Zhejiang New Century Hotel Dispatches Privatization Composite Document

Independent Financial Advisor and Independent Board Committee Recommend Shareholders to Accept the Offer

HONG KONG SAR – Media OutReach – 19 March 2021 – Zhejiang New Century Hotel Management Co.,
Ltd. (the “Company”, HKEx stock code: 1158) received a voluntary
conditional offer made by Kunpeng Asia Limited (“the Offeror”) to acquire all the
issued H Shares and Domestic Shares of the Company (except for the shares held
by the shareholders who have undertaken not to accept the offers). The
Composite Document concerning the privatization and delisting proposal has been
dispatched by the Company today. Pursuant to the document, the consideration
for H Share Offer and Domestic Share Offer are HK$18.15 and RMB15.180660 per
share, respectively, representing a premium of approximately 24.7% over the H
Share closing price of HK$14.56 as quoted on the Stock Exchange on the Last Trading
Date (18 Jan 2021).

 

Amongst other things, the H Share Offer is
subject to the approval by independent H shareholders in the H Share Class
Meeting and the extraordinary general meeting (the “EGM”), as well as a minimum
acceptance rate of the H Share Offer being at least 90% of the H Shares held by
Independent H Shareholders. The Domestic Share Offer is conditional upon the H
Share Offer becoming unconditional.

 

In respect of the H Share Offer, independent H
shareholders including GreenTree Hospitality Group Ltd., Rongtong Fund
Management Co., Ltd, GEM Holdings Ltd., and Rex Top Global Investments Ltd.
have entered into the irrevocable undertakings in favour of the Offeror,
representing approximately 62.73% of the H Shares held by Independent H
Shareholders. Pursuant to such irrevocable undertakings, the relevant independent
H Shareholders have irrevocably agreed and undertaken to, among other things,
accept the H Share Offer and support the delisting.

 

The H Share Class Meeting and the EGM will be held
on 13 April 2021 to seek for shareholders’ approval on the privatization and
delisting proposal. The first closing date of the H Share Offer is 19 April
2021, while the final closing date will be on 17 May 2021 (assuming the Offers
have become unconditional in all respects on the first closing date).

 

Pursuant to the Composite Document, Somerley
Capital Limited (“Somerley Capital”), the Independent Financial Advisor
(“IFA”), considers that the privatization and the delisting, coupled with the
Offers, are fair and reasonable and in the interests of independent shareholders.
In arriving at this conclusion, Somerley Capital has taken into consideration
various factors including the impact of COVID-19 on the hotel industry, the
Offer price’s premium to the current market price of H Shares and Company net
assets, that the Offer provides an opportunity for Independent H Shareholders
to realize their investments in the Company in light of the Company’s generally
low trading volume, as well as relevant precedents and other comparables. The
Independent Board Committee, having considered the advice of the IFA, concurs
with the recommendation and would recommend the independent H Shareholders to
accept the H Share Offer and voting in favour of the resolutions approving the delisting.  

 

Offer
Highlights:

H Share Offer Price	For each H Share HK$18.15 in cash
Premium	A premium of approximately 10.0% over the offer price of HK$16.50 per H Share for the global offering of the H Shares in March 2019; A premium of approximately 24.7% over HK$14.56 which is the closing price per H Share as quoted on the Stock Exchange on the Last Trading Date; A premium of approximately 27.7% over HK$14.21 which is the average closing price per H Share as quoted on the Stock Exchange for the 180 trading days up to and including the Last Trading Date
Timetable	Latest time for lodging transfers of the H Shares in order to be entitled to attend and vote at the H Share Class Meeting and the EGM	7 April 2021, 4:30 p.m.
	H Share Class Meeting	13 April 2021, 10:00 a.m.
	EGM	13 April 2021, 11:00 a.m. (or immediately after the conclusion or adjournment of the H Share Class Meeting)
	First Closing Date	19 April 2021
	Latest time for acceptances of the H Share Offer on the First Closing Date	19 April 2021, 4:00 p.m.
	Final Closing Date (assuming the Offers have become unconditional in all respects on the First Closing Date)	17 May 2021