Pegasus Entertainment : Announcements and Notices - Announcement Pursuant to Rule 3.7 of the Takeovers Code Update on the Potential Transaction

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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement.

This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of the Company.

Pegasus Entertainment Holdings Limited

天 馬 影 視 文 化 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 1326)

ANNOUNCEMENT PURSUANT TO RULE 3.7 OF THE TAKEOVERS CODE UPDATE ON THE POTENTIAL TRANSACTION

This announcement is made by Pegasus Entertainment Holdings Limited (the ''Company'') pursuant to Rule 3.7 of the Hong Kong Code on Takeovers and Mergers (the ''Takeovers Code'').

Reference is made to the announcements of the Company dated 7 October 2015, 6 November 2015, 16 November 2015, 30 November 2015, 14 December 2015 and 31 December 2015 respectively in relation to the Potential Transaction (the ''Announcements''). Capitalised terms used in this announcement shall have the same meanings as those defined in the Announcements, unless specified otherwise.

The Board wishes to update the shareholders of the Company and potential investors that, as informed by the Potential Vendors, (i) the discussion and negotiation between the Potential Vendors and the Third Party on the terms of the legally binding formal agreements in respect of the Potential Transaction is still in progress; and (ii) except for the NDA, the Supplemental Letter, the Second Supplemental Letter and the Third Supplemental Letter, no formal or legally binding agreement for the Potential Transaction has been entered into between the Potential Vendors and the Third Party up to the date of this announcement.

Further announcement(s) setting out the progress of the Potential Transaction will be made as and when necessary in accordance with the Listing Rules and the Takeovers Code and on a monthly basis until an announcement of a firm intention to make an offer under Rule 3.5 of the Takeovers Code or of a decision not to proceed with the Potential Transaction is made.

There is no assurance by the Company that the Potential Transaction mentioned in this announcement will either materialise or eventually be consummated and the discussions may or may not lead to the making of a general offer for the Shares and outstanding warrants of the Company. Shareholders of the Company and potential investors are urged to exercise extreme caution when dealing in the Shares and/or other securities of the Company.

By order of the Board

Pegasus Entertainment Holdings Limited Wong Pak Ming

Chairman

Hong Kong, 29 January 2016

As at the date of this announcement, the executive Directors are Mr. Wong Pak Ming, Ms. Wong Yee Kwan Alvina and Mr. Wong Chi Woon Edmond and the independent non- executive Directors are Mr. Lam Kam Tong, Mr. Lo Eric Tien-cheuk and Mr. Tang Kai Kui Terence.

All the Directors jointly and severally accept full responsibility for the accuracy of the information contained in this announcement and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement misleading.