Futu Securities News app reports that Tontine Wines (00389) announced that on June 12, 2024, the offeror Mr. Wang He notified the offeree publicly that he has a definite intention to make a partial offer (in accordance with the Takeovers Code) to acquire 30.16 million outstanding shares in the offeree at an offer price of HKD0.6 per offer share (representing approximately 10.00% of the issued share capital of the offeree as at the date of this announcement), which the offeror and his concert parties do not already own.

As of the date of this announcement, the offeror and his concert parties have no interest, whether direct or indirect, in any share, convertible securities, warrants or options to subscribe for shares or any derivative instruments relating to any of these securities in the offeree entitling them to exercise the voting rights attaching to such securities.

The offer price of HKD0.6 per offer share represents neither a premium nor a discount to the closing price of HKD0.6 per share as at June 12, 2024.

It is reported that the offeror is a Chinese businessman whose business covers manufacturing of automobile parts, venture capital and private equity investments. He worked as a research analyst for the Investment Banking Department of ICBC International in 2015 and established Bohan Investment (Shenzhen) Co., Ltd., an investment company in Shenzhen, China, in 2017, with about 10 years of experience in venture capital and finance. He is currently the controlling shareholder, executive director and general manager of Bohan Investment (Shenzhen) Co., Ltd., which was founded in China in 2017 and is mainly engaged in investment businesses, directly and indirectly investing in more than ten high-tech enterprises, including private and public companies, such as BYD Semiconductor Co., Ltd., Hefei Crystal Integrated Circuit Co., Ltd. (688249.SH), Shenzhen Haopeng Technology Co., Ltd. (001283.SZ), Shenzhen Xinyu Hitech Co., Ltd. (688573.SH), Guizhou Anda Energy Technology Co., Ltd. (BSE stock code: 830809), Beijing Kezhikang Technology Co., Ltd., Leso intelligent technology (Suzhou) Co., Ltd., Shenzhen Ruishi Intelligent Technology Co., Ltd., Anhui Huachuang new materials Co., Ltd. and Beijing Guanqiao Medical Technology Co., Ltd. In addition to the above, the offeror currently does not hold any other listed securities and is not involved in any other Hong Kong listed companies.

The offeror holds an optimistic attitude towards the transformation of the offeree and will extend the production and sales of red wine to baijiu, as well as his cooperation with Luzhou Laojiao Xinjiu Co., Ltd. He hopes to introduce some wine resources and high-quality wine assets to improve the operating quality of the offeree. He has invested in the consumer goods industry for several years and has invested in Le's Culture Co., Ltd., a chain of amusement parks that focuses on creating interactive indoor playgrounds for children. Its headquarters is located in Shenzhen, Guangdong Province. Its business covers theme parks, parent-child entertainment, leisure and catering, electronic games, animation and trendy entertainment, etc. In order to diversify his investments, the offeror hopes to expand his investment to the wine industry. If the partial offer is completed, he will consider exploring new opportunities for the offeree in the wine business, eventually achieving the offeree's long-term sustainable development and creating additional value for himself and other shareholders. After the partial offer is completed, the offeror will become the third largest shareholder of the offeree, and can introduce or refer experienced and knowledgeable employees and management to the board of directors and management of the offeree, as well as introduce or refer business or sales to the offeree. With the offeror's investment experience and business network, he hopes to contribute to the offeree's long-term sustainable development and create value for himself and other shareholders. The offeror also holds an optimistic attitude towards China's liquor industry. He believes that after the outbreak of COVID-19, China's social activities and diet habits have gradually returned. He believes that the offeree will eventually achieve higher sales targets, enter the top 20 domestic baijiu companies and become one of the most valuable baijiu companies in China.

The offeror has several investment experiences in the consumer goods industry and has invested in Le's Culture Co., Ltd., a chain of amusement parks that focuses on creating interactive indoor playgrounds for children. Its headquarters is located in Shenzhen, Guangdong Province. Its business covers theme parks, parent-child entertainment, leisure and catering, electronic games, animation and trendy entertainment, etc. In order to diversify his investments, the offeror hopes to expand his investment to the wine industry. If the partial offer is completed, he will consider exploring new opportunities for the offeree in the wine business, eventually achieving the offeree's long-term sustainable development and creating additional value for himself and other shareholders. The offeror has invested in securities mainly in China's stock market, with a focus on consumer, technology, banking, and other sectors such as BYD Company Limited, Semiconductor Manufacturing International Corporation, Tencent Holdings Limited, China Construction Bank Corporation, etc.

However, the offeror believes that the assets of the target company are valuable because as of December 31, 2023, the target company had a bank and cash balance of approximately RMB 95.5 million. Based on the performance of incurring losses for the year ended on December 31, 2023, the offeror believes that such circumstances have caused a decline in share prices over the past year. According to the assessor of the offeror, the market price of the shares is undervalued, because the closing price on the last trading day was discounted by about 59.5% from the net asset value per share as of December 31, 2023. Therefore, the offeror believes that the partial tender offer is a good opportunity to acquire the shares of the target company and its assets are valuable. After considering the financial resources required for the partial tender offer, the offeror intends to acquire approximately 10.00% of the issued share capital of the target company. However, due to the low liquidity, the offeror finds it difficult to purchase such quantity of shares in the open market. Therefore, the offeror proposes to launch a partial tender offer for investment purposes. The offeror and its concerted action parties also propose that the partial tender offer can demonstrate their confidence in the prospect of the target group.

In addition, the low liquidity of shares makes it difficult for shareholders to sell a large number of shares in the market without adversely affecting the share price. The partial tender offer provides shareholders with an opportunity to cash out their investment in the target company for attractive prices, without causing any downward pressure on the stock price.