Opinion Report of the Independent Financial Advisor

478 Pages·2017·5.38 MB·English

- TRANSLATED VERSION -
Opinion Report of the Independent Financial Advisor

Regarding

The Asset Acquisition and Connected Transaction of U City Public Company Limited
Related to the Entire Business Transfer of Unicorn Enterprise Company Limited

for
The Shareholders of
U City Public Company Limited

Prepared by

I V Global Securities Public Company Limited
December 9, 2017
The English Translation of the Independent Financial Advisor’s Opinion Report has been prepared solely
for the convenience of foreign shareholders of U City Public Company Limited
and should not be relied upon as the definitive and official document.
The Thai language version of the Independent Financial Advisor’s Opinion Report is the definitive and
official document and shall prevail in all aspects in the event of any inconsistency with this translation.
This page is intentionally left blank
Table of Content
Page
Preface 1
Executive Summary 3
Part 1 Characteristics & Details of the Transaction 33
1.1 Characteristics and Details of the Asset Acquisition and Connected Transaction 33
1.1.1 Objective and Background of the Transaction 33
1.1.2 Date of the Transaction 34
1.1.3 Parties Involved and Relationship with the Company 35
1.1.4 General Characteristics 38
1.1.5 Detailed of the Acquired Asset 43
1.1.6 Calculation of Transaction Size 47
1.1.7 The Entire Business Transfer Agreement 49
1.1.8 Other details 50
1.1.9 Total Value of Consideration 55
1.1.10 Basis Used to Determine the Value of Total Consideration Paid 58
1.1.11 Conditions of the Transactions and Payment Method 59
1.1.12 Sources of Funds to the Transaction 59
1.1.13 Rights Attached to the Company’s newly preferred shares 60
1.1.14 Summary of key terms of U-3 Warrants and U-4 Warrants 63
1.1.15 Consideration of the reduction of registered and paid-up capital to clear the 64
accrued loss and share discount
1.2 Information of U City Public Company Limited 64
1.3 Information of Unicorn Enterprise Company Limited 64
1.4 Information of BTS Group Holdings Public Company Limited 64

Part 2 Opinion of Independent Financial Advisor on 65
Reasonableness of Asset Acquisition and Connected Transaction
2.1 Objective and Necessity to Entering into the Transaction 65
2.2 Effects from Entering into the Transaction 66
2.3 Comparison of Advantages and Disadvantages of Entering into the Transaction 60
2.3.1 Advantages of Entering into the Transaction 75
2.3.2 Disadvantages of Entering into the Transaction 81
2.4 Comparison of Advantage and Disadvantages of Entering into the Connected 86
Transaction and Entering into the Transactions with Outsiders and the Reason that the
Company did not Entering into the Transaction with Outsiders
2.5 Risks that may arise from Entering into the Transaction 89
Part 3 Opinion of Independent Financial Advisor on 93
Reasonableness of Purchase Price and Reasonableness of
Funding and Conditions of the Transaction
3.1 Fair Value of the Company’s Preferred Shares 94
3.1.1 Fair Value of the Company’s Common Shares 94
3.1.1.1 Book Value Approach 95
3.1.1.2 Adjusted Book Value Approach 95
3.1.1.3 Market Value Approach 97
3.1.1.4 Market Comparable Approach 99
3.1.1.5 Discounted Cash Flow Approach: DCF 101
3.1.1.6 Summary of Opinion of the IFA on the Fair Value of the Company’s Common Shares 107
3.1.2 Valuation of Additional Dividends of Preferred Shares 109
3.1.3 Summary of Opinion of the IFA on the Fair Value of the Company’s Preferred Shares 111
3.1.4 Valuation of the Warrant to purchase Ordinary Shares of the Company No.3 (U-W3) 112
3.1.5 Summary of Opinion of the IFA on the Fair Value of the Company Preferred Shares 114
including U-W3 which the Company will offer to UE
3.2 Fair Value of Shareholders’’ Equity of UE 115
3.2.1 Book Value Approach 115
3.2.2 Adjusted Book Value Approach 116
3.2.3 Market Value Approach 117
3.2.4 Market Comparable Approach 117
3.2.5 Discounted Cash Flow Approach: DCF 118
3.2.6 Summary of Opinion of the IFA on the Fair Value of UE’s Shares 126
3.3 Appropriateness of the Transaction Value 128
3.4 Sufficiency of the Source of Fund for the Transaction 130
3.5 Suitability of the Conditions of the Transaction 131

Part 4 Conclusion of Opinion of Independent Financial Advisor 135
Appendices
Appendix 1 Company Information and Operating Results of
U City Public Company Limited (“Company” or “U”)
Appendix 2 Company Information and Operating Results of
Unicorn Enterprise Company Limited (“UE”)
Appendix 3 Company Information and Operating Results of
BTS Group Holdings Public Company Limited (“BTSG”)
Appendix 4 Valuation of Additional Dividends of Preferred Shares

Appendix 5 Valuation of Subsidiaries (Assets Under Group I)
Real Estate Development: For Rent, Services and Hotel in Thailand
Appendix 6 Valuation of Subsidiaries (Assets Under Group II)
Real Estate Development: For Rent, Services and Hotel in overseas
Appendix 7 Valuation of Subsidiaries (Assets Under Group III)
Real Estate Development: For Sale
Appendix 8 Valuation of Subsidiaries
Real Estate Development: pending disposition
Appendix 9 Valuation of Subsidiaries (Assets Under Group IV)
Dormant Businesses
Appendix 10 Assessment of the impact of the conversion of
warrants to purchase the Company’ ordinary shares No. 1 (the “U-W1 Warrants”)
and No. 2 (the “U-W2 Warrants”) on the Company’s ordinary shares
Appendix 11 Valuation of Subsidiaries of Unicorn Enterprise Company Limited
(Assets Under Group A)
Appendix 12 Valuation of Affiliates of Unicorn Enterprise Company Limited
(Assets Under Group B)
Appendix 13 Valuation of Affiliates under BTS-SIRI
(Assets Under Group C)
Appendix 14 Discount Rate:
Various Weighted Average Cost of Capital (WACC) used in this report
Appendix 15 Map within Thana City Project
GLOSSARY
Abbreviation Meaning
SEC The Securities and Exchange Commission
SET The Stock Exchange of Thailand
Notification on Acquisition Notification of the Capital Market Supervisory Board No. TorJor 20/2551 Re: Rules
or Disposal of Assets on Entering into Material Transactions Deemed as Acquisition or Disposal of Assets,
and the Notification of the Stock Exchange of Thailand Re: Disclosure and Guideline
for Listed Company on Acquisition or Disposal of Assets B.E. 2547 and its
amendments
Notification on the  The Notice of Capital Market Supervisory Board No. Thor.Jor. 21/2551 Re: Criteria
Connected Transaction  on Connected Transaction, dated August 31, 2008, and amended thereof, and the
Notice of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure
of Information and Other Acts of Listed Companies Concerning the Connected
Transactions, 2003, dated November 19, 2003, and amended thereof.

“U” or the “Company” U City Public Company Limited
UE Unicorn Enterprise Company Limited
BTSG BTS Group Holdings Public Company Limited
“Independent Financial I V Global Securities Public Company Limited
Advisor”or “IFA”

Legal Advisor The Capital Law Office Limited
Independent Property T.A. Management Corporation (1999) Co., Ltd.
Appraiser

Exchange Rate The exchange rate that is used throughout in this Report is based on the
currency conversion based the exchange rate as at October 27th, 2017, one day
prior to the Board of Directors’ resolution in entering into the transaction. The
exchange rate is 0.344 THB to 1 JPY.
The exchange rate for USD 33.2900 (USD/THB)
The exchange rate for GBP 43.7067 (GBP/THB)
The exchange rate for EUR 38.7 (EUR/THB)
The exchange rate for HKD 4.2644 (KD/THB)

“EBT” Entire Business Transfer
“PP” Private Placement
or “RO” Rights Offering
DCF Discounted Cash Flows
EBIT Earnings Before Interest and Tax
Enterprise Value (EV) Enterprise Value
Equity Value Book Value or Shareholders’ Equity Value
FCFF Free Cash Flow to Firm
P/BV Price to Book Value Ratio
P/E Price to Earnings Ratio
WACC Weighted Average Cost of Capital
Assets under U City Public Company Limited (“U” or the “Company”)
Abbreviation Meaning
Assets under Group I (Please see details in Appendix 5)
I.01 KKP Kamkoong Property Company Limited
I.02 BTSA BTS Assets Company Limited
I.03 JV Joint Venture of U City Public Company Limited
Aman Resorts Services Limited and Silverlink Holding Limited
Assets under Group II (Please see details in Appendix 6)
II.01 LEH Lombard Estate Holdings Limited
TTG 1 Thirty Three Gracechurch 1 Limited
TTG 2 Thirty Three Gracechurch 2 Limited
LHUT LH Unit Trust
VHC Vienna House Capital GmbH
USL Underwood Street Limited
Assets under Group III (Please see details in Appendix 7)
III.01 P Green Project Green Company Limited
III.02 Prime A Prime Area 38 Company Limited
Assets under Group IV (Please see details in Appendix 9)
IV.01 NHP Natural Hotel Panwa Company Limited
IV.02 NHSK Natural Hotel Sukhumvit Company Limited
IV.03 NPV Natural Park Ville Company Limited
IV.04 NRE Natural Real Estate Company Limited
IV.05 PO Park Opera Company Limited
IV.06 RPM Richee Property Management Company Limited
IV.07 PG Park Gourmet Company Limited
Companies under Unicorn Enterprise Company Limited (“UE”)
Abbreviation Company Name
Assets under Group A (Please see details in Appendix 11)
A01 UNIS Unison One Co., Ltd
A02 MTA Muangthong Assets Co., Ltd.
A03 PKR PrannaKiri Assets Co., Ltd.
A04 SPC Siam Paging Communication Co., Ltd.
A05 TFB Tanayong Food and Beverage Co., Ltd.
A06 BTSL BTS Land Co., Ltd
A07 NSP Nine Square Property Co., Ltd.
A08 MAK Mak 8 Co., Ltd.
A09 TPM Tanayong Property Management Co., Ltd.
A10 RBP Ratburana Property Co., Ltd
A11 TGC Thana City Golf and Sports Club Co., Ltd.
A12 THK Tanayong Hong Kong Limited
Assets under Group B (Please see details in Appendix 12)
B01 AHS Absolute Hotel Services Co., Ltd.
B02 KEY Keystone Estate Co., Ltd
B03 KM Keystone Management Co., Ltd.
Assets under Group C (Please see details in Appendix 13)
C01 BTS Sansiri Holding One Limited
C02 BTS Sansiri Holding Two Limited
C03 BTS Sansiri Holding Three Limited
C04 BTS Sansiri Holding Four Limited
C05 BTS Sansiri Holding Five Limited
C06 BTS Sansiri Holding Six Limited
C07 BTS Sansiri Holding Seven Limited
C08 BTS Sansiri Holding Eight Limited
C09 BTS Sansiri Holding Nine Limited
C10 Nuvo Line Agency Co., Ltd
C11 BTS Sansiri Holding Eleven Limited
C12 BTS Sansiri Holding Twelve Limited
C14 BTS Sansiri Holding Fourteen Limited
C15 BTS Sansiri Holding Fifteen Limited
C16 BTS Sansiri Holding Sixteen Limited
C17 BTS Sansiri Holding Seventeen Limited
C18 BTS Sansiri Holding Eighteen Limited
C19 BTS Sansiri Holding Nineteen Limited
C20 BTS Sansiri Holding Twenty Limited
C21 BTS Sansiri Holding Twenty One Limited
C22 BTS Sansiri Holding Twenty Two Limited
Opinion Report of the Independent Financial Advisor U City Public Company Limited
TRANSLATION
The English Translation of the Independent Financial Advisor’s Opinion Report has been prepared solely
for the convenience of foreign shareholders of U City Public Company Limited
and should not be relied upon as the definitive and official document.
The Thai language version of the Independent Financial Advisor’s Opinion Report is the definitive and
official document and shall prevail in all aspects in the event of any inconsistency with this translation.
Ref: IB 115 / 2560

December 9, 2017

Subject: Opinion Report of Independent Financial Advisor regarding the Asset Acquisition and Connected
Transaction of U City Public Company Limited on the Entire Business Transfer of Unicorn Enterprise
Company Limited
To Audit Committee and Shareholders of
U City Public Company Limited

Appendix: 1) Company Information and operating results of U City Public Company Limited
2) Company Information and operating results of Unicorn Enterprise Company Limited
3) Company Information and operating results of BTS Group Holdings Public Company Limited
4) Valuation of Additional Dividends of Preferred Shares
5) Valuation of Subsidiaries:Real Estate Development: For Rent, Services and Hotel in Thailand
6) Valuation of Subsidiaries: Real Estate Development: For Rent, Services and Hotel - International
7) Valuation of Subsidiaries: Real Estate Development: For Sale
8) Valuation of Subsidiaries: Real Estate pending for disposition
9) Valuation of Subsidiaries: Dormant Businesses
10) Assessment of the impact of the conversion of U-W1 & U-W2
11) Valuation of Subsidiaries of Unicorn Enterprise (“UE”) (Assets Under Group A)
12) Valuation of Affiliates of Unicorn Enterprise (“UE”) (Assets Under Group B)
13) Valuation of Affiliates of BTS-SIRI (Assets Under Group C)
14) Discount Rate: Weighted Average Cost of Capital for this report
15) Map in Thana City Project

References: 1) Resolution of the meeting of U City Public Company Limited’s Board of Directors No. 10/2560
held on October 30, 2017
2) Information Memorandum on the Asset Acquisition and Connected Transaction of U City
Public Company Limited dated October 30, 2017 and the amendments
3) Information Memorandum on the Asset Acquisition and Connected Transaction of U City
Public Company Limited dated December 4, 2017 and the amendments
4) Resolution of the meeting of BTS Group Public Company Limited’s Board of Directors No.
9/2560 held on October 30, 2017 and No. 11/2560 dated December 4, 2017 and Information
Memorandum on the Entire Business Transfer of Unicorn Enterprise Company Limited dated
October 30, 2017 and the amendments on December 4, 2017.
I V Global Securities Public Company Limited Page 1
Opinion Report of the Independent Financial Advisor U City Public Company Limited
5) Annual Disclosure (Form 56-1) of U City Public Company Limited
for the year ended December 31,2017
6) Audited Financial Statements of U City Public Company Limited for 12-month period ended
December 31, 2014-2016, and the interim financial statements for the 6-monts period ended
June 30, 2017
7) Certificate of company registration, Memorandum of Association, and other documents, as
well as interviews with management and relevant personnel of
U City Public Company Limited.
8) Appraisal report by the Independent Property Appraiser on various assets
9) Legal Due Diligence by legal advisor of the Company

Disclaimers:
The result of the study by I V Global Securities Public Company Limited (“Independent Financial
Advisor” or “IFA”) in this report (or “IFA Report”) is based on the information and assumptions provided by
management of U City Public Company Limited, and the information disclosed to the public through the
website of the Securities and Exchange Commission of Thailand (www.sec.or.th), the Stock Exchange of
Thailand (www.set.or.th), and Business Online Public Company Limited (www.bol.co.th).
The opinion of the IFA in this report is based on the assumptions that all the information and
documents received are accurate and complete, and reflects the operating environment and most up-to-date
information at the time of issuance of this report. However, there may be any incident having material impact
on the Company’s business operations and plans, as well as decision of the shareholders on the Asset
Acquisition Transaction. The Independent Financial Advisor expresses its opinion under the current
circumstance. If there is a significant change in the circumstance or any information, the result of the study
may be affected.
In rendering its opinion in this report, the IFA has considered the reasonableness of conditions of the
Transaction as well as other related factors thoroughly and rationally in accordance with the professional
judgments.
The attachments to this report are deemed to be a part of the IFA opinion and are the information that
the Audit Committee and Shareholders should consider jointly with this report.

I V Global Securities Public Company Limited Page 2