The Group, Chow Tai Fook Group ("CTF") and The Star Entertainment Group Limited ("The Star") entered into an agreement under which the parties will form a strategic alliance to facilitate mutual business growth and enable each party to benefit from each other's capabilities and scale and to leverage each party's experience and expertise to assist in the future growth and development of each of the parties' business, including in respect of the development of and participation in the future developments of The Star and other nominated developments, and the provision of certain marketing services.

As an integral part of the strategic alliance, the parties also entered into a subscription agreement (the "Subscription Agreement") whereby The Star agrees to issue and allot and the Group and CTF will each subscribe for 45,825,000 fully paid ordinary shares in The Star, which, immediately after the subscription will represent 4.99% (or approximately 9.9% if aggregated) of the total fully paid ordinary shares in The Star. The subscription price to be paid by the Company shall be AU$245.2 million (equivalent to approximately HK$1,478.3 million), which is payable by the Company to The Star out of a combination of the Group's internal resources and external financing in immediately available funds at Completion.

The Board considers that the entering into of the Agreements will bring strategic benefits to the Group. It will strengthen existing relationship with the Star and CTF. In addition, it will forge partnership for potential mixed use property projects in relation to the Future Star Developments and the Nominated Developments which will be complementary to The Star's operations, and to the Group's development pipeline in Australia. The group will benefit from cross-selling through future co-operation with The Star which is synergistic to the gaming platform of the Group following its recent announcement to acquire TWOC. Meanwhile, the Group will benefit from the cash flow from The Star's future dividend distribution following its announcement to increase the dividend payout to at least 70% of normalised net profit after tax commencing the financial year of 2018.

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