This Circular Is Important and Requires Your Immediate Attention
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THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer or other registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser for independent advice. If you have sold or transferred all your shares in Lai Sun Development Company Limited, you should at once hand this circular with the accompanying form of proxy to the purchaser(s) or transferee(s) or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s). Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular. This circular appears for information purposes only and is not intended to and does not constitute, or form part of, any offer to purchase or subscribe for or an invitation to purchase or subscribe for any securities of LSG, LSD, eSun or Lai Fung or the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities of LSG, LSD, eSun or Lai Fung in any jurisdiction in contravention of applicable law or regulation. (1) POSSIBLE VERY SUBSTANTIAL ACQUISITION AND CONNECTED TRANSACTION (2) CONDITIONAL VOLUNTARY GENERAL CASH OFFER BY HSBC ON BEHALF OF THE OFFEROR, A WHOLLY-OWNED SUBSIDIARY OF LSD, TO ACQUIRE ALL OF THE ISSUED SHARES OF eSUN (OTHER THAN THOSE ALREADY OWNED OR AGREED TO BE ACQUIRED BY LSD, THE OFFEROR OR THEIR RESPECTIVE SUBSIDIARIES) AND TO CANCEL ALL THE OUTSTANDING SHARE OPTIONS OF eSUN (3) POSSIBLE UNCONDITIONAL MANDATORY GENERAL CASH OFFER BY HSBC ON BEHALF OF THE OFFEROR, A WHOLLY-OWNED SUBSIDIARY OF LSD, TO ACQUIRE ALL OF THE ISSUED SHARES OF LAI FUNG (OTHER THAN THOSE ALREADY OWNED OR AGREED TO BE ACQUIRED BY LSD, THE OFFEROR, eSUN OR THEIR RESPECTIVE SUBSIDIARIES) AND TO CANCEL ALL THE OUTSTANDING SHARE OPTIONS OF LAI FUNG (4) NOTICE OF GENERAL MEETING Financial Adviser to LSD and the Offeror Independent Financial Adviser Capitalised terms used in the lower portion of this cover page shall have the respective meanings as those defined in the section headed “Definitions” in this circular. A letter from the board of directors of Lai Sun Development Company Limited (“Company”) is set out on pages 11 to 43 of this circular. The notice convening the general meeting of the Company (“General Meeting”) to be held at Harbour View Rooms I & II, 3rd Floor, The Excelsior, Hong Kong, 281 Gloucester Road, Causeway Bay, Hong Kong on Wednesday, 8 August 2018 at 12:00 noon (or, if later, immediately following the conclusion of the relevant general meeting of LSG) is set out on pages GM-1 to GM-2 of this circular. Shareholders of the Company are advised to read the notice of the General Meeting and if you are not able to attend the General Meeting or any adjournment thereof (as the case may be) in person but wish to exercise your right as a shareholder of the Company, please complete, sign and return the form of proxy in accordance with the instructions printed thereon and deposit the same with the Company’s share registrar, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible, but in any event not less than 48 hours before the time appointed for holding the General Meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the General Meeting or any adjournment thereof should you so wish. Hong Kong, 23 July 2018 CONTENTS Page number DEFINITIONS .................................................................................................................... 1 LETTER FROM THE BOARD ........................................................................................ 11 LETTER FROM THE LSD INDEPENDENT BOARD COMMITTEE ....................... 44 LETTER FROM RED SUN ............................................................................................... 45 Appendix I — Financial Information of the Group .................................................. I-1 Appendix II — Financial Information of the eSun Group......................................... II-1 Appendix III — Financial Information of the Lai Fung Group ................................. III-1 Appendix IV — Management Discussion and Analysis of the Group ........................ IV-1 Appendix V — Management Discussion and Analysis of the eSun Group .............. V-1 Appendix VI — Management Discussion and Analysis of the Lai Fung Group ....... VI-1 Appendix VII — Unaudited Pro Forma Financial Information of the Enlarged Group .................................................................... VII-1 Appendix VIII — Valuation on the Property Interests of the eSun Group .................. VIII-1 Appendix IX — General Information ........................................................................... IX-1 NOTICE OF GENERAL MEETING ............................................................................... GM-1 ACCOMPANYING DOCUMENT: FORM OF PROXY This circular in both English and Chinese is available in printed form and published on the respective websites of the Company at “http://www.laisun.com” and Hong Kong Exchanges and Clearing Limited at “http://www.hkexnews.hk”. The English version will prevail in case of any inconsistency between the English and the Chinese versions of this circular. – i – DEFINITIONS In this circular, the following expressions have the following meanings unless the context requires otherwise: “Announcement Date” means 27 May 2018, being the date of the Joint Announcement; “associate” has the meaning ascribed to it under the Takeovers Code; “Board” means the board of Directors; “close associates” has the meaning ascribed to it under the Listing Rules; “Companies Act” means the Companies Act 1981 of Bermuda; “Companies Ordinance” means the Companies Ordinance (Chapter 622 of the Laws of Hong Kong); “Conditions” means the conditions to the eSun Share Offer, as set out under section 7 “Conditions to the eSun Offers” of the Letter from the Board in this circular; “CT Resolution” means the ordinary resolution to be proposed at the General Meeting to approve the making of the Share Offers to the Yu Shareholders as a connected transaction; “Directors” means the directors of LSD; “disclosures of interests” means disclosures of interests pursuant to Part XV of the SFO and the disclosure of dealings pursuant to Rule 22 of the Takeovers Code; “Disinterested eSun Shareholders” means the holders of the Disinterested eSun Shares. For the avoidance of doubt, the Disinterested eSun Shareholders include (1) any member of the HSBC Group in respect of eSun Shares of its non-discretionary investment clients where such client (a) has control over whether to tender acceptances to the eSun Share Offer in respect of those eSun Shares, (b) if acceptances of the eSun Share Offer in respect of those eSun Shares are to be tendered, gives instructions to tender them, and (c) is not the Offeror, LSD or any of the other Offeror Concert Parties, (2) the Yu Shareholders and (3) SAIF Partners; “Disinterested eSun Shares” means the eSun Shares other than those owned by the Offeror or any of the Offeror Concert Parties; – 1 – DEFINITIONS “Disinterested Lai Fung means the holders of the Disinterested Lai Fung Shares. For the Shareholders” avoidance of doubt, the Disinterested Lai Fung Shareholders include (1) any member of the HSBC Group in respect of Lai Fung Shares of its non-discretionary investment clients where such client (a) has control over whether to tender acceptances to the Lai Fung Share Offer in respect of those Lai Fung Shares, (b) if acceptances of the Lai Fung Share Offer in respect of those Lai Fung Shares are to be tendered, gives instructions to tender them, and (c) is not the Offeror, LSD or any of the other Offeror Concert Parties and (2) the Yu Shareholders; “Disinterested Lai Fung Shares” means the Lai Fung Shares other than those owned by the Offeror or any of the Offeror Concert Parties; “Dr. Peter Lam” means Dr. Lam Kin Ngok, Peter, an Offeror Director, a deputy chairman and an executive director of LSG, the chairman and an executive director of LSD, the chairman and an executive director of MAGHL and the ultimate controlling shareholder of LSG, LSD and the Offeror; “Enlarged Group” means the Company and its subsidiaries upon completion of the Offers, which will include the eSun Group; “eSun” means eSun Holdings Limited (豐德麗控股有限公司), a company incorporated in Bermuda with limited liability, the issued shares of which are listed and traded on the Main Board of the Stock Exchange (Stock Code: 571); “eSun Composite Document” means the composite offer and response document to be issued by or on behalf of the Offeror and eSun to the eSun Shareholders and the eSun Optionholders in accordance with the Takeovers Code in relation to the eSun Offers; “eSun Group” means eSun and its subsidiaries (including, for the avoidance of doubt, the Lai Fung Group); “eSun Offer Shares” means the eSun Shares which are subject to the eSun Share Offer; “eSun Offers” means the eSun Share Offer and the eSun Option Offer; “eSun