, lawfully recommended, declared, paid or made
or proposed lawfully to recommend, declare, pay or make any bonus in respect of
shares, dividend or other distribution, whether payable in cash or otherwise;
(iii) save for any transaction which is not material in the context of
the Et-china Group taken as a whole or transactions between Wholly owned
Et-china subsidiaries, acquired or disposed of or transferred, mortgaged,
charged or created any security interest (save arising through operation of law)
over any asset or any right, title or interest in any asset (including shares
and trade investments) or merged with, demerged or acquired any body corporate,
partnership or business or authorised or proposed or announced any intention to
propose any merger, demerger, acquisition, disposal, transfer, mortgage, charge
or security interest;
(iv) issued, agreed to issue, authorised or proposed or announced an
intention to propose the issue of, or made any change in or to, any debentures,
become subject to any contingent liability or (save for transactions which are
solely between Wholly owned Et-china subsidiaries) incurred or increased any
indebtedness or liability (actual or contingent) otherwise than in the ordinary
course of business and which is not material in the context of the Et-china
Group taken as a whole;
(v) purchased, redeemed or repaid or announced any proposal to purchase,
redeem or repay any of its own shares or other securities or reduced or made any
other change to any part of its share capital;
(vi) entered into, varied, terminated or authorised or become bound by or
proposed the entry into or variation or termination of, or announced its
intention to enter into, vary or terminate, authorise or become bound by any
contract, agreement, commitment, arrangement or transaction (whether in respect
of capital expenditure or otherwise) which: (A) is other than in the ordinary
course of business; (B) is of a long-term, onerous or unusual nature or
magnitude; or (C) involves or could involve an obligation of such a nature or
magnitude or which results or may result in any material restriction of the
scope of business currently carried on by any member of the Kuoni Group or the
Et-china Group and which is material in the context of the Et-china Group taken
as a whole;
(vii) waived or compromised or settled any claim which is material in the
context of the Et-china Group taken as a whole;
(viii) implemented, entered into or authorised, effected, proposed or
announced its intention to implement or enter into any reconstruction,
amalgamation, scheme, commitment, transaction or arrangement (otherwise than in
the ordinary course of business);
(ix) taken any corporate action or had any order made or legal
proceedings started or threatened against it or petition presented or order made
for its winding-up (voluntary or otherwise), dissolution or reorganisation or
for the appointment of any receiver, administrator, administrative receiver,
trustee or similar officer of all or any of its material assets and material
revenues or any analogous proceedings or similar event having occurred in any
jurisdiction or any analogous person having been appointed in any jurisdiction;
(x) entered into or made an offer (which remains open for acceptance) to
enter into, or changed the terms of, any agreement, contract, commitment,
transaction or arrangement with any of the directors or senior executives of any
member of the Et-china Group save for the 1,118,014 Shares to Matthew Ng in
connection with his bonus arrangements;
(xi) amended the general terms of employment of its employees, other than
in the ordinary course of business;
(xii) made, committed to make or announced an intention to propose any
change in its loan capital;
(xiii) been unable, or admitted in writing that it is unable, to pay its
debts or commenced negotiations with one or more of its creditors with a view to
rescheduling or restructuring any of its indebtedness, or having stopped or
suspended (or threatened to stop or suspend) payment of its debts generally or
ceased or threatened to cease carrying on all or a substantial part of its
business;
(xiv) made any alteration to its memorandum or articles of association (or
any equivalent constitutional documents in any jurisdiction) or, except as
Disclosed, entered into, amended or terminated any agreement or other
arrangement with any legal or nominee holder of its shares in its capacity as
such (other than Kuoni);
(xv) proposed, agreed to provide or modified the terms of the Et-china
Share Scheme or any other scheme or benefit relating to the employment or
termination of employment of any person employed by any member of the Et-china
Group;
(xvi) entered into any arrangement, contract, agreement, transaction or
commitment other than in the ordinary course of business or passed any
resolution or made any offer (which remains open for acceptance) with respect
to, or announced any intention to effect or propose, any of the transactions,
matters or events referred to in this Condition (e);
(f) except as Disclosed, since 31 December 2009:
(i) there having been no adverse change or deterioration in the
business, assets, financial or trading position or profits or prospects of any
member of the Et-china Group in a manner or to an extent that is material in the
context of the Et-china Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or other legal
proceedings having been instituted, implemented, announced or threatened by or
against or remaining outstanding against or in respect of any member of the
Et-china Group which might reasonably be expected to materially and adversely
affect the Et-china Group taken as a whole;
(iii) there having been no inquiry or investigation by or complaint or
reference to any Relevant Authority or other investigative body against or in
respect of any member of the Et-china Group and no such inquiry, investigation,
complaint or reference having been threatened, announced or instituted or
remaining outstanding which might reasonably be expected to materially and
adversely affect the Et-china Group taken as a whole;
(iv) no contingent or other liability having arisen or become apparent or
increased which has or might reasonably be expected to be material in the
context of the Et-china Group taken as a whole; and
(v) no steps having been taken and no omissions having been made which
are reasonably likely to result in the withdrawal, cancellation, termination or
modification by any Relevant Authority of any licence, permit, consent or other
authorisation held by any member of the Et-china Group which is necessary for
the carrying on of its business as currently conducted in a manner that could
reasonably be expected to be material in the context of the Et-china Group taken
as a whole;
(g) Kuoni not having discovered, except as Disclosed:
(i) that any financial, business or other information as contained in
the information disclosed to any member of the Kuoni Group or publicly disclosed
at any time by or on behalf of any member of the Et-china Group is misleading,
contains a misrepresentation of fact or omits to state a fact necessary to make
that information not misleading which has not, prior to the date of the
Announcement, has been corrected by public announcement by the delivery of an
announcement to a Regulatory Information Service and which could reasonably be
expected to be material and adverse in the context of the Et-china Group taken
as a whole;
(ii) that any member of the Et-china Group or any partnership, company
or other entity in which any member of the Et-china Group has a significant
economic interest has any liability (contingent or otherwise) that has not been
so publicly announced and which could reasonably be expected to be material and
adverse in the context of the Et-china Group taken as a whole;
(iii) any information which materially affects the import of any
information disclosed at any time by or on behalf of any member of the Et-china
Group to an extent which is material and adverse in the context of the Et-china
Group taken as a whole;
(iv) that any past or present member of the Et-china Group has failed to
comply with any applicable legislation, directives, regulations, common laws,
notices, orders, circulars, guidance notes or requirements of any applicable
jurisdiction or Relevant Authority with regard to the use, presence, treatment,
handling, storage, transport, disposal, discharge, spillage, leak, release or
emission of any waste or hazardous or harmful substance or any substance capable
of causing harm or damage to the environment, man, flora, fauna, biodiversity,
ecology or otherwise relating to environmental matters, or that there has been
any such use, presence, treatment, handling, storage, transport, disposal,
discharge, spillage, leak, release or emission (whether or not the same
constituted non-compliance by any person with any such legislation or
regulation, and whenever the same may have taken place) any of which
non-compliance would be reasonably likely to give rise to any liability (whether
actual or contingent) or cost on the part of any member of the Et-china Group
and which is material in the context of the Et-china Group taken as a whole;
(v) that there is, or is reasonably likely to be, any obligation or
liability (whether contingent or otherwise) on the part of any member of the
Et-china Group to improve or install new plant or equipment or to make good,
repair, reinstate or clean up any property, land or any waters now or previously
owned, occupied, operated, made use of or controlled by any past or present
member of the Et-china Group, or in which any such member may now have or
previously have had or be deemed to have or have had an interest, under any
past, present or future environmental legislation, directives, regulations,
common laws, notices, orders, circulars, guidance notes or requirements of any
applicable jurisdiction or any Relevant Authority, or to contribute to the cost
thereof or associated therewith or indemnify any person in relation thereto and
which is material in the context of the Et-china Group taken as a whole;
(vi) that circumstances exist whereby a person or class of persons would
be reasonably likely to have any material claim or claims in respect of any
service or product previously supplied, sold or in any way dealt with or handled
by any past or present member of the Et-china Group and could reasonably be
expected to be material in the context of the Et-china Group taken as a whole;
or
(h) Et-china not having taken any action which would, were Et-china to be
governed by the Takeover Code, constitute frustrating action in breach of Rule
21 of the Takeover Code and which has a material and adverse effect on Et-china
or any member of the Et-china Group (and for these purposes: (i) an action shall
be "material" if, when taken together with any other actions falling within this
Condition 3(h), it amounts to or exceeds an aggregate amount of GBP100,000);
(ii) Rule 21 shall be interpreted as though all references to consultation with
and the consent of the Takeover Panel had been deleted and paragraphs (A) and
(B) of Rule 21.1 shall not apply; and (iii) actions taken with the prior written
consent of Kuoni (not to be unreasonably withheld or delayed) or any actions
pursuant to any Pre-existing Obligation shall be deemed not to constitute
frustrating action in breach of Rule 21).
4. For the purposes of these Conditions:
"Disclosed" means: (i) fairly disclosed in writing prior to the date of the
Announcement by Et-china or Et-china's advisers to Kuoni or to Kuoni's legal or
financial or accounting advisers, or (ii) disclosed by being publicly announced
through a Regulatory Information Service prior to the date of the Announcement
and "Disclosure" shall be construed accordingly;
"Domestic Travel Agency Services Operating Permit" means the Domestic Travel
Agency Services Operating Permit, with the permitted business scope of inbound
travel services and domestic travel services, issued on 18 November 2009 by the
PRC National Tourism Administration in favour of Guangzhou GZL International
Travel Services Limited;
"International Travel Agency Services Operating Permit" means the International
Travel Agency Services Operation Permit, with the permitted business scope of
outbound travel services, issued on 18 November 2009 by the PRC National tourism
Administration in favour of Guangzhou GZL International Travel Services Limited;
"Key Licences" means the International Travel Agency Services Operating Permit
and the Domestic Travel Agency Services Operating Permit;
"PRC Authorities" means the central, provincial, and local governments of all
levels in the PRC, including the PRC Licensing Authorities, all the ministries,
departments, commissions, bureaus and branches of national, provincial, county
or other administrative level;
"PRC Licensing Authorities" means the Guangzhou Tourism Bureau, the Guangdong
Province Tourism Bureau, the National Tourism Bureau, the China Air Travel
Association, the South-China Regional Representative Office of the China Air
Transport Association and the Guangdong Province Communication Administration;
"Pre-existing Obligation" means any of the following:
(a) the payment of a dividend of approximately RMB4,200,000 which was
declared and approved by the board of GZL on 7 May 2010;
(b) the capital expenditure of total of RMB5,000,000 approved by the
board of GZL on 7 May 2010 in respect of the replacement of ten coaches in the
vehicle division of GZL;
(c) the declaration by Guangdon CSN-ETC e-Commerce Limited of a dividend
of RMB2,500,000 during 2010;
(d) the credit commitment by GZL of RMB30,000,000 to its associated
company Guangzhou Lvzhiguang ("LZG") approved in 2009 of which RMB15,000,000 has
already been extended to LZG;
(e) the acquisition by GZL of further shares in LZG (if it proceeds) in
the amount of approximately RMB10,000,000 which will result in GZL holding more
than 51% of shares in LZG;
(f) the payment of outstanding amount of up to RMB1,400,000 in respect of
the acquisition of Yoee.com; and
(g) the payment of fees, expenses and bonuses of Et-china's professional
advisers and transaction related fees in connection with the Proposal up to a
maximum aggregate amount of US$4,000,000;
"Wholly owned Et-china subsidiary" means any company which is directly or
indirectly wholly owned by Et-china.
Part B: Certain Further Terms of the Proposal
5. Kuoni reserves the right to waive all or any of Conditions 3(a) to
(h) inclusive, in whole or in part. Kuoni shall be under no obligation to waive
or treat as satisfied any of Conditions 3(a) to (h) inclusive by a date earlier
than the latest date for the satisfaction of that Condition, notwithstanding
that other of Conditions 3(a) to (h) inclusive may at such earlier date have
been waived or satisfied and that there are at such earlier date no
circumstances indicating that any of such Conditions may not be capable of
satisfaction.
6. Kuoni reserves the right to elect to implement the proposal by way of
a Takeover Offer. In such event, the Takeover Offer will (unless otherwise
agreed) be implemented on the same terms, so far as applicable, as those which
would apply to the Scheme, subject to appropriate amendments to reflect the
change in method of effecting the Proposal, including without limitation, an
acceptance condition set at 90 per cent. (or such lesser percentage, being more
than 50 per cent., as Kuoni may decide) of: (i) the shares to which the offer
relates; and (ii) the voting rights normally exercisable at a general meeting of
Et-china, including, for this purpose, any such voting rights attaching to
Scheme Shares that are unconditionally allotted or issued before the Takeover
Offer becomes or is declared unconditional as to acceptances, whether pursuant
to the exercise of any outstanding subscription or conversion rights or
otherwise.
7. The Takeover Code does not apply to this document, the Proposal or
the Scheme. As such the rules of the Takeover Code, including in particular
Rules 2.7 and 13.4, which would, if the Takeover Code applied, restrict the
ability of Kuoni not to proceed with the Proposal or the Scheme or to invoke a
Condition or fail to waive a Condition, do not apply. However, the parties have
agreed in the Implementation Agreement that Kuoni will pay a break fee of GBP2
million to Et-china if Kuoni invokes (or fails to waive non-satisfaction of) a
Condition so as to cause the Proposal to lapse or to be withdrawn except where
Kuoni invoked the Condition as a result of one of the following circumstances:
(a) a revocation by the issuing authority in the PRC of either the
International Travel Agency Services Operating Permit or the Domestic Travel
Agency Services Operating Permit;
(b) either:
(i) a transfer by any current holder of sufficient shares in any member
of the Et-china Group, to a person outside the Et-china Group (other than where
those shares are to be held by such other person in the same or similar terms as
they are currently held);
(ii) a breach by any holder of shares in any member of the Et-china Group
of any material obligation owed by that shareholder to any member of the
Et-china Group in connection with that shareholding; or
(iii) any relevant government body or authority making an order because of
the Proposal or the announcement of the Proposal;
in each case which has the effect that Et-china is no longer able to control its
material businesses materially on the terms it does so at the date of the
Implementation Agreement;
(c) Et-china takes any action which would, were Et-china to be governed
by the Takeover Code, constitute frustrating action in breach of Rule 21 of the
Takeover Code and which has a material and adverse effect on Et-china or any
member of the Et-china Group (and for these purposes an action shall be
"material" if, when taken together with any other actions falling within
Condition 3(h), it amounts to or exceeds an aggregate amount of GBP100,000), and
in addition the parties have agreed provisions governing how Rule 21 is to apply
in the circumstances of the Proposal given that the Takeover Panel does not have
jurisdiction, following which Kuoni has notified Et-china that it wishes to
withdraw from the Proposal; or
(d) would have allowed Kuoni to invoke a Condition so as to cause the
Proposal not to proceed, to lapse or to be withdrawn under Rule 2.7 or, as
appropriate, Rule 13.4 of the Takeover Code had the Takeover Code applied to the
Proposal.
The break fee is also payable to the Company if a Kuoni Trigger Event occurs and
as a result the Acquisition Effective Date does not occur prior to the Long Stop
Date. The Company has agreed with Kuoni in the Implementation Agreement to pay
an inducement fee of GBP2 million to Kuoni if (1) the Independent Directors fail
to recommend the Proposal unanimously on an unqualified basis in the Acquisition
Document (except where only one of the Independent Directors, not being Matthew
Ng, so fails to recommend the Proposal and either: (i) the Acquisition Effective
Date nevertheless occurs prior to the Long Stop Date or (ii) Kuoni becomes
liable to pay the GBP2 million break fee) or subsequently any of the Independent
Directors withdraws or materially adversely modifies his or her recommendation
(except where only one of the Independent Directors, other than Matthew Ng, so
withdraws or modifies his or her recommendation and either (i) the Acquisition
Effective Date nevertheless occurs prior to the Long Stop Date or (ii) Kuoni
becomes liable to pay the GBP2 million break fee), (2) if an Et-china Trigger
Event occurs and as a result the Acquisition Effective Date does not occur prior
to the Long Stop Date, or (3) if Et-china, in breach of Condition 3(h), takes
any action which would, were Et-china to be governed by the Takeover Code,
constitute frustrating action in breach of Rule 21 of the Takeover Code and
Kuoni notifies Et-china that it wishes to withdraw from the Proposal. The
Implementation Agreement is further described in section 15 of this
announcement.
8. The availability of the Proposal to persons resident in, or citizens
or nationals of, jurisdictions outside of Jersey or the United Kingdom, or to
persons who are custodians, nominees or trustees for citizens or nationals or
residents of jurisdictions outside Jersey or the United Kingdom ("Overseas
Persons") may be prohibited or affected by the laws of the relevant overseas
jurisdictions. Such Overseas Persons should inform themselves about and observe
any applicable requirements.
9. This document and the rights or liabilities arising hereunder, the
Proposal, the Scheme and the Forms of Proxy will be governed by Jersey law and
will be subject to the jurisdiction of the courts of Jersey.
APPENDIX 2
BASES AND SOURCES AND OTHER INFORMATION
1. The value attributed to the entire issued ordinary share capital of
Et-china is based upon 34,970,033 Et-china Shares in issue as at the close of
business on 1 June 2010. The value attributed to the entire issued and to be
issued ordinary share capital of Et-china is based upon the aggregate of:
(a) Et-china Shares in issue (as at close of business on 1 June 2010);
(b) 547,501 Et-china Shares to be issued to certain GZL Executives upon
conversion or re-designation of Et-china A Ordinary Shares;
(c) 5,327,630 Et-china Shares to be issued on the exercise of all share
options currently in issue under the Et-china Share Scheme;
(d) 6,875,000 Et-china Shares to be issued upon conversion of the
outstanding Et-china Convertible Bonds; and
(e) 1,118,014 Et-china Shares to be issued to Matthew Ng in respect of his
current accrued bonus.
The calculation of the value of the entire issued and to be issued ordinary
share capital of Et-china excludes any cash proceeds receivable from the
exercise of options under the Et-china Share Scheme.
2. The financial information for Et-china is extracted from Et-china's
reported accounts for the year ended 31 December 2009.
3. The financial information on Kuoni is extracted from Kuoni's annual
report and accounts for the year ended 31 December 2009.
4. All prices for Et-china Shares have been derived from the AIM
Appendix to the daily official list of the London Stock Exchange and represent
the Closing Price on the relevant date.
5. The market capitalisation of Kuoni is based upon:
(a) 2,868,603 Kuoni Registered Shares B equivalent, calculated as:
(i) 952,000 Kuoni Registered Shares A in issue on 1 June 2010 (5 Kuoni
Registered Shares A are equivalent to 1 Kuoni Registered Share B); plus
(ii) 2,856,000 Kuoni Registered Shares B in issue on 1 June 2010; less
(iii) 177,797 Kuoni Registered Shares B held in treasury; and
(b) the share price of Kuoni Registered Share B as derived from the Swiss
Stock Exchange on the relevant date.
6. The calculation of Kuoni Group's total investment in Et-china
excludes any cash proceeds receivable from the exercise of options under the
Et-china Share Scheme.
APPENDIX 3
DETAILS OF IRREVOCABLE UNDERTAKINGS
A. Directors' irrevocable undertakings
The following directors of Et-china have given irrevocable undertakings as
described in paragraph 8 of this announcement in respect of the number of
Et-china Shares set out below:
+---------------+---------------+---------------+---------------+
| Director | No of issued | Name of | Name of |
| | ordinary | registered | beneficial |
| | shares held | holder | owner |
| | in Offeree | | |
+---------------+---------------+---------------+---------------+
| Matthew | 2,958,310 | Mintpine Pty | Stallion |
| Chik-Hui Ng | | Limited | China Limited |
| | | | (on trust for |
| | | | Matthew Ng |
| | | | and family) |
+---------------+---------------+---------------+---------------+
| Matthew | 582,885 | Matthew | Matthew |
| Chik-Hui Ng | | Chik-Hui Ng | Chik-Hui Ng |
+---------------+---------------+---------------+---------------+
| Matthew | 30,728 | Fong Ping | Fong Ping |
| Chik-Hui Ng | | Chow | Chow |
+---------------+---------------+---------------+---------------+
| Christopher | 1,590,526 | Mintpine Pty | Christopher |
| Rose | | Limited | Peter Rose |
| | | | and on trust |
| | | | for Peter |
| | | | Francis Rose |
+---------------+---------------+---------------+---------------+
| Xiaoping Yang | 213,231 | Xiaoping Yang | Xiaoping Yang |
+---------------+---------------+---------------+---------------+
| Xiaoping Yang | 90,000 | Mintpine Pty | Xiaoping Yang |
| | | Limited | |
+---------------+---------------+---------------+---------------+
+--------------------+--------------------+--------------------+
| Director | No of options over | Name of holder |
| | ordinary shares in | |
| | Offeree | |
+--------------------+--------------------+--------------------+
| Matthew Chik-Hui | 1,667,786 | Matthew Chik-Hui |
| Ng | | Ng |
+--------------------+--------------------+--------------------+
| Xiaoping Yang | 551,723 | Xiaoping Yang |
+--------------------+--------------------+--------------------+
| Robert Drummond | 51,902 | Robert Drummond |
+--------------------+--------------------+--------------------+
B. Shareholder irrevocable undertaking
One other shareholder of Et-china has given an irrevocable undertaking in
respect of Et-china Shares, namely Mintpine, an Australian company which holds
Et-china Shares on trust for certain individuals and other entities. Mintpine's
irrevocable undertaking relates to 10,177,983 Et-china Shares, representing, in
aggregate, approximately 29.1 per cent. of the entire issued ordinary share
capital of Et-china (of which 4,638,836 Et-china Shares in aggregate are held by
Mintpine on trust for Independent Directors of Et-china (and/or their family
trusts), all of which are also covered by the directors' irrevocable
undertakings).
APPENDIX 4
DEFINITIONS
The following definitions apply throughout this announcement unless the context
requires otherwise.
+------------------------+--------------------------------------------+
| Acquisition Document | means (i) if the Scheme is (or is to be) |
| | implemented, the Scheme Document; or (ii) |
| | if the Takeover Offer is (or is to be) |
| | implemented, the Offer Document |
+------------------------+--------------------------------------------+
| Acquisition Effective | means the date upon which (i) the Scheme |
| Date | becomes effective in accordance with its |
| | terms; or (ii) if Kuoni elects to |
| | implement the Proposal by way of a |
| | Takeover Offer, the date that the Takeover |
| | Offer becomes or is declared unconditional |
| | in all respects |
+------------------------+--------------------------------------------+
| Admission Price | means the placing price per Et-china Share |
| | upon Admission of Et-china Shares to |
| | trading on AIM on 3 August 2007 |
+------------------------+--------------------------------------------+
| AIM | means the AIM market operated by the |
| | London Stock Exchange |
+------------------------+--------------------------------------------+
| AIM Rules | means the AIM Rules for Companies |
| | published by the London Stock Exchange, as |
| | amended and enforced from time to time |
+------------------------+--------------------------------------------+
| Business Day | means any day, other than a Saturday or |
| | Sunday, on which banks in London, |
| | Switzerland and China are open for |
| | business (other than solely for trading |
| | and settlement in euros) |
+------------------------+--------------------------------------------+
| CHF | means the lawful currency of Switzerland |
+------------------------+--------------------------------------------+
| Closing Price | means the closing middle market price of |
| | an Et-china Share at the close of business |
| | on a particular trading day as derived |
| | from the AIM Appendix to the daily |
| | official list of the London Stock Exchange |
+------------------------+--------------------------------------------+
| Competing Proposal | means (i) any proposal by a third party |
| | which is not acting in concert with Kuoni |
| | to announce or implement an offer, scheme |
| | of arrangement, merger or business |
| | combination, or similar transaction, the |
| | purpose of which is to enable that third |
| | party (or any other person not being Kuoni |
| | or any member of the Kuoni Group and/or |
| | any person acting in concert with Kuoni) |
| | to acquire a majority of the entire issued |
| | and to be issued ordinary share capital of |
| | Et-china, or as the case may be any |
| | announcement thereof; (ii) any sale, |
| | merger, business combination, demerger or |
| | liquidation (or similar transaction or |
| | arrangement) in respect of the whole or a |
| | material part of the business of Et-china |
| | or the Et-china Group; or (iii) any other |
| | transaction that would preclude or |
| | materially restrict or delay the Proposal |
+------------------------+--------------------------------------------+
| Conditions | means (i) if the Proposal is being |
| | implemented by the Scheme, the conditions |
| | comprising the Scheme Conditions; or (ii) |
| | if the Proposal is being implemented by |
| | way of the Takeover Offer, the conditions |
| | comprising the Takeover Offer Conditions. |
| | The conditions are set out in Appendix 1 |
| | of this announcement and are to be set out |
| | in the Acquisition Document |
+------------------------+--------------------------------------------+
| Court | means the Royal Court of Jersey |
+------------------------+--------------------------------------------+
| Court Hearing | means either the First Court Hearing, the |
| | Second Court Hearing or the Third Court |
| | Hearing as the context requires |
+------------------------+--------------------------------------------+
| Court Meeting | means the meeting of holders of Scheme |
| | Shares (and any adjournment thereof) to be |
| | convened by order of the Court pursuant to |
| | Article 125 of the Jersey Law to consider |
| | and vote on the Scheme (with or without |
| | amendment) and, if required, any meeting |
| | held as a result of an adjournment by |
| | Et-china or a reconvening by the Court |
| | thereof in accordance with the |
| | Implementation Agreement |
+------------------------+--------------------------------------------+
| Court Orders | means the orders of the Court sanctioning |
| | the Scheme under Article 125 of the Jersey |
| | Law and confirming the Et-china Capital |
| | Reduction, and "Court Order" means either |
| | one of them |
+------------------------+--------------------------------------------+
| Credit Suisse | means Credit Suisse Securities (Europe) |
| | Limited |
+------------------------+--------------------------------------------+
| CREST | means the system for the paperless |
| | settlement of trades in securities and the |
| | holding of uncertificated securities |
| | operated by Euroclear in accordance with |
| | the Companies (Uncertificated Securities) |
| | (Jersey) Order 1999 |
+------------------------+--------------------------------------------+
| Domestic Travel Agency | means the Domestic Travel Agency Services |
| Services Operating | Operating Permit, with the permitted |
| Permit | business scope of inbound travel services |
| | and domestic travel services, issued on 18 |
| | November 2009 by the PRC National Tourism |
| | Administration in favour of Guangzhou GZL |
| | International Travel Services Limited |
+------------------------+--------------------------------------------+
| Disclosed | means: (i) fairly disclosed in writing |
| | prior to the date of the Announcement by |
| | Et-china or Et-china's advisers to Kuoni |
| | or to Kuoni's legal or financial or |
| | accounting advisers, or (ii) disclosed by |
| | being publicly announced through a |
| | Regulatory Information Service prior to |
| | the date of the Announcement and |
| | "Disclosure" shall be construed |
| | accordingly |
+------------------------+--------------------------------------------+
| EGM or Extraordinary | means the Extraordinary General Meeting of |
| General Meeting | the Et-china Shareholders to be convened |
| | for the purposes of considering and, if |
| | thought fit, approving certain resolutions |
| | required to implement the Scheme and the |
| | Proposal |
+------------------------+--------------------------------------------+
| Et-china A Ordinary | means the 547,501 A ordinary shares in the |
| Shares | share capital of Et-china which were |
| | issued to certain individuals on 10 March |
| | 2008 and which are convertible into |
| | Et-china Shares on the occurrence of |
| | certain conditions |
+------------------------+--------------------------------------------+
| Et-china Convertible | means such of the GBP5,500,000 in |
| Bonds | aggregate principal amount of Zero Coupon |
| | Convertible Bonds due 2011 issued by |
| | Et-china pursuant to the board minutes, |
| | bond certificates, subscription agreements |
| | and deed of covenant relating to the same |
| | dated on or about 2 May 2008 as are |
| | currently outstanding and currently |
| | convertible into Et-china Shares at a |
| | conversion price of 80 pence per Et-china |
| | Share |
+------------------------+--------------------------------------------+
| Et-china Directors | means the Directors of Et-china |
+------------------------+--------------------------------------------+
| Et-china Group | means Et-china, Guangzhou Et-china |
| | Commerce and Trade Development Co. |
| | Limited, Guangzhou Et-china Travel Agency |
| | Co. Limited, Guangzhou Et-china |
| | Investments and Consulting Limited, |
| | Guangzhou GZL International Travel |
| | Services Limited, Guangdong Sanli Air |
| | Service Co. Limited, Guangzhou Xinzhiye |
| | Commerce and Trade Development Co. |
| | Limited, Guangzhou Yinhailang Air Service |
| | Co. Limited, Guangzhou Yite Information |
| | Services Co. Limited Et-china Holdings |
| | Limited, Et-china.com Limited, Guangdong |
| | CSN-ETC e-commerce Limited, Beijing Yoee |
| | Tixania Air Service Co. Limited, Beijing |
| | Yoee Tixania Travel Agency Co. Limited and |
| | any other body corporate, partnership, |
| | joint venture or person with which |
| | Et-china is associated |
+------------------------+--------------------------------------------+
| Et-china Optionholders | means holders of options granted under the |
| | Et-china Share Scheme |
+------------------------+--------------------------------------------+
| Et-china or the | means Et-china.com International Holdings |
| Company | Limited |
+------------------------+--------------------------------------------+
| Et-china Share Scheme | means the Et-china Discretionary Share |
| | Option Scheme adopted on 25 July 2007 and |
| | 1 July 2009 |
+------------------------+--------------------------------------------+
| Et-china Shareholders | means the holders of Et-china Shares |
+------------------------+--------------------------------------------+
| Et-china Shares | means Ordinary shares of no par value each |
| | in the capital of Et-china (excluding for |
| | the avoidance of doubt any Et-china A |
| | Ordinary Shares) |
+------------------------+--------------------------------------------+
| Et-china Trigger Event | means (i) Et-china failing to take all |
| | steps within its power which are |
| | reasonably appropriate and necessary to |
| | implement the Scheme, or Takeover Offer as |
| | the case may be, so as to bring about the |
| | Acquisition Effective Date prior to the |
| | Long Stop Date (except for any steps that |
| | Kuoni has agreed Et-china need not take or |
| | required Et-china not to take pursuant to |
| | the terms of the Implementation Agreement |
| | or otherwise) and/or (ii) Et-china causing |
| | the Scheme, or Takeover Offer as the case |
| | may be, to lapse or be withdrawn; |
+------------------------+--------------------------------------------+
| Et-china Warrants | means warrants issued pursuant to a |
| | warrant instrument dated 25 July 2007 |
| | executed by Et-china as a deed poll |
| | granting Seymour Pierce a right to |
| | subscribe for 276,528 Et-china Shares |
+------------------------+--------------------------------------------+
| Excluded Shares | means any Et-china Share beneficially |
| | owned by any member of the Kuoni Group or |
| | any Et-china Share held in treasury by |
| | Et-china |
+------------------------+--------------------------------------------+
| First Court Hearing | means the hearing of the Court to, inter |
| | alia, order the convening of the Court |
| | Meeting |
+------------------------+--------------------------------------------+
| Forms of Proxy | means the form of proxy for use at the |
| | Court Meeting and the form of proxy for |
| | use at the Extraordinary General Meeting, |
| | which will accompany the Scheme Document |
+------------------------+--------------------------------------------+
| GZL | means Guangzhou GZL International Travel |
| | Services Limited, a company incorporated |
| | in PRC (or its trade as appropriate) |
+------------------------+--------------------------------------------+
| GZL Executives | means Hong Zheng, Jianxu Lu, Shaodong Zu |
| | and Xiaoang Zhang |
+------------------------+--------------------------------------------+
| Independent Directors | means the Et-china Directors save for |
| | Maria Ng |
+------------------------+--------------------------------------------+
| International Travel | means the International Travel Agency |
| Agency Services | Services Operation Permit, with the |
| Operating Permit | permitted business scope of outbound |
| | travel services, issued on 18 November |
| | 2009 by the PRC National tourism |
| | Administration in favour of Guangzhou GZL |
| | International Travel Services Limited. |
+------------------------+--------------------------------------------+
| Jersey | means the Bailiwick of Jersey, Channel |
| | Islands |
+------------------------+--------------------------------------------+
| Jersey Law | means the Companies (Jersey) Law 1991 as |
| | amended from time to time |
+------------------------+--------------------------------------------+
| Key Licences | means the International Travel Agency |
| | Services Operating Permit and the Domestic |
| | Travel Agency Services Operating Permit |
+------------------------+--------------------------------------------+
| Kuoni | means Kuoni Travel Holding Ltd., a company |
| | incorporated in Switzerland (registered |
| | company number CH-020.3.921.635-3) |
+------------------------+--------------------------------------------+
| Kuoni Executive Board | means Peter Rothwell, Max E. Katz, Leif |
| | Vase Larsen, Stefan Leser and Rolf |
| | Schafroth |
+------------------------+--------------------------------------------+
| Kuoni Group | means the wider corporate group of Kuoni |
| | Travel Holding Ltd. including the |
| | subsidiary undertakings and associated |
| | undertakings of Kuoni Travel Holding Ltd. |
| | and any other body corporate, partnership, |
| | joint venture or person in which Kuoni |
| | Travel Holding Ltd. and such undertakings |
| | (aggregating their interests) have a |
| | direct or indirect interest of 20 per |
| | cent. or more of the voting or equity |
| | capital or the equivalent |
+------------------------+--------------------------------------------+
| Kuoni Interests | means interests of Kuoni in Et-china, |
| | consisting of: |
| | (a)11,540,110 Et-china Shares; and |
| | (b)GBP500,000 in aggregate principal |
| | amount of the Et-china Convertible Bonds |
+------------------------+--------------------------------------------+
| Kuoni Registered Share | means registered shares, Category A, with |
| A | a par value of CHF 0.20 each in the |
| | capital of Kuoni |
+------------------------+--------------------------------------------+
| Kuoni Registered Share | means registered shares, Category B, with |
| B | a par value of CHF 1.00 each in the |
| | capital of Kuoni |
+------------------------+--------------------------------------------+
| Kuoni Trigger Event | means (i) Kuoni failing to take all steps |
| | within its power which are reasonably |
| | appropriate and necessary to implement the |
| | Scheme, or Takeover Offer as the case may |
| | be, so as to bring about the Acquisition |
| | Effective Date prior to the Long Stop Date |
| | (except for any steps that Et-china has |
| | agreed Kuoni need not take or required |
| | Kuoni not to take pursuant to the terms of |
| | the Implementation Agreement or otherwise) |
| | and/or (ii) Kuoni causing the Scheme, or |
| | Takeover Offer as the case may be, to |
| | lapse or be withdrawn, provided that Kuoni |
| | invoking (or failing to invoke |
| | non-satisfaction of) a Condition shall not |
| | be a Kuoni Trigger Event; |
+------------------------+--------------------------------------------+
| London Stock Exchange | means London Stock Exchange PLC |
+------------------------+--------------------------------------------+
| Long Stop Date | means 11.59 p.m. on 30 September 2010 or |
| | such later date as Et-china and Kuoni may |
| | agree |
+------------------------+--------------------------------------------+
| Macquarie | means Macquarie Capital (Hong Kong) |
| | Limited and Macquarie Capital (Europe) |
| | Limited |
+------------------------+--------------------------------------------+
| Meetings | means the Court Meeting and the |
| | Extraordinary General Meeting |
+------------------------+--------------------------------------------+
| Offer Document | means, should Kuoni elects to implement |
| | the Proposal by way of a Takeover Offer, |
| | the document to be posted to Et-china |
| | shareholders and others pursuant to which |
| | the Takeover Offer is made by Kuoni (or |
| | such other entity as it may elect) |
+------------------------+--------------------------------------------+
| Offer Period | means the period starting on the date of |
| | this announcement and ending on the |
| | Acquisition Effective Date |
+------------------------+--------------------------------------------+
| Offer Price | means 115 pence per Et-china Share |
+------------------------+--------------------------------------------+
| Pence or GBP | means the lawful currency of the United |
| | Kingdom |
+------------------------+--------------------------------------------+
| PRC or China | means the People's Republic of China |
+------------------------+--------------------------------------------+
| PRC Authorities | means the central, provincial, and local |
| | governments of all levels in the PRC, |
| | including the PRC Licensing Authorities, |
| | all the ministries, departments, |
| | commissions, bureaus and branches of |
| | national, provincial, county or other |
| | administrative level |
+------------------------+--------------------------------------------+
| PRC Licensing | means the Guangzhou Tourism Bureau, the |
| Authorities | Guangdong Province Tourism Bureau, the |
| | National Tourism Bureau, the China Air |
| | Travel Association, the South-China |
| | Regional Representative Office of the |
| | China Air Transport Association and the |
| | Guangdong Province Communication |
| | Administration |
+------------------------+--------------------------------------------+
| Pre existing | means certain existing arrangements and |
| Obligation | proposals of the Et-china Group prior to |
| | the date of this Announcement as described |
| | in the Implementation Agreement |
+------------------------+--------------------------------------------+
| Proposal | means the proposed cash acquisition by |
| | Kuoni of the entire issued and to be |
| | issued ordinary share capital of the |
| | Company not already owned by Kuoni |
| | (excluding, for the avoidance of doubt, |
| | any Et-china A Ordinary Shares) proposed |
| | to be implemented by means of the Scheme |
| | (and other matters to be considered at the |
| | Meetings) or, if Kuoni should so elect, by |
| | means of a Takeover Offer |
+------------------------+--------------------------------------------+
| Reduction Court Order | means the order of the Court, granted at |
| | the Third Court Hearing, confirming the |
| | Reduction of Capital |
+------------------------+--------------------------------------------+
| Reduction of Capital | means the reduction of share capital of |
| | Et-china associated with the cancellation |
| | and extinguishing of the Scheme Shares |
| | provided for by the Scheme under Article |
| | 61 of the Jersey Law |
+------------------------+--------------------------------------------+
| Registrar of Companies | means the Registrar of Companies for |
| | Jersey |
+------------------------+--------------------------------------------+
| Regulatory Information | means any of the services set out in |
| Service | Appendix 3 to the Listing Rules |
+------------------------+--------------------------------------------+
| Relevant Authority | means any central bank, ministry, |
| | governmental, quasi-governmental, |
| | supranational, statutory, regulatory, |
| | administrative or investigative body or |
| | authority (including any national or |
| | supranational antitrust, competition or |
| | merger control authority or similar |
| | authority), national, state, provincial, |
| | municipal, county or local government |
| | (including any subdivision, court, |
| | administrative agency, bureau or |
| | commission or other authority thereof), |
| | government department, private body |
| | exercising any regulatory, taxing, |
| | importing or other authority, court, |
| | agency (including trade agency), |
| | association, institution or professional |
| | or environmental body or (without |
| | prejudice to the generality of the |
| | foregoing) any other such person or body |
| | whatsoever in any jurisdiction |
+------------------------+--------------------------------------------+
| Resolutions | means the resolutions proposed to be |
| | passed at the Extraordinary General |
| | Meeting |
+------------------------+--------------------------------------------+
| RMB | means the lawful currency of the People's |
| | Republic of China |
+------------------------+--------------------------------------------+
| Scheme | means the scheme of arrangement proposed |
| | to be made under Part 18A of the Jersey |
| | Law between Et-china and the holders of |
| | the Scheme Shares in connection with the |
| | Proposal with or subject to any |
| | modification, addition or condition |
| | approved or imposed by the Court and |
| | agreed to by Et-china and Kuoni |
+------------------------+--------------------------------------------+
| Scheme Court Order | means the order of the Court, granted at |
| | the Second Court Hearing, sanctioning the |
| | Scheme under Article 125 of the Jersey Law |
+------------------------+--------------------------------------------+
| Scheme Document | means, if the Proposal is implemented by |
| | way of the Scheme, the document to be |
| | dispatched to Et-china Shareholders and |
| | others by Et-china containing, amongst |
| | other things, the Scheme Conditions and |
| | other relevant terms and conditions, a |
| | description of the Scheme, certain |
| | information about Kuoni and Et-china and |
| | the notices of the Meetings and, where the |
| | context so permits, includes any form of |
| | proxy, election, notice, court document, |
| | meeting advertisement or other document |
| | required in connection with the Scheme |
+------------------------+--------------------------------------------+
| Scheme Record Time | 6.00 p.m. (Jersey time) on the Business |
| | Day immediately before the Third Court |
| | Hearing |
+------------------------+--------------------------------------------+
| Scheme Shareholder | means a holder of Scheme Shares from time |
| | to time |
+------------------------+--------------------------------------------+
| Scheme Shares | means Et-china Shares: |
| | (a) in issue at the date of the |
| | Scheme; |
| | (b) issued after the date of the |
| | Scheme and prior to the voting record time |
| | in respect of the Court Meeting, if any; |
| | and |
| | (c) issued on or after the voting |
| | record time in respect of the Court |
| | Meeting and at or prior to the record time |
| | for the Reduction of Capital in respect of |
| | which the original or any subsequent |
| | holders thereof are bound by the Scheme or |
| | in respect of which the holder thereof |
| | shall have agreed in writing to be bound |
| | by the Scheme, if any, |
| | in each case other than the Excluded |
| | Shares, if any; |
+------------------------+--------------------------------------------+
| Scheme Voting Record | means 6.00 p.m. (Jersey time) on the day |
| Time | that is two days before the date of the |
| | Court Meeting or, if the Court Meeting is |
| | adjourned, 6.00 p.m. (Jersey time) on the |
| | second day before the day of such |
| | adjourned Court Meeting |
+------------------------+--------------------------------------------+
| Second Court Hearing | means the hearing of the Court to sanction |
| | the Scheme |
+------------------------+--------------------------------------------+
| Seymour Pierce | means Seymour Pierce Limited |
+------------------------+--------------------------------------------+
| Takeover Code | means the UK City Code on Mergers and |
| | Takeovers as amended from time to time |
+------------------------+--------------------------------------------+
| Takeover Offer | means, should Kuoni elect to effect the |
| | Proposal by way of a takeover offer, the |
| | takeover offer to be made by Kuoni for the |
| | Et-china Shares on the terms and subject |
| | to the conditions to be set out in the |
| | related offer document and form of |
| | acceptance including, where the context |
| | requires, any subsequent revision, |
| | variation, extension or renewal thereof |
+------------------------+--------------------------------------------+
| Third Court Hearing | means the hearing of the Court to confirm |
| | the Reduction of Capital |
+------------------------+--------------------------------------------+
| UK or United Kingdom | means the United Kingdom of Great Britain |
| | and Northern Ireland |
+------------------------+--------------------------------------------+
| US$ | means the lawful currency of the United |
| | States of America |
+------------------------+--------------------------------------------+
| Wholly owned Et-china | means any company which is directly or |
| subsidiary | indirectly wholly owned by Et-china |
+------------------------+--------------------------------------------+
All references to time in this announcement are to London time unless otherwise
stated.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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