Capital Grand (01329.HK) announced on October 28, 2024, that the offeror (First Strategic Investment Holdings Limited) requested the board of directors to propose privatizing the company to the planned shareholders in accordance with Article 86 of the Company Law through an agreement, involving the cancellation of planned shares and (as a consideration) paying the cancellation price of each planned share in cash to the planned shareholders, as well as delisting the shares from the Stock Exchange. The plan will involve all planned shares being cancelled, with a cash cancellation price of HK$0.85 per planned share. The cash cancellation price of HK$0.85 per planned share represents a premium of approximately 46.55% over the closing market price of HK$0.58 per share on the last trading day on the Stock Exchange.

If the plan is approved, effective, and implemented, all issued shares will be indirectly wholly owned by the offeror's ultimate parent company, First Strategic Group.

According to Rule 2.8 of the Takeovers Code, the board of directors has set up an Independent Directors Committee composed of all non-executive directors (Zhai Senlin, Yang Zhida, Huang Wei, and Xu Weiguo) who have no direct or indirect interests in the proposal other than as shareholders, to consider the advice and recommendations of independent financial advisors. After considering the opinions and recommendations of the independent financial advisors, (i) they will provide recommendations to disinterested shareholders regarding the fairness and reasonableness of the proposal and the plan at the court meeting and extraordinary general meeting of the company, and (ii) they will give a recommendation regarding the fairness and reasonableness of the perpetual convertible securities offering and whether to accept the perpetual convertible securities offer to the holders of perpetual convertible securities. Since Wang Hao and Qin Yi (both non-executive directors) hold various positions at First Strategic Group and/or Citydev Group (the offeror's parent company), Wang Hao and Qin Yi are not members of the Independent Directors Committee.

The board of directors (approved by the Independent Directors Committee) has appointed Hengbo Capital Limited as the Independent Financial Advisor to provide advice to the Independent Directors Committee on the proposal, the plan, and the perpetual convertible securities offering in accordance with Rule 2.1 of the Takeovers Code.

Upon the effectiveness of the plan, all planned shares will be cancelled, and any share relating to the planned shares will no longer have the effect of ownership documents or certificates. The company will apply to the Stock Exchange for the delisting of the shares from the Stock Exchange in accordance with Rule 6.15(2) of the Listing Rules, which will take effect after the plan becomes effective.

The company has applied to the Stock Exchange for the resumption of trading of its shares on the Stock Exchange from 9:00 a.m. on Tuesday, October 29, 2024.