Tender Offer and De-listing from AIM

    RNS Number : 4590G
  EBT Mobile China PLC
  22 October 2008
   

    22 October 2008
    EBT Mobile China plc
    ("EBT" or the "Company")

    Proposed Tender Offer at 6 pence per Ordinary Share and De-listing from AIM

    Cancellation of admission of Ordinary Shares to trading on AIM
    Authority to purchase Ordinary Shares
    Reduction of capital
    Adoption of new articles of association
    Tender offer by Panmure Gordon to purchase Ordinary Shares
    Notice of General Meeting

    EBT Mobile China plc announces that it is today posting a circular to shareholders regarding a proposed Tender Offer for Ordinary
Shares, a De-listing from AIM and other related matters.  The proposed Tender Offer applies to a maximum of approximately 10.0% of the
Company's current issued share capital and the price at which the Tender will be undertaken is 6 pence per Ordinary Share.  A Shareholder
General Meeting is called for 14 November 2008 to consider the Proposals which are contained in the Circular.

    The Company has received irrevocable commitments from Shareholders representing 72.3% of the current issued share capital to vote in
favour of the Proposals.

    In order to effect the Tender Offer, the Company will need to apply to the Court for the approval of the reduction of its share capital
by way of cancellation of its share premium account and of its deferred share capital.  Accordingly completion of the Tender Offer is
conditional, amongst other things, upon the approval of the Court.    

    Shareholders should note that if, for any reason the Capital Reduction does not take place by 5.00pm on 30 December 2008, the Board
intends to continue with the De-listing.

    Capitalised terms in this announcement follow the same definitions as in the Circular unless otherwise specified.

    The key points of the Circular are summarised as follows: 

    Introduction

    *     On 27 August 2008 the Company announced it was considering the feasibility and desirability from a shareholder perspective of a
partial tender offer for some of the Company's shares not already owned by certain major Shareholders (principally Audley European
Opportunities Master Fund Limited, certain funds managed by Gartmore Investment Limited, James Reiman, EBT's Chairman, and certain senior
management accounting for 62.6 per cent. of the current issued share capital of the Company).  

    *     Prior to this, the Company had received an indicative offer approach which has not culminated in an offer being made, as well as a
number of other preliminary expressions of interest which the Board, having duly considered them, did not deem to be in the best interests
of shareholders.

    *     Having carefully considered, together with its advisers, the current position including recent feedback from major shareholders
the Company now proposes to: 

    *     purchase Ordinary Shares by way of the Tender Offer;


    *     apply to the Court for the reduction of its share capital by way of cancellation of its share premium account and cancellation of
its deferred share capital; and 


    *     cancel the admission of its Ordinary Shares to trading on AIM.


    Current Trading
    *     EBT has faced a tougher trading environment since the second half of 2007. The Board adjusted the Company's strategy at that time
from a focus on an aggressive expansion programme to drive volume, to one focused upon operational improvements to enhance margins.

    *     The Group has made progress in improving its overall operating performance during the first half of 2008 and expects to make a
modest adjusted profit in the second half of the year.

    *     EBT believes that the outlook for the Chinese mobile phone market remains positive and will continue to grow its store footprint
selectively in the world's largest wireless telecommunications market.

    *     Leading wireless providers are set to invest heavily to provide 3G services, the introduction of which, while subject to uncertain
timing, is expected to provide substantial additional growth opportunities in due course.

    *     While the near-term operating environment remains challenging, the Board considers its operational systems and profit focused
strategy to be appropriate to consolidating the Group's position and preparing for future expansion and economic recovery.

    *     The Board retains a positive outlook and believes EBT is well placed to become China's leading end to end provider of wireless
products and services. 


    De-listing
    *     The Directors believe that the development of the business, in terms of store footprint, strategic partnerships and underlying
operational infrastructure, and the growth potential of the Chinese mobile telephony market and the strength of the Company's management
team have not been adequately reflected in the value attributed by the public market. 

    *     In response to a preliminary approach received in December 2007, the Board initiated a strategic review in order to consider the
options available to help create and/or realise value in the business. In addition to the initial approach, a number of other preliminary
expressions of interest in various forms were declared. 

    *     Discussions with these third parties did not reach a conclusion that the Board considered to be in the best interests of
shareholders.

    *     The Board concluded that the best option would be for the Company to de-list and continue its growth trajectory away from the
public market, at least in the near term.

    *     De-listing is subject to shareholder approval.  The Company and Panmure Gordon have received irrevocable undertakings from
shareholders holding 160,275,948 Ordinary Shares, representing 72.3 per cent of the current issued ordinary share capital to vote in favour
of the De-listing. 


    Tender Offer
    *     The Board recognises that not all shareholders will be able or willing to continue to own shares in the Company following the
De-listing. 

    *     Therefore a Tender Offer is to be effected by Panmure Gordon purchasing Tender Offer Shares as principal and then selling such
Tender Offer Shares on the London Stock Exchange to the Company for cancellation.  

    *     Under the Tender Offer a maximum of 22,170,089 Ordinary Shares may be purchased, representing approximately 10.0 per cent. of the
issued ordinary share capital at a price of 6 pence per Ordinary Share, for a maximum aggregate cash consideration of £1.33 million. 

    *     The price of 6 pence per share represents the closing mid-market price as derived from the AIM section of the London Stock
Exchange Daily Official List on 21 October 2008 (being the latest practicable date before the Company's announcement of the Proposals on 22
October 2008).

    *     The Company and Panmure Gordon have received irrevocable undertakings from the Directors and other shareholders holding
138,686,145 Ordinary Shares in aggregate, representing 62.6 per cent of the current issued ordinary share capital of the Company, that they
will not accept or procure the acceptance of the Tender Offer in respect of a total of 133,784,563 Ordinary Shares. 

    *     A Tender Offer Shareholder may tender some, all, or none of their holdings. The Tender Offer will enable equally all Tender Offer
Shareholders (excluding those having irrevocably committed not to accept or procure acceptance of the Tender Offer), to sell a certain
minimum per cent of their holding of Tender Offer Shares (the "Basic Entitlement").

    *     Tender Offer Shareholders with valid individual tenders greater than the Basic Entitlement Amount will be satisfied to the extent
that other eligible Shareholders tender less than their Basic Entitlement Amount or do not tender any shares.  

    *     In the event that more than 22,170,089 Tender Offer Shares are tendered, tenders in excess of the Basic Entitlement Amount will be
scaled back, subject to any preference given to smaller Shareholders at the absolute discretion of the Company. 

    *     Although it is not possible to know the future behaviour of Shareholders able to participate in the Tender Offer, it is possible,
given certain assumptions and the irrevocable commitments signed by certain parties, to estimate that the Basic Entitlement would be
approximately 19.9 per cent. of individual share holdings.

    *     The above estimate of the Basic Entitlement assumes that the exercise of all options capable of exercise and the valid allotment
and issuance of shares pursuant to the terms of the JXJL acquisition.

    *     The Tender Offer is conditional upon Shareholder approval and the Capital Reduction outlined below being confirmed by the Court.

    Effects of the Tender Offer
    *     The principal effect of the Proposals and the De-Listing in particular is that Shareholders will no longer be able to buy and sell
shares in the Company through a public stock market; that is liquidity in the Company's shares will be very limited. However, in order to
provide a measure of liquidity in the Company's shares after de-listing, the Company intends to set up and maintain a matched bargain
settlement facility.

    *     Under this facility, shareholders or persons wishing to acquire shares will be able to leave an indication with the facility
provider that they are prepared to buy or sell at an agreed price. In the event that the facility provider is able to match that order with
an opposite sell or buy instruction, the facility provider will contact both parties and then effect the order. Shareholders who do not have
their own broker may need to register with the facility provider as a new client. This can take some time to process and therefore
shareholders who consider they are likely to avail themselves of this facility are encouraged to register at the earliest opportunity. 

    *     The contact details of the matched bargain settlement facility provider, once arranged, will be made available to Shareholders.

    *     The shareholders' agreement referred to below provides that, following De-Listing, the Company will, although it is not required
to do so, continue to provide its shareholders with both the interim and final year end accounts. In addition, the Company will provide
material news updates as the Board considers appropriate. A summary of the provisions of this shareholders' agreement can be found in
paragraph 7 of Part 1 of the Circular.

    Capital Reduction
    *     As at 31 December 2007, the Company had an accumulated deficit on its retained earnings account of £7,929,931 ("Deficit"),
3,447,931,806 Deferred Shares of 0.1p each and a share premium account of £19,404,956.

    *     In order to eliminate the Deficit in its entirety, the Board is seeking Shareholders' authority to cancel the Company's share
premium account (the "Capital Reduction"). In addition to the cancellation of the Deficit, the Board proposes that the Capital Reduction
should also create £11,475,025 of distributable reserves to enable the Tender Offer to be undertaken.

    *     The cancellation of the Deficit and the creation of the Reserve would reduce the Company's share premium account to £nil. However,
the Capital Reduction would leave the Company's net assets unchanged and the underlying book value of the Company would be unaffected.

    *     The Board is also proposing to cancel the Deferred Shares which were created by the Company in September 2005, as part of a
capital reorganisation and placing undertaken by the Company in connection with its readmission to trading on AIM. 

    *     The cancellation would reduce the Company's called up share capital by £3,447,932. However, aside from this reduction, the
Company's underlying book value would be unaffected by the cancellation.

    *     It is proposed that in accordance with article 6.2 of the Company's articles of association, the cancellation be effected without
payment to those shareholders holding Deferred Shares. Accordingly, no distributable reserves of the Company would be required in order to
effect the cancellation. Approval of the cancellation by the Shareholders by way of special resolution will be required.


    Articles of Association
    *     The Company is proposing the adoption of new articles of association to take account of changes in the law, and to add 'drag along
and tag along' provisions. The latter is designed to make it easier to sell the Company in the event that a buyer can be found at a price
that is attractive to the majority of shareholders.

    *     The proposed new Articles of Association will be available for inspection during usual business hours (Saturday and Sunday
excepted) until the close of the Annual General Meeting at the registered office of the Company's lawyers (Taylor Wessing, Carmelite, 50
Victoria Embankment, London EC4Y 0DX).

    *     Shareholder approval is required for the adoption of the new articles of association. The Company and Panmure Gordon have received
irrevocable undertakings from the Directors and other shareholders holding 160,275,948 Ordinary Shares, representing 72.3 per cent. of the
ordinary share capital, that they will vote in favour of the resolution relating to the adoption of the new articles. 


    Shareholder Agreement and New Option Scheme
    *     Audley Capital Management Limited, Gartmore Investment Limited, CRV, which is wholly owned by James Reiman, Zhang Ge, the Chief
Executive, and the Company have entered into a shareholders' agreement to regulate certain matters concerning the Company.

    *     These provisions include the appointment of Directors and pre-emption rights on transfers of shares.  Summary details are
contained within the Circular.

    *     Similarly a summary of a new option scheme is contained within the Circular. The total outstanding option pool over the Company's
shares will not exceed 16 per cent. of the fully diluted issued share capital and options in the scheme will be exercisable at the same
price as the Tender Offer is made.


    Significant shareholders
    The Company is aware of the following persons who directly or indirectly have an interest representing 3 per cent. or more of the
existing share capital of the Company (being the threshold at or above which, in accordance with the Disclosure and Transparency Rules, an
interest must be disclosed to the Company):

 Name                                        Current         Percentage of current issued share
                                     shareholding(3)                                    capital
 Audley                                   56,165,000                                       25.3
 Gartmore                                 33,180,750                                       15.0
 USS(1)                                   10,086,364                                        4.5
 Charles Stanley, stockbrokers             8,211,932                                        3.7
 JOHIM(2)                                  6,816,666                                        3.1

    (1) Universities Superannuation Scheme Limited
    (2) JO Hambro Investment Management
    (3) As at 15 October 2008

    The interests (all of which are beneficial unless otherwise stated) of Audley, Gartmore, the Directors and persons connected with them
and senior management in the existing share capital of the Company as at the date of this document and immediately following the Tender
Offer are as set out below:

 Name                         Current shareholding         Percentage of          Shareholding  Percentage of issued
                                                    current issued share      following Tender         share capital
                                                                 capital                Offer*      following Tender
                                                                                                             Offer**
 James Reiman (1) (2)                   59,675,688                  26.9            58,253,949                  27.7

 Audley                                 56,165,000                  25.3            56,165,000                  26.7

 Gartmore                               33,180,750                  15.0            28,883,053                  13.7

 Zhang Ge                                7,487,324                   3.4             9,045,356                   4.3

 Stephen Davidson                           60,000                  0.03             1,060,000                   0.5

 Other Senior Management (3)             3,707,186                   1.7             5,866,989                   2.8


    *      Assuming maximum possible take-up of the Tender Offer, save where the Shareholder 
       has irrevocably undertaken not to tender.


    **     Shareholdings and issued share capital following the Tender Offer assumes Optionholders of all 
       in the-money Options at the date of this circular exercise such Options and participate in the Tender 
       Offer, save as otherwise limited by irrevocable commitments not to tender.

    (1) James Reiman's interests in the Company are held via CRV
    (2) Includes 8,289,971 shares subject to an option granted to a trust to which Daniel Skaff is 
   connected
    (3) Lisa Chen, Wang Wei, Zhang Yun and Jian Hu
    
 
    Recommendation
    *     The Directors, having consulted with Panmure Gordon, consider that all the proposals to be considered at the General Meeting are
fair and reasonable and are in the best interests of the Company and the Shareholders as a whole. 

    *     The Directors therefore unanimously recommend that Shareholders vote in favour of the Resolutions as they have undertaken to do so
in respect of their own beneficial holdings of 67,223,012 Ordinary Shares, representing 30.3 per cent. of the existing issued ordinary share
capital of the Company.

    *     The Tender Offer is conditional upon the Capital Reduction being approved by the Court and taking effect by 5pm on 30 December
2008. If for any reason the Capital Reduction does not become effective by 5pm on 30 December 2008, the Tender Offer will not proceed.
Shareholders should note that if for any reason the Tender Offer does not take place, the De-listing will still occur.

    DEFINITIONS
 "Basic Entitlement"          means the minimum percentage of a Tender Offer
                              Shareholder's holding at the Record Date that
                              the Tender Offer Shareholder may expect to be
                              able to sell via the Tender Offer. The Basic
                              Entitlement will vary depending on the extent to
                              which holders of options capable of exercise
                              choose to participate in the Tender Offer and
                              the number of Ordinary Shares to be allotted and
                              issued pursuant to the JXJL acquisition.
 "Basic Entitlement Amount"   means the number of Ordinary Shares which is the
                              product, rounded down to the nearest whole
                              share, of the Basic Entitlement multiplied by
                              the registered shareholding of each Shareholder
                              participating in the Tender Offer
 "Tender Offer Shares"        Ordinary Shares to which the Tender Offer
                              relates being, in aggregate, the total number of
                              Ordinary Shares in issue as at 5.00 p.m. on the
                              Record Date other than those Ordinary Shares
                              held by certain shareholders who have
                              irrevocably committed to limit their
                              participation in the Tender Offer or not to
                              participate at all, including any Ordinary
                              Shares issued and allotted on or before such
                              time pursuant to the valid exercise of Options
                              and pursuant to the terms of the JXJL
                              acquisition 
 "Tender Offer Shareholders"  holders of Tender Offer Shares 

    EXPECTED TIMETABLE OF PRINCIPAL EVENTS
 Latest time for receipt of Forms of Proxy    12 November 2008 at 11:00 a.m.  
 General Meeting                              14 November 2008 at 11:00 a.m.
 Final date for receipt of Tender Forms and   4 December 2008 at 1:00 p.m.  
 share certificates for certificated shares
 Transfer to escrow account of tendered       4 December  2008 at 1:00 p.m.  
 uncertificated Tender Offer Shares settled
 Record Date for Tender Offer                  4 December 2008 at 5:00 p.m.   
 Announcement of take-up level under Tender   5 December  2008  
 Offer
 Court hearing to confirm Capital Reduction*  10 December  2008  
 Effective date for Capital Reduction*        By 15 December 2008  
 Purchase of Tender Offer Shares under the    15 December 2008  
 Tender Offer**
 CREST Account credited with Tender Offer     16 December 2008  
 proceeds**
 Dispatch of cheques for Tender Offer         16 December 2008  
 proceeds**
 Ordinary Shares delisted from AIM            By 17 December 2008  

    *     These dates are dependent on, inter alia, the date upon which the Court confirms the Capital 
      Reduction. The Court hearing may be subject to postponement by the Court.
    **   The Capital Reduction is subject to the approval of the Court and will not take place if Court approval 
      is not obtained. If the Capital Reduction is not approved by the Court, the Tender Offer will not take 
      place.
    If any of the above times and/or dates change, the revised times and/or dates will be notified to Shareholders by announcement through a
Regulatory Information Service of the London Stock Exchange.


    For more information contact:

    Weber Shandwick Financial                                                                              020 7067 0700
    Terry Garrett / Stephanie Badjonat / John Moriarty

    Panmure Gordon (UK) Limited                                                                           020 7459 3600
    Aubrey Powell / Giles Stewart 

    EBT Mobile China plc
    Jim Reiman, Non-Executive Chairman                                                                001 847 784 8100
    Stephen Davidson, Non-Executive Director                                                          01491 615306






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