Weiqiao Textile (02698): Jointly Announced By The Offeror Shandong Weiqiao Textile Technology Co., Ltd

Weiqiao Textile (02698) and the offeror Shandong Weiqiao Textile Technology Co., Ltd. jointly announced that on December 4, 2023, the offeror and the company entered into a merger agreement, according to which the offeror and the company will implement the merger according to the terms and conditions of the merger agreement (including preconditions and such conditions). After the completion of the merger, the company will merge with the offeree in accordance with the Chinese Company Law and other applicable Chinese laws.

According to the merger agreement, after the preconditions and these conditions are reached (or exempted, if applicable), the offeror will pay HK $3.50 per H share to H share holders for cancellation of H shares and a cancellation price of RMB 3.180870 per domestic share to domestic share holders for cancellation of domestic shares. The cancellation price of HK $3.50 per H share is about 104.68% higher than the closing price of HK $1.710 per H share on November 24, 2023 (the last trading day).

After the merger is completed, the offeror will undertake all assets, liabilities, interests, businesses, employees, contracts and all other rights and obligations of the company, and the company will eventually cancel its registration.

Based on the cancellation price of HK $3.50 per H share and RMB 3180870 per domestic share, 414 million H shares and 781 million domestic shares have been issued on the date of this joint announcement, and the cancellation price of 758 million domestic shares directly held by Weiqiao Venture will be paid through the registered capital of the offeror, The total cancellation price to be paid by the offeror for the cancellation of domestic shares held by domestic shareholders of H shares held by H shareholders is 1.448 billion Hong Kong dollars and about 72.8432 million yuan respectively.

Weiqiao Venture (Hong Kong) has promised the offeror that it will pay the total consideration for cancellation of H shares on its behalf (if necessary). The total consideration will be paid by internal cash resources and/or external debt financing.

According to the announcement, the reasons and benefits of the merger include: the company's performance is under pressure due to the impact of the macro environment and industry development trend; The company has lost its advantages as a listing platform, and its equity financing capacity is limited; An excellent exit opportunity for H shareholders to sell illiquid H shares at an attractive premium.

In addition, the Company has applied to the Stock Exchange for resumption of trading of H shares from 9:00 a.m. on December 5, 2023.