NetDragon Websoft Inc Rule 2.7 Announcement (7483S)

TIDMPRW

RNS Number : 7483S

NetDragon Websoft Inc

10 July 2015

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

FOR IMMEDIATE RELEASE

10 July 2015

RECOMMENDED CASH OFFER

for

PROMETHEAN WORLD PLC

DIGITAL TRAIN LIMITED

an indirect non wholly-owned subsidiary of

NETDRAGON WEBSOFT INC.

Summary of the Offer

-- The Boards of NetDragon Websoft Inc. ("NetDragon") and Promethean World plc ("Promethean") are pleased to announce that they have reached agreement regarding the terms of a recommended cash offer for Promethean by Digital Train Limited ("Digital Train"), an indirect non wholly-owned subsidiary of NetDragon, pursuant to which Digital Train will acquire the entire issued and to be issued ordinary share capital of Promethean (the "Offer").

-- The Offer constitutes a "very substantial acquisition" for NetDragon (being the majority controlling shareholder of Digital Train) under the HK Listing Rules and will therefore be subject to the applicable announcement and approval of NetDragon Shareholders at the NetDragon General Meeting as required by the HK Listing Rules.

   --      Under the terms of the Offer, Promethean Shareholders will be entitled to receive: 
                                      for each Promethean Share:                                             40 pence in cash,

which values the fully diluted share capital of Promethean at approximately GBP84.1 million and represents a premium of approximately:

o 48 per cent. to the closing price of 27 pence per Promethean Share on 15 June 2015, being the last Business Day prior to the commencement of the Offer Period;

o 32 per cent. to the closing price of 30.38 pence per Promethean Share on 9 July 2015, being the last Business Day prior to the date of this announcement; and

o 52 per cent. to the thirty day volume weighted average closing price of 26.31 pence per Promethean Share as of 15 June 2015, being the last Business Day prior to the commencement of the Offer Period.

-- NetDragon expects to support and accelerate Promethean's hardware and software roll out in its current markets of operation as well as additional markets across the globe. The objective of NetDragon's support is to ensure that Promethean strengthens its position as an education market leader and maximises the potential of the opportunities available in the education sector.

-- NetDragon believes that it shares similar values and objectives to those of the Board and management team of Promethean. NetDragon recognises the contributions made by Promethean's management and employees and believes that they are very important to the future development of the company.

NetDragon believes that the Offer is strategically attractive and will deliver the following benefits:

Strategic entry into the global education market

-- The acquisition of Promethean would build on NetDragon's existing position in the education sector and give NetDragon a global presence in the education market.

A strong brand in the education market

-- Promethean is one of the market leaders in the global education technology market with significant sales in North America and Western Europe of front-of-class interactive displays, which NetDragon would aim to leverage and enhance.

NetDragon's financial resources and expertise can accelerate Promethean's strategic development and financial performance

-- NetDragon has successfully built and scaled several mobile internet businesses which have resulted in significant in-house technology and mobile internet knowhow as well as an accumulation of over approximately US$450 million of cash.

-- NetDragon's knowhow and financial resources could assist Promethean in fulfilling its objective of shifting from solely being an education hardware provider towards also being a software provider.

Promethean and NetDragon's management teams would be complementary

-- As mobile and online technologies become increasingly prominent in the education field, the combination of the experience and skillset of Promethean's and NetDragon's management teams could become highly synergistic.

-- The Promethean Directors, who have been so advised by Gleacher Shacklock, consider the terms of the Offer to be fair and reasonable. In providing advice to the Promethean Directors, Gleacher Shacklock has taken into account the commercial assessments of the Promethean Directors. Accordingly, the Promethean Directors intend unanimously to recommend that Promethean Shareholders accept the Offer, as Graham Howe, Philip Rowley, Jim Marshall, Ian Baxter and Lord Puttnam, being the Promethean Directors who hold Promethean Shares, have irrevocably undertaken to do in respect of their own beneficial holdings of 11,421,048 Promethean Shares representing, in aggregate, approximately 5.62 per cent. of the ordinary share capital of Promethean in issue on 9 July 2015, being the last Business Day prior to the date of this announcement.

-- NetDragon and Digital Train have received irrevocable undertakings to accept (or procure the acceptance of) the Offer from the Cann Trusts in respect of, in aggregate, a total of 60,553,283 Promethean Shares representing approximately 29.80 per cent. of the ordinary share capital of Promethean in issue on 9 July 2015, being the last Business Day prior to the date of this announcement. In addition, the Cann Trusts beneficially hold 4,000,000 Promethean Shares (representing approximately 1.97 per cent. of the ordinary share capital of Promethean in issue on 9 July 2015, being the last Business Day prior to the date of this announcement) which are pledged in favour of, and which are registered in the name of, Barclayshare Nominees Limited (the "Pledged Shares"). The trustees of the R.J. Cann Discretionary Trust have agreed to use their reasonable efforts to procure that Barclayshare Nominees Limited accepts the Offer in respect of the Pledged Shares.

-- Accordingly, NetDragon and Digital Train have received irrevocable undertakings to accept (or procure the acceptance of) the Offer in respect of, in aggregate, a total of 71,974,331 Promethean Shares which represent approximately 35.42 per cent. of the ordinary share capital of Promethean in issue on 9 July 2015, being the last Business Day prior to the date of this announcement.

-- In respect of the NetDragon General Meeting, NetDragon Shareholders (who hold, in aggregate, approximately 50.33 per cent. of the voting share capital of NetDragon in issue on 9 July 2015, being the last Business Day prior to the date of this announcement) have given irrevocable undertakings to vote in favour of the resolutions required to approve the Offer. The NetDragon Circular is currently expected to be published in mid to late August and the NetDragon General Meeting is currently expected to be held by early September.

-- NetDragon and Digital Train have received a letter of intent to accept (or procure the acceptance of) the Offer from Aberforth Partners LLP (on behalf of its clients) in respect of, in aggregate, a total of 45,360,369 Promethean Shares representing approximately 22.32 per cent. of the ordinary share capital of Promethean in issue on 9 July 2015, being the last Business Day prior to the date of this announcement.

-- It is intended that the Offer be effected by means of a takeover offer within the meaning of Part 28 of the Companies Act.

-- The Offer Document, containing further information about the Offer, will be published along with the Form of Acceptance, other than with the consent of the Panel, within 28 days of this announcement and will be made available on NetDragon's website at http://ir.netdragon.com/ and on Promethean's website at http://www.prometheanworld.com/.

   --      Commenting on the Offer, Simon Leung, Vice Chairman of NetDragon said:

"We are truly excited by the opportunities created with the synergies, both technologies and market access, of the two companies. We believe, with the combined entity, we will continue to create value for our shareholders, and more important, will make a positive impact in the global world of learning."

   --      Commenting on the Offer, Phillip Rowley, Chairman of Promethean said:

"Our board believes that this offer represents fair value for our shareholders, whilst at the same time providing a platform which will allow the business to reach its full potential and realise its aim of making a real difference to the education of children across the world."

This summary should be read in conjunction with, and is subject to, the full text of this announcement (including its Appendices). The Offer will be subject to the Conditions and further terms set out in Appendix 1 to this announcement and to the full terms and conditions which will be set out in the Offer Document and the Form of Acceptance. Appendix 2 contains the bases and sources of certain information used in this announcement. Appendix 3 contains details of the irrevocable undertakings and letter of intent received in relation to the Offer that are referred to in this announcement, and Appendix 4 contains definitions of certain terms used in this announcement.

Enquiries:

NetDragon and Digital Train

Simon Leung, Vice Chairman +852 285 078 28

Ben Yam, Chief Financial Officer

VSA Capital (financial adviser to NetDragon and Digital Train)

Andrew Raca +44 (0)203 005 5000

James Asensio

Promethean

Philip Rowley, Chairman +44 (0)1254 298 598

Jim Marshall, Chief Executive Officer

Gleacher Shacklock (financial adviser to Promethean)

Edward Cumming-Bruce +44 (0)207 484 1150

Citigate Dewe Rogerson Consultancy (public relations adviser to Promethean)

Anthony Carlisle +44 (0)7973 611 888

About NetDragon and Digital Train

NetDragon, headquartered in Fuzhou City of Fujian Province of the PRC, is a leading online game and mobile internet platform developer and operator in the PRC. In recent years NetDragon has also become a major player in the online and mobile education industry. NetDragon underwent an IPO in 2007 and migrated to the Main Board of The Stock Exchange of Hong Kong Limited on 24 June 2008.

Digital Train is an indirect non wholly-owned subsidiary of NetDragon incorporated in the BVI.

Important notices relating to financial advisers

VSA Capital, which is regulated by the Financial Conduct Authority in the UK, is acting exclusively for NetDragon and Digital Train and no one else in connection with the Offer and will not be responsible to anyone other than NetDragon or Digital Train for providing protections afforded to its clients or providing advice in relation to the Offer or any other matter referred to in this announcement.

Gleacher Shacklock, which is regulated by the Financial Conduct Authority in the UK, is acting exclusively for Promethean and no one else in connection with the Offer and will not be responsible to anyone other than Promethean for providing protections afforded to its clients or providing advice in relation to the Offer or any other matter referred to in this announcement.

Further information

This announcement is for information purposes only and is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Offer or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. The Offer will be made solely by means of the Offer Document and the Form of Acceptance accompanying the Offer Document, which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted. Any response to the Offer should be made only on the basis of information contained in the Offer Document. Promethean Shareholders are advised to read the formal documentation in relation to the Offer carefully once it has been despatched.

This announcement does not constitute a prospectus or prospectus-equivalent document.

This announcement has been prepared for the purposes of complying with English law, the rules of the London Stock Exchange, the Listing Rules and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside the United Kingdom.

Overseas jurisdictions

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom or the United States and the ability of Promethean Shareholders who are not resident in the United Kingdom or the United States to participate in the Offer may be affected by the laws of relevant jurisdictions. Therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom or the United States or Promethean Shareholders who are not resident in the United Kingdom or the United States will need to inform themselves about, and observe, any applicable legal or regulatory requirements. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Offer disclaim any responsibility for liability for the violation of such restrictions by any person. Further details in relation to overseas shareholders will be contained in the Offer Document.

The Offer is not being, and will not be, made available, directly or indirectly, in or into or by the use of the mails of, or by any other means or instrumentality of interstate or foreign commerce of, or any facility of a national state or other securities exchange of any Restricted Jurisdiction, unless conducted pursuant to an exemption from the applicable securities laws of such Restricted Jurisdiction.

Accordingly, copies of this announcement and all documents relating to the Offer are not being, and must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction except pursuant to an exemption from the applicable securities laws of such Restricted Jurisdiction and persons receiving this announcement (including, without limitation, agents, nominees, custodians and trustees) must not distribute, send or mail it in, into or from such jurisdiction. Any person (including, without limitation, any agent, nominee, custodian or trustee) who has a contractual or legal obligation, or may otherwise intend, to forward this announcement and/or the Offer Document and/or any other related document to a jurisdiction outside the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction.

Notice to US holders of Promethean Shares

The Offer is being made for the securities of an English company with a listing on the London Stock Exchange. The Offer is subject to UK disclosure requirements, which are different from certain United States disclosure requirements. The financial information on Promethean, NetDragon and Digital Train included in this announcement, if any, has been prepared in accordance with IFRS, thus neither may be comparable to financial information of US companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States. The Offer is being made in the United States pursuant to the applicable US tender offer rules and otherwise in accordance with the requirements of the Code. Accordingly, the Offer will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments that are different from those applicable under US domestic tender offer procedures and law.

The receipt of cash pursuant to the Offer by a US holder of Promethean Shares may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other, tax laws. Each Promethean Shareholder is urged to consult his independent professional adviser immediately regarding the tax consequences of accepting the Offer.

The Offer will be made in the United States by Digital Train and no one else. Neither VSA Capital nor Gleacher Shacklock nor any of their respective affiliates, will be making the Offer in the United States.

It may be difficult for US holders of Promethean Shares to enforce their rights and any claim arising out of the US federal securities laws since NetDragon, Digital Train and Promethean are incorporated under the laws of countries other than the United States and some or all of their officers and directors are residents of non-US jurisdictions. In addition, a substantial amount of Promethean's assets are located outside the United States. US holders of Promethean Shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgment.

To the extent permitted by applicable law, in accordance with normal UK market practice and pursuant to Rule 14e-5(b) of the US Exchange Act, NetDragon, Digital Train or their nominees or brokers (acting as agents) or their respective affiliates may from time to time make certain purchases of, or arrangements to purchase, shares or other securities in Promethean, other than pursuant to the Offer, at any time before or during the period in which the Offer remains open for acceptance. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any such purchases, or arrangements to purchase, will comply with all applicable UK rules, including the Code, the rules of the London Stock Exchange and Rule 14e-5 under the US Exchange Act to the extent applicable. To the extent required by applicable law (including the Code), any information about such purchases will be disclosed on a next day basis to the Panel and a Regulatory Information Service including the Regulatory News Service on the London Stock Exchange website, www.londonstockexchange.com.

Forward looking statements

This announcement (including information incorporated by reference in this announcement) contains statements about Promethean, NetDragon and Digital Train which are, or may be deemed to be, "forward-looking statements" and which are prospective in nature. All statements other than statements of historical fact included in this announcement may be forward-looking statements. They are based on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects", "is expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", "predicts", "intends", "anticipates", "believes", "targets", "aims", "projects", "future-proofing" or words or terms of similar substance or the negative of such words or terms, as well as variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Forward-looking statements may include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Promethean's, NetDragon's or Digital Train's operations and potential synergies resulting from the Offer; and (iii) the effects of global economic conditions on Promethean's, NetDragon's or Digital Train's business.

Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors may cause the actual results, performance or achievements of NetDragon, Digital Train or Promethean to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause actual results, performance or achievements of NetDragon, Digital Train or Promethean to differ materially from the expectations of NetDragon, Digital Train or Promethean, as applicable, include, among other things: UK domestic and global economic and business conditions; the ability to access sufficient funding to meet NetDragon's, Digital Train's or Promethean's liquidity needs; risks concerning borrower or counterparty credit quality; instability in the global financial markets, including Eurozone instability and the impact of any sovereign credit rating downgrade or other sovereign financial issues; market-related risks including in relation to interest rates and exchange rates; changing demographics and market-related trends; changes in customer preferences; changes to laws, regulation, accounting standards or taxation, including changes to regulatory capital or liquidity requirements; the policies and actions of governmental or regulatory authorities in the UK, the European Union, the United States or other jurisdictions in which NetDragon, Digital Train or Promethean operate; the ability to attract and retain senior management and other employees; the extent of any future impairment charges or write-downs caused by depressed asset valuations, market disruptions and illiquid markets; the effects of competition and the actions of competitors. Each of NetDragon, Digital Train and Promethean and each of their respective members, directors, officers, employees, advisers and persons acting on their behalf, expressly disclaims any intention or obligation to update or revise any forward-looking or other statements contained in this announcement, whether as a result of new information, future events or otherwise, except as required by applicable law.

No member of NetDragon, Digital Train or Promethean, or any of their respective associates, directors, officers, employees or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements.

Other than in accordance with its legal or regulatory obligations, none of NetDragon, Digital Train or Promethean is under any obligation and NetDragon, Digital Train and Promethean each expressly disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Except as expressly provided in this announcement, no forward-looking or other statements have been reviewed by the auditors of NetDragon, Digital Train or Promethean. All subsequent oral or written forward-looking statements attributable to any member of NetDragon, Digital Train or Promethean, or any of their respective associates, directors, officers, employees or advisers, are expressly qualified in their entirety by the cautionary statement above.

No profit forecasts or estimates

No statement in this announcement is intended as a profit forecast or estimate for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per share for NetDragon, Digital Train or Promethean, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for NetDragon, Digital Train or Promethean, as appropriate.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4). Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Rule 2.10 disclosure

In accordance with Rule 2.10 of the Code, Promethean confirms it has 203,200,000 ordinary shares of ten pence each in issue and admitted to trading on the main market of the London Stock Exchange. The International Securities Identification Number for the Promethean Shares is GB00B60B6S45.

Information relating to Promethean Shareholders

Please be aware that addresses, electronic addresses and certain other information provided by Promethean Shareholders, persons with information rights and other relevant persons for the receipt of communications from Promethean may be provided to Digital Train during the Offer Period as required under Section 4 of Appendix 4 to the Code to comply with Rule 2.12(c) of the Code.

Rounding

Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Requesting hard copy documents

In accordance with Rule 30.2 of the Code, a person so entitled may request a copy of this announcement and any information incorporated into it by reference to another source in hard copy form. A person may also request that all future documents, announcements and information to be sent to that person in relation to the Offer should be in hard copy form. For persons who receive a copy of this announcement in electronic form or via a website notification, a hard copy of this announcement will not be sent unless so requested from either Digital Train by contacting VSA Capital on +44 (0)203 005 5000 or Promethean by contacting Gleacher Shacklock on +44 (0) 207 484 1150, as appropriate.

Publication on website

This announcement and the display documents required to be published pursuant to Rule 26.1 of the Code will be made available, free of charge and subject to certain restrictions relating to persons in Restricted Jurisdictions, on NetDragon's website at http://ir.netdragon.com/ and on Promethean's website at http://www.prometheanworld.com/ by no later than 12 noon on the Business Day following the date of this announcement. For the avoidance of doubt, the contents of such websites are not incorporated into, and do not form part of, this announcement.

FOR IMMEDIATE RELEASE

10 July 2015

RECOMMENDED CASH OFFER

for

PROMETHEAN WORLD PLC

DIGITAL TRAIN LIMITED

an indirect non wholly-owned subsidiary of

NETDRAGON WEBSOFT INC.

   1.      Introduction

The Boards of NetDragon Websoft Inc. ("NetDragon") and Promethean World plc ("Promethean") are pleased to announce that they have reached agreement regarding the terms of a recommended cash offer for Promethean by Digital Train Limited ("Digital Train"), an indirect non wholly-owned subsidiary of NetDragon, pursuant to which Digital Train will acquire the entire issued and to be issued ordinary share capital of Promethean (the "Offer").

The Offer constitutes a "very substantial acquisition" for NetDragon (being the majority controlling shareholder of Digital Train) under the HK Listing Rules and will therefore be subject to the applicable announcement and approval of NetDragon Shareholders at the General Meeting as required by the HK Listing Rules.

   2.      Summary of the Offer

Under the Offer, which will be subject to the Conditions and terms set out in Appendix 1 to this announcement and to the further terms to be set out in the Offer Document, Promethean shareholders will be entitled to receive:

for each Promethean Share: 40 pence in cash

The Offer values the fully diluted share capital of Promethean at approximately GBP84.1 million.

The Offer represents a premium of approximately:

-- 48 per cent. to the closing price of 27 pence per Promethean Share on 15 June 2015, being the last Business Day prior to the commencement of the Offer Period;

-- 32 per cent. to the closing price of 30.38 pence per Promethean Share on 9 July 2015, being the last Business Day prior to the date of this announcement; and

-- 52 per cent. to the thirty day volume weighted average closing price of 26.31 pence per Promethean Share as of 15 June 2015, being the last Business Day prior to the commencement of the Offer Period.

It is intended that the Offer be effected by means of a takeover offer within the meaning of Part 28 of the Companies Act.

   3.      Background to and reasons for the Offer

NetDragon believes that the Offer is strategically attractive and will deliver the following benefits:

Strategic entry into the global education market

-- The acquisition of Promethean would build on NetDragon's existing position in the education sector and give NetDragon a global presence in the education market.

-- Promethean's current and prospective customer base would serve as a solid platform through which to begin the sale of new products and technologies currently in development by NetDragon.

Promethean has a strong brand in the education market

-- Promethean has been providing high quality products to the education market since its foundation in 1998 and has established itself as one of the leading brands in the education market.

   --      NetDragon intends to continue developing and enhancing Promethean's brand.

NetDragon's financial resources and expertise can accelerate Promethean's strategic development and financial performance

-- NetDragon has successfully built and scaled several mobile internet businesses and therefore will be in a strong position to help Promethean in commercialising its products with a mobile internet knowhow.

-- As a result of NetDragon's successful track record since its inception, NetDragon has accumulated over approximately US$450 million of cash which it will tap into to develop a global education business.

-- Promethean's shift from solely being an education hardware provider towards also being a software provider has depleted Promethean's cash reserves and, accordingly, Promethean would benefit from financial support.

-- NetDragon has developed a wide network of supplier and vendor relationships in Asia which could assist in lowering Promethean's cost base and improving gross margins.

-- NetDragon believes that with sufficient financial backing, Promethean's management team and key employees would be able to focus on developing and rolling out new products which are core to Promethean's future.

Promethean's and NetDragon's management teams would be complementary

-- Promethean's management team has significant experience in product development and go-to-market in the education market, while NetDragon's management have significant experience in product development and commercialisation of products in the mobile internet space. As mobile and online technologies become increasingly prominent in the education field, the combination of the experience and skillset of both management teams could become highly synergistic.

-- Both management teams have a similar vision for the future of Promethean and would leverage on each team's experience to ensure a successful future.

   4.     Recommendation by the Promethean Directors

The Promethean Directors, who have been so advised by Gleacher Shacklock as to the financial terms of the Offer, consider the terms of the Offer to be fair and reasonable. In providing advice to the Promethean Directors, Gleacher Shacklock has taken into account the commercial assessments of the Promethean Directors.

Accordingly, the Promethean Directors intend unanimously to recommend that Promethean Shareholders accept the Offer, as Graham Howe, Philip Rowley, Jim Marshall, Ian Baxter and Lord Puttnam, being the Promethean Directors who hold Promethean Shares, have irrevocably undertaken to do in respect of their own beneficial holdings of 11,421,048 Promethean Shares representing, in aggregate, approximately 5.62 per cent. of the ordinary share capital of Promethean in issue on 9 July 2015, being the last Business Day prior to the date of this announcement.

Further details of these irrevocable undertakings are set out in paragraph 7 below and Appendix 3 to this announcement.

   5.     Background to and reasons for the recommendation of the Promethean Directors

In recent years, as the classroom hardware market has become more mature, Promethean has been focused on developing its software and online activities. Early this year, Promethean launched "ClassFlow", a comprehensive institutional delivery system, which has been generating significant interest from potential users.

The costs of developing and launching ClassFlow have consumed significant financial resources over the last two years. In considering the Offer, the Promethean Directors have been mindful that the financial resources currently available to Promethean are insufficient to exploit the potential that ClassFlow offers. Moreover, although Promethean has been encouraged by the interest shown by potential customers in ClassFlow, revenues for the current year are expected to be modest and the rate of market acceptance that it will experience remains uncertain.

Accordingly, the Promethean Directors concluded that it was in the interests of Promethean Shareholders to explore with NetDragon whether they could secure an offer that both provided Promethean with the resources of a larger group and shareholders with a price that appropriately reflects Promethean's potential.

   6.     HK Listing Rules implications and NetDragon Shareholder approval

The acquisition of the Promethean Shares by Digital Train pursuant to the Offer constitutes a "very substantial acquisition" for NetDragon (being the majority controlling shareholder of Digital Train) under the HK Listing Rules, and is subject to the applicable announcement and shareholder approval requirements under the HK Listing Rules. The HK Listing Rules require the acquisition of the Promethean Shares to be approved by a simple majority of those NetDragon Shareholders which attend and vote at the NetDragon General Meeting prior to the Offer being declared unconditional in all respects. NetDragon Shareholders holding, in aggregate, approximately 50.33 per cent. of the issued voting share capital of NetDragon have irrevocably undertaken to vote in favour of any resolutions to approve the acquisition of the Promethean Shares pursuant to the Offer at the NetDragon General Meeting.

A circular containing information regarding the Offer, the notice to convene the NetDragon General Meeting to approve the Offer and certain other information as required under the HK Listing Rules is expected to be despatched to NetDragon Shareholders in mid to late August and the NetDragon General Meeting is currently expected to be held by early September. The NetDragon Directors consider that the acquisition of Promethean Shares pursuant to the Offer is fair and reasonable and is in the interests of the NetDragon Shareholders as a whole.

   7.    Irrevocable undertakings

NetDragon and Digital Train have received irrevocable undertakings to accept (or procure the acceptance of) the Offer from the Cann Trusts in respect of, in aggregate, a total of 60,553,283 Promethean Shares representing approximately 29.80 per cent. of the ordinary share capital of Promethean in issue on 9 July 2015, being the last Business Day prior to the date of this announcement. In addition, the Cann Trusts beneficially hold 4,000,000 Promethean Shares (representing approximately 1.97 per cent. of the ordinary share capital of Promethean in issue on 9 July 2015, being the last Business Day prior to the date of this announcement) which are pledged in favour of, and which are registered in the name of, Barclayshare Nominees Limited (the "Pledged Shares"). The trustees of the R.J. Cann Discretionary Trust have agreed to use their reasonable efforts to procure that Barclayshare Nominees Limited accepts the Offer in respect of the Pledged Shares.

NetDragon and Digital Train have also received irrevocable undertakings to accept (or procure the acceptance of) the Offer from Graham Howe, Philip Rowley, Jim Marshall, Ian Baxter and Lord Puttnam, being the Promethean Directors who hold Promethean Shares, representing, in aggregate, approximately 5.62 per cent. of the ordinary share capital of Promethean in issue on 9 July 2015, being the last Business Day prior to the date of this announcement.

Therefore, in total, NetDragon and Digital Train have received irrevocable undertakings to accept (or procure the acceptance of) the Offer in respect of aggregate holdings of a total of 71,974,331 Promethean Shares which represent approximately 35.42 per cent. of the ordinary share capital of Promethean in issue on 9 July 2015, being the last Business Day prior to the date of this announcement.

Further details of these irrevocable undertakings are set out in Appendix 3 to this announcement.

NetDragon and Digital Train have received a letter of intent to accept (or procure the acceptance of) the Offer from Aberforth Partners LLP (on behalf of its clients) in respect of, in aggregate, a total of 45,360,369 Promethean Shares representing approximately 22.32 per cent. of the ordinary share capital of Promethean in issue on 9 July 2015, being the last Business Day prior to the date of this announcement.

Further details of this letter of intent are set out in Appendix 3 to this announcement.

   8.     Information relating to the NetDragon Group

NetDragon

NetDragon, headquartered in Fuzhou City of Fujian Province of the PRC, is a leading online game and mobile internet platform developer and operator in the PRC and is committed to becoming a pioneer in developing a transformational online and mobile education ecosystem platform. NetDragon underwent an IPO in 2007 and migrated to the Main Board of The Stock Exchange of Hong Kong Limited on 24 June 2008. NetDragon's market capitalisation on 9 July 2015 (being the last Business Day prior to the date of this announcement) was HK$11.8 billion (US$1.5 billion).

Leveraging its advanced technologies, research and development capabilities, deep market insight and extensive global perspective, NetDragon launched a series of original and proprietary online games, mobile games and mobile application products and has become a forerunner in China's online game and mobile internet industries and a pioneer in overseas market expansion.

NetDragon is also one of the most successful serial-entrepreneurial mobile internet companies in China. In 2008, "91 Assistant" was launched by NetDragon and is one of the most popular smart phone management tools for smart phone users. In October 2013, NetDragon completed the sale of 91 Wireless Websoft Limited and its subsidiaries to Baidu Limited for US$1.85 billion, the largest M&A transaction in the mobile internet space in China.

NetDragon is currently developing a new strategic business - online and mobile education. The company's vision in the education space is to develop a game-changing online and mobile education ecosystem. NetDragon intends to achieve this vision by leveraging its proven world class mobile internet and gaming expertise, large-scale technology resources and team infrastructure that was built out of scaling several successful businesses since its inception. The company is currently in product development stage with the high-level roadmap to create a holistic, integrated ecosystem product that covers best-in-class software, hardware, content and social network, and to be commercialised and scaled with a mobile internet strategy.

Being a publicly listed company in Hong Kong with a strong balance sheet, NetDragon has the financial resources to fund the creation of "101 Education" with over approximately US$450 million of net cash on hand. In addition to financial resources, NetDragon has a large R&D workforce with over 50 per cent. of its 3,000 plus employees in R&D, as well as a wide network of partnerships and relationships with an extensive range of key service/content providers and distributors.

As at 31 December 2014, NetDragon had revenues of GBP100.9 million, operating profits of GBP26.4 million and profit for the year of GBP18 million.

The current NetDragon Directors are Liu Dejian, Liu Luyuan, Zheng Hui, Chen Hongzhan, Lin Dongliang, Charles Chao Guowei, Lee Kwan Hung and Liu Sai Keung Thomas.

Digital Train and other NetDragon Group companies

Digital Train is an investment holding company for the NetDragon Group's interests in the online education market, including in particular the development of K-12, vocational, non-academic credential and lifelong educational products. NetDragon indirectly owns 86.15 per cent. of the ordinary issued share capital of Digital Train, as set out in the diagram below:

The remainder of the share capital of Best Assistant Education (which comprises ordinary shares and preferred shares) is held as follows:

(a) Idea Gain holds the remaining 13.85 per cent. of the issued ordinary share capital of Best Assistant Education;

(b) NetDragon BVI holds a 19.05 per cent. interest in the preferred share capital of Best Assistant Education; and

(c) the Series A Shareholders hold the remaining 80.95 per cent. of the preferred share capital of Best Assistant Education.

The current director of Digital Train is Liu Dejian (also a NetDragon Director).

Idea Gain

Idea Gain is a service company which employs certain of the senior management of the NetDragon Group. It is wholly-owned by Cornell PTC Limited. Idea Gain holds its shareholding in Best Assistant Education on trust for certain employees of the NetDragon Group.

Series A Shareholders

The Series A Shareholders are IDG-Accel China Growth Fund L.P., IDG-Accel China Growth Fund-A L.P., IDG-Accel China Investors L.P., Vertex Asia Fund Pte. Ltd., Alpha Animation and Culture (Hong Kong) Company Limited, Catchy Holdings Limited, Creative Sky International Limited and DJM.

DJM

DJM is owned as to 95.36 per cent. by Mr. Liu Dejian (a director of both NetDragon and the sole director of Digital Train) and 4.64 per cent. by Mr. Zheng Hui (a director of NetDragon). DJM is deemed to be acting in concert with Digital Train for the purposes of the Offer.

Further information on the NetDragon Group will be contained in the Offer Document.

   9.     Information relating to Promethean

Promethean is a global leader in the interactive learning technology market. Promethean's interactive display boards and learner response systems serve as integrated interactive tools and resources that can be used individually or combined in a classroom environment. Supporting and enhancing the company's hardware business line, Promethean has developed "Promethean Planet", one of the world's largest online interactive whiteboard communities and "ClassFlow", a comprehensive instructional delivery system that increases interaction between the teacher and the student by providing interactive and collaborative use of classroom devices, digital curriculum and assessments for learning.

Promethean has 590 employees in 8 regional offices around the world, including the UK, the US, France, Germany and China which, together, cover sales in over 100 countries.

As at December 2014, Promethean had revenues of GBP118.2 million, an adjusted EBITDA of GBP0.8 million and a net loss for the year of GBP16.5 million.

10. Management, employees and governance

NetDragon recognises the contributions made by Promethean's management and employees to Promethean's success and believes that they are very important to the future development of Promethean.

Although NetDragon does not have plans to materially change the Promethean Group's organisational structure, NetDragon may adjust the Promethean Group's cost base after completion to explore savings in light of factors including market environment, financial performance and the pace of business development opportunities.

NetDragon confirms that, following the Offer becoming or being declared unconditional in all respects, NetDragon will fully safeguard the existing employment rights of all Promethean employees in accordance with contractual and statutory requirements. In addition, NetDragon intends to comply with all of the pension obligations in relation to Promethean's employees and other members of Promethean's pension schemes.

11. Financing

The cash consideration payable by Digital Train to Promethean Shareholders under the Offer will be financed from the NetDragon Group's existing cash resources.

VSA Capital, financial adviser to NetDragon and Digital Train, is satisfied that sufficient resources are available to Digital Train to satisfy, in full, the cash consideration payable to Promethean Shareholders under the terms of the Offer.

12. Structure of the Offer

Terms and Conditions

The Offer is conditional upon, among other things, valid acceptances being received (and not, where permitted, withdrawn) by no later than 1.00 p.m. on the First Closing Date (or such later time(s) and/or date(s) as Digital Train may, subject to the Code or with the consent of the Panel, decide) in respect of such number of Promethean Shares which carry in aggregate not less than 90 per cent. (or such lower percentage as Digital Train may, subject to the Code, decide) in nominal value of Promethean Shares in aggregate and of the voting rights attached to those shares.

The Offer will also be subject to the Conditions and further terms set out or referred to in Appendix 1 and to be set out in the Offer Document and the Form of Acceptance.

Takeover offer

It is intended that the Offer will be implemented by means of a takeover offer under section 974 of the Companies Act and the Code.

Digital Train reserves the right, subject to the consent of the Panel, to effect the Offer by way of a scheme of arrangement under Part 26 of the Companies Act. Any such scheme of arrangement would be implemented on the same terms (subject to appropriate amendment) as the Offer. References to the Offer and the Offer Document in this announcement shall include, where applicable, any such scheme of arrangement.

Publication of the Offer Document and the Form of Acceptance

The Offer Document and the Form of Acceptance accompanying the Offer Document will be published (save with the consent of the Panel) within 28 days of this announcement. The Offer Document and accompanying Form of Acceptance will be made available to all Promethean Shareholders at no charge to them. Promethean Shareholders are urged to read the Offer Document and the accompanying Form of Acceptance when they are sent to them because they will contain important information.

Compulsory acquisition, delisting and cancellation of trading and re-registration

If Digital Train receives acceptances under the Offer in respect of, and/or otherwise acquires or contracts to acquire, 90 per cent. or more in nominal value of the Promethean Shares to which the Offer relates and of the voting rights carried by those shares, Digital Train intends to exercise its rights pursuant to and in accordance with sections 974 to 991 (inclusive) of the Companies Act to acquire compulsorily any remaining Promethean Shares to which the Offer relates on the same terms as the Offer.

After the Offer becomes or is declared unconditional in all respects and if Digital Train has, by virtue of its shareholdings and acceptances of the Offer acquired, or agreed to acquire, Promethean Shares representing at least 75 per cent. of the voting rights of the Promethean Shares in aggregate, Digital Train intends to procure the making of an application by Promethean for cancellation, respectively, of the trading in Promethean Shares on the London Stock Exchange's main market for listed securities and of the listing of the Promethean Shares on the Official List. A notice period of not less than 20 Business Days before the cancellation will commence on the date on which the Offer becomes or is declared unconditional in all respects provided Digital Train has attained 75 per cent. or more of the voting rights as described above or otherwise as soon as Digital Train attains 75 per cent. or more of the voting rights as described above. Delisting would significantly reduce the liquidity and marketability of any Promethean Shares not assented to the Offer.

It is also intended that, following the Offer becoming or being declared unconditional in all respects and assuming the cancellation of the admission to trading on the London Stock Exchange's main market for listed securities of the Promethean Shares and of the listing of the Promethean Shares on the Official List occurs, Promethean will be re-registered as a private company under the relevant provisions of the Companies Act.

13. Disclosure of interests in relevant securities

As at the close of business on 9 July 2015, being the last Business Day prior to the date of this announcement, neither NetDragon, Digital Train nor any persons acting in concert with them (including DJM) held any interest in Promethean.

14. Promethean Share Schemes

The Offer will extend to any Promethean Shares which are unconditionally allotted or issued under the Promethean Share Schemes before the date on which the Offer closes. Digital Train intends to make appropriate proposals to participants in the Promethean Share Schemes subject to the Offer becoming or being declared unconditional in all respects.

Participants in the Promethean Share Schemes will be contacted regarding the effect of the Offer on their rights under the Promethean Share Schemes and provided with further details concerning the proposals which will be made to them in due course.

15. The NED Additional Services Payments and other management arrangements

NED Additional Services Payments

For additional services carried out by the following non-executive Promethean Directors outside of the normal business of the Promethean Board in connection with the Offer, the following payments (the "NED Additional Services Payments") are to be made to such directors, as follows:

          Non-executive Promethean Director                               Payment 
          Graham Howe                                                                       GBP22,667 
          Jackie Yeaney                                                                       GBP16,000 
          Judy Verses                                                                          GBP15,333 
          Lord Puttnam                                                                        GBP15,167

Total GBP69,167

If the Offer becomes or is declared unconditional in all respects, the NED Additional Services Payments will be paid by Promethean with funds provided by NetDragon or Digital Train on the next practicable payroll date after the Offer becomes or is declared unconditional in all respects. If the Offer does not become unconditional in all respects, the NED Additional Services Payments shall be paid by Promethean and Promethean shall bear the cost thereof. The non-executive Promethean Directors have confirmed that they intend to resign as Promethean Directors subject to and on the completion of the Offer.

October 2014 Awards

In September 2014, Promethean granted awards under the Promethean Share Schemes to a number of participants. As disclosed in Promethean's published annual report and accounts for the period ended 31 December 2014, following consultation with Promethean's largest shareholders on the topic and approval by Promethean's remuneration committee, Promethean had intended to also make awards under the Promethean Share Schemes to Jim Marshall and Ian Baxter. These awards were the second tranche of a two part award grant, the first tranche of which had been granted in September 2014. The details of these awards, together with an additional award that Promethean had intended to be granted to Wendy Baker (Promethean's company secretary), are as follows:

-- Jim Marshall: a PSP award over 800,000 Promethean Shares at a nil exercise price (worth GBP320,000 on the basis of the Offer price of 40 pence per Promethean Share);

-- Ian Baxter: a PSP award over 530,000 Promethean Shares at a nil exercise price (worth GBP212,000 on the basis of the Offer price of 40 pence per Promethean Share); and

-- Wendy Baker: an award of stock appreciation rights pursuant to the PSP over 40,000 Promethean Shares at an exercise price of GBP0.27 (worth GBP5,200 on the basis of the Offer price of 40 pence per Promethean Share),

(the "October 2014 Awards").

Following the initial approach to Promethean by NetDragon in relation to the Offer, it was decided, in consultation with the Panel, that the October 2014 Awards should not be made at the time originally proposed due to the intended recipients' knowledge of the proposed Offer. It was, however, acknowledged that the October 2014 Awards should be made at the earliest opportunity.

No such opportunity has subsequently arisen. Accordingly, consistent with the approach taken in relation to awards under the Promethean Share Schemes (which will vest in full) and with the Panel's consent, Promethean will, on the next practicable payroll date after the date on which the Offer becomes or is declared unconditional in all respects, pay a cash sum payment to each of Jim Marshall, Ian Baxter and Wendy Baker equal to the gain that such employee would have made in respect of his or her respective October 2014 Award (being the difference between the price per Promethean Share offered by Digital Train Limited under the terms of the Offer and the exercise price of that October 2014 Award (if any)). NetDragon has agreed to bear (or to procure that Digital Train will bear) the cost of the October 2014 Awards.

Gleacher Shacklock, as Promethean's adviser for the purposes of Rule 3 of the Code, has confirmed that, in its opinion, the NED Additional Services Payments and the October 2014 Awards are fair and reasonable so far as the Independent Shareholders are concerned.

Save as described in this paragraph 15, there have only been limited discussions with respect to future management incentivisation arrangements and no such arrangements have been proposed or agreed with the management of Promethean.

16. Offer related arrangements

Confidentiality Agreement

NetDragon and Promethean entered into a mutual Confidentiality Agreement dated 3 October 2014 pursuant to which each of NetDragon and Promethean has undertaken, among other things, to keep certain information relating to the Offer and the other party confidential and not to disclose it to third parties (other than to permitted parties) unless required by law or regulation.

Co-operation Agreement

On 10 July 2015, NetDragon, Digital Train and Promethean entered into the Co-operation Agreement pursuant to which, among other things, NetDragon, Digital Train and Promethean have agreed to certain undertakings and to co-operate and provide reasonable information and assistance (a) for the preparation and publication of the Offer Document, (b) for the preparation and publication of the NetDragon Circular and (c) in relation to any regulatory clearances and authorisations necessary to implement the Offer.

By way of compensation for any loss suffered by Promethean in connection with the preparation and negotiation of the acquisition of the Promethean Shares by Digital Train pursuant to the Offer, Digital Train has agreed to pay Promethean GBP3 million if the Offer is not approved at the NetDragon General Meeting (including any adjournment thereof) within 81 days of the posting of the Offer Document.

The Co-operation Agreement also provides that Promethean shall pay, on the next practicable payroll date after the Offer becomes or is declared unconditional in all respects: (i) a cash sum payment to each of Jim Marshall, Ian Baxter and Wendy Baker equal to the gain that such employee would have made in respect of his or her respective October 2014 Awards (being the difference between the price per Promethean Share offered by Digital Train Limited under the Offer and the exercise price of that October 2014 Award (if any)) as further described at paragraph 15 of this announcement; and (ii) cash sum payments of an amount of not more than GBP117,444 to the holders of the Phantom Cash Awards. NetDragon has agreed to bear (or to procure that Digital Train will bear) the cost of all such payments.

The Co-operation Agreement also records Digital Train and Promethean's intention to implement the Offer by way of a takeover offer, subject to the ability of Digital Train to proceed by way of a scheme of arrangement in certain circumstances.

The Co-operation Agreement also contains provisions that will apply in respect of the Promethean Share Schemes and certain other employee incentive arrangements.

17. Documents available on websites

Copies of the following documents will be published by no later than 12 noon on the Business Day immediately following the date of this announcement on NetDragon's website http://ir.netdragon.com/ and on Promethean's website at http://www.prometheanworld.com/ and will be made available until the end of the Offer Period:

   --    this announcement;

-- the irrevocable undertakings and letter of intent referred to in paragraph 7 above and summarised in Appendix 3 to this announcement;

   --    the Confidentiality Agreement; and 
   --    the Co-operation Agreement.

18. General

This announcement does not constitute an offer or an invitation to purchase or subscribe for any securities.

Your attention is drawn to the further information contained in the Appendices to this announcement which form part of, and should be read in conjunction with, this announcement.

There are no agreements or arrangements to which NetDragon and/or Digital Train is a party which relate to the circumstances in which Digital Train may or may not invoke or seek to invoke a Condition.

The Offer will be subject to the Conditions and further terms set out in Appendix 1 to this announcement and to the full terms and conditions which will be set out in the Offer Document and the Form of Acceptance. Appendix 2 contains the bases and sources of certain information used in this announcement. Appendix 3 contains details of the irrevocable undertakings and letter of intent received in relation to the Offer that are referred to in this announcement. Appendix 4 to this announcement contains definitions of certain terms used in this announcement.

Enquiries:

NetDragon and Digital Train

Simon Leung, Vice Chairman +852 285 078 28

Ben Yam, Chief Financial Officer

VSA Capital (financial adviser to NetDragon and Digital Train)

Andrew Raca +44 (0)203 005 5000

James Asensio

Promethean

Philip Rowley, Chairman +44 (0)1254 298 598

Jim Marshall, Chief Executive Officer

Gleacher Shacklock (financial adviser to Promethean)

Edward Cumming-Bruce +44 (0)207 484 1150

Citigate Dewe Rogerson Consultancy (public relations adviser to Promethean)

Anthony Carlisle +44 (0)7973 611 888

Important notices relating to financial advisers

Further information

This announcement does not constitute a prospectus or prospectus-equivalent document.

Overseas jurisdictions

Notice to US holders of Promethean Shares

Forward looking statements

No profit forecasts or estimates

Disclosure requirements of the Code

Rule 2.10 disclosure

Information relating to Promethean Shareholders

Rounding

Requesting hard copy documents

Publication on website

APPENDIX 1

CONDITIONS AND FURTHER TERMS OF THE OFFER

PART 1

CONDITIONS OF THE OFFER

   1.      Conditions to the Offer

The Offer shall be subject to the following Conditions:

Acceptance Condition

(a) valid acceptances being received (and not, where permitted, withdrawn) by no later than 1.00 p.m. on the First Closing Date (or such later time(s) and/or date(s) as Digital Train may, subject to the Code or with the consent of the Panel, decide) in respect of such number of Promethean Shares which carry in aggregate not less than 90 per cent. (or such lower percentage as Digital Train may, subject to the Code, decide) in nominal value in aggregate of Promethean Shares to which the Offer relates and of the voting rights attached to those shares, provided that this Condition will not be satisfied unless Digital Train and/or any of NetDragon's subsidiaries shall have acquired, or agreed to acquire, pursuant to the Offer or otherwise, Promethean Shares carrying more than 50 per cent. of the voting rights normally exercisable at a general meeting of Promethean, including for this purpose (except to the extent otherwise agreed by the Panel) any such voting rights attaching to any Promethean Shares that are unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise.

For the purposes of this Condition:

(i) Promethean Shares which have been unconditionally allotted but not issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise, shall be deemed to carry the voting rights they will carry on issue;

(ii) the expression "Promethean Shares to which the Offer relates" shall be construed in accordance with Chapter 3 of Part 28 of the Companies Act;

(iii) Promethean Shares (if any) that cease to be held in treasury before the Offer becomes or is declared unconditional as to acceptances are Promethean Shares to which the Offer relates; and

(iv) valid acceptances shall be deemed to have been received in respect of Promethean Shares which are treated for the purposes of Part 28 of the Companies Act as having been acquired or contracted to be acquired by Digital Train by virtue of acceptances of the Offer;

NetDragon Shareholder Approval

(b) the passing at the NetDragon General Meeting (or at any adjournment of such meeting) of such resolution or resolutions as are required under the HK Listing Rules or other applicable regulations or applicable laws, in order to approve, implement and effect the Offer and the acquisition of Promethean Shares by Digital Train pursuant to the Offer;

Third Party Clearances

(c) other than in relation to the NetDragon Shareholder approval referred to in paragraph 1(b) above, no government, central bank, ministry, national, state, municipal or local government (including any subdivision or commission or other authority thereof) or governmental, quasi-governmental (including the European Union), supranational, statutory, administrative or regulatory body or association, institution or agency (including any trade agency) or any court or other body (including any professional or environmental body) or person in any jurisdiction, including, for the avoidance of doubt, the Panel and the Financial Conduct Authority (each a "Relevant Authority") having decided to take, institute or threaten any action, proceeding, suit, investigation, enquiry or reference or enacted, made or proposed and there not continuing to be outstanding any statute, regulation, order or decision that would or might reasonably be expected to (in each case to an extent which is material in the context of the Wider Promethean Group taken as whole):

(i) make the acquisition or the proposed acquisition of Promethean Shares, or control or management of Promethean by Digital Train or any member of the Wider NetDragon Group void, unenforceable or illegal in any jurisdiction or directly or indirectly prohibit or otherwise materially restrict, delay or interfere with the implementation of, or impose material additional conditions or obligations with respect to, or otherwise materially challenge or require amendment to the terms of, the Offer or the proposed acquisition of any Promethean Shares, or control or management of Promethean by Digital Train or any member of the Wider NetDragon Group;

(ii) require, prevent or materially delay the divestiture (or materially alter the terms of any proposed divestiture) by the Wider NetDragon Group or the Wider Promethean Group of all or any part of their respective businesses, assets or properties or impose any material limitation on their ability to conduct all or a material portion of their respective businesses and to own, control or manage any of their respective material assets or properties;

(iii) impose any material limitation on, or result in any material delay in, the ability of any member of the Wider NetDragon Group to acquire or hold or to exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities (or the equivalent) in, or to exercise management control over, any member of the Wider Promethean Group or on the ability of the Wider Promethean Group to hold or exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities (or the equivalent) in, or to exercise management control over, any other member of the Wider Promethean Group;

(iv) require any member of the Wider NetDragon Group or of the Wider Promethean Group to acquire or offer to acquire any shares or other securities (or the equivalent) or interest in any member of the Wider Promethean Group or any member of the Wider NetDragon Group owned by a third party (other than in the implementation of the Offer);

(v) require the divestiture by any member of the Wider NetDragon Group of any shares, securities or other interests in any member of the Wider Promethean Group;

(vi) impose any material limitation on, or result in any material delay in, the ability of any member of the Wider NetDragon Group or the Wider Promethean Group to integrate or co-ordinate its business, or any part of it, with the businesses or any part of the businesses of any other member of the Wider NetDragon Group and/or the Wider Promethean Group;

(vii) result in any member of the Wider Promethean Group ceasing to be able to carry on business under any name under which it presently does so; or

(viii) otherwise materially adversely affect the business, assets, financial or trading position or profits or prospects of any member of the Wider NetDragon Group or the Wider Promethean Group,

and all applicable waiting and other time periods (including extensions thereof) during which any such Relevant Authority could decide to take, institute or threaten any such action, proceeding, suit, investigations, enquiry or reference having expired, lapsed or been terminated;

(d) other than in relation to the NetDragon Shareholder approval referred to in paragraph 1(b) above, all material filings, applications and/or notifications which are necessary or reasonably considered appropriate by Digital Train and/or NetDragon having been made and all relevant waiting periods and other time periods (including any extensions thereof) under any applicable legislation or regulation of any jurisdiction having expired, lapsed or been terminated and all applicable statutory or regulatory obligations in any jurisdiction having been complied with in each case in respect of the Offer and the acquisition or the proposed acquisition of any shares or other securities in, or control or management of, Promethean or any member of the Wider Promethean Group by any member of the Wider NetDragon Group or the carrying on by any member of the Wider Promethean Group of its business;

(e) other than in relation to the NetDragon Shareholder approval referred to in paragraph 1(b) above, all material authorisations, orders, grants, recognitions, confirmations, licences, consents, clearances, permissions and approvals which are necessary or reasonably considered appropriate by Digital Train and/or NetDragon in any jurisdiction for or in respect of the Offer and the proposed acquisition of Promethean Shares, or control of Promethean, by Digital Train or any member of the Wider NetDragon Group being obtained on terms and in a form reasonably satisfactory to Digital Train from appropriate Relevant Authorities, or from any persons or bodies with whom any member of the Wider NetDragon Group or the Wider Promethean Group has entered into contractual arrangements or other material business relationships, and such authorisations, orders, grants, recognitions, confirmations, licences, consents, clearances, permissions and approvals, together with all authorisations, orders, grants, recognitions, confirmations, licences, consents, clearances, permissions and approvals necessary or reasonably considered appropriate for any member of the Wider Promethean Group to carry on its business, remaining in full force and effect and no intimation of any intention to revoke, suspend, restrict or modify or not to renew any of the same having been made and all necessary statutory or regulatory obligations in any jurisdiction having been complied with;

Confirmation of absence of adverse circumstances

(f) except as Disclosed, there being no provision of any agreement, arrangement, licence or other instrument to which any member of the Wider Promethean Group is a party or by or to which any such member or any of its material assets is or may be bound, entitled or subject which, as a result of the implementation of the Offer or the acquisition or proposed acquisition by Digital Train or any member of the Wider NetDragon Group of any Promethean Shares, or change in the control or management of Promethean or otherwise, would or might reasonably be expected to result in (in each case to an extent which is material in the context of the Wider Promethean Group taken as a whole):

(i) any monies borrowed by or any other indebtedness (actual or contingent) of, or any grant available to, any member of the Wider Promethean Group becoming repayable, or capable of being declared repayable, immediately or earlier than the stated repayment date or the ability of such member to borrow monies or incur any indebtedness being withdrawn or inhibited;

(ii) the creation or enforcement of any mortgage, charge or other security interest over the whole or any material part of the business, property or assets of any member of the Wider Promethean Group or any such mortgage, charge or other security interest (whenever arising or having arisen) becoming enforceable;

(iii) any assets or interest of the Wider Promethean Group being or falling to be disposed of or ceasing to be available to any member of the Wider Promethean Group or any right arising under which any such asset or interest could be required to be disposed of or could cease to be available to any member of the Wider Promethean Group;

(iv) the interest or business of any member of the Wider Promethean Group in or with any other person, firm or company (or any agreements or arrangements relating to such interest or business) being terminated or materially adversely modified or affected;

(v) any member of the Wider Promethean Group ceasing to be able to carry on business under any name under which it presently does so;

(vi) the value of any member of the Wider Promethean Group or its financial or trading position or prospects being materially prejudiced or adversely affected;

(vii) any such agreement, arrangement, licence or other instrument being terminated or adversely modified or any onerous obligation arising or any adverse action being taken or arising thereunder;

(viii) the creation of any material liabilities (actual or contingent) by any member of the Wider Promethean Group, other than trade creditors or other liabilities incurred in the ordinary course of business; or

(ix) any requirement on any member of the Wider Promethean Group to acquire, subscribe, pay up or repay any shares or other securities (or the equivalent),

and no event having occurred which, under any provision of any agreement, arrangement, licence or other instrument to which any member of the Wider Promethean Group is a party or by or to which any such member or any of its assets may be bound or be subject, will result in any events or circumstances as are referred to in this paragraph (in each case to an extent which is material in the context of the Wider Promethean Group taken as a whole);

Non material transactions, claims or changes in the conduct of the business of Promethean

   (g)     except as Disclosed, no member of the Wider Promethean Group has since 31 December 2014:

(i) issued or agreed to issue or authorised or proposed the issue of additional shares of any class, or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible or exchangeable securities or transferred or sold (or agreed to transfer or sell) any shares out of treasury (except, where relevant, as between Promethean and its wholly owned subsidiaries or between its wholly owned subsidiaries) and except in connection with the on-going operation of the Promethean Share Schemes (in accordance with their respective terms) or as provided for in the Co-operation Agreement;

(ii) recommended, declared, paid or made or resolved to recommend, declare, pay or make any bonus, dividend or other distribution, whether payable in cash or otherwise, other than a distribution by a wholly-owned subsidiary of Promethean;

(iii) other than pursuant to the Offer, implemented or authorised any merger or demerger or (except for transactions between Promethean and its wholly-owned subsidiaries, or between its wholly-owned subsidiaries or transactions in the ordinary course of business) acquired or disposed of or transferred, mortgaged or charged, or created any other security interest over, any material asset or any right, title or interest in any asset (in each case to an extent which is material in the context of the Wider Promethean Group taken as a whole);

(iv) (except for transactions between Promethean and its wholly-owned subsidiaries, or between its wholly-owned subsidiaries or transactions in the ordinary course of business) entered into, or authorised the entry into of, any joint venture, asset or profit sharing arrangement, partnership or merger of businesses or corporate entities;

(v) (except for transactions between Promethean and its wholly-owned subsidiaries, or between its wholly-owned subsidiaries or transactions in the ordinary course of business) other than pursuant to the Offer, implemented or authorised any reconstruction, amalgamation, scheme or other transaction or arrangement with a substantially equivalent effect;

(vi) (except for transactions between Promethean and its wholly-owned subsidiaries, or between its wholly-owned subsidiaries or transactions in the ordinary course of business) purchased, redeemed or repaid any of its own shares or other securities or reduced or made or authorised any other change in its share capital;

(vii) (except for transactions between Promethean and its wholly owned subsidiaries or between its wholly owned subsidiaries or transactions in the ordinary course of business) made or authorised any change in its loan capital or issued or authorised the issue of any debentures or incurred or increased any indebtedness or contingent liability (in each case to an extent which is material in the context of the Wider Promethean Group taken as a whole);

(viii) entered into, varied or terminated, or authorised the entry into, variation or termination of, any contract, commitment or arrangement (whether in respect of capital expenditure, real estate or otherwise) which is outside the ordinary course of business or which is of a long term, onerous or unusual nature or magnitude or which involves, or might reasonably be expected to involve, an obligation of a nature or magnitude which is restrictive on the business of any member of the Wider Promethean Group (in each case to an extent which is material in the context of the Wider Promethean Group taken as a whole);

(ix) been unable or deemed unable, or admitted in writing that it is unable, to pay its debts as they fall due or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business (in each case to an extent which is material in the context of the Wider Promethean Group taken as a whole);

(x) commenced negotiations with any of its creditors or taken any step with a view to rescheduling or restructuring any of its indebtedness or entered into a composition, compromise, assignment or arrangement with any of its creditors whether by way of a voluntary arrangement, scheme of arrangement, deed of compromise or otherwise;

(xi) (other than in respect of a subsidiary of Promethean which is dormant and solvent at the relevant time) taken any corporate action or had any legal proceedings started, served or threatened against it or any documents filed or faxed in court for its winding-up (voluntary or otherwise), dissolution or reorganisation (or for any analogous proceedings or steps in any jurisdiction) or for the appointment of a liquidator, provisional liquidator, receiver, administrator, administrative receiver, trustee or similar officer (or for the appointment of any analogous person in any jurisdiction) of all or any of its assets and revenues or had notice given of the intention to appoint any of the foregoing to it (in each case to an extent which is material in the context of the Wider Promethean Group taken as a whole);

(xii) except in the ordinary course of business, waived, compromised, settled, abandoned or admitted any dispute, claim or counter-claim whether made or potential and whether by or against any member of the Wider Promethean Group (in each case to an extent which is material in the context of the Wider Promethean Group taken as a whole);

   (xiii)        made any material alteration to its constitutional documents;

(xiv) entered into, or varied the terms of, or terminated or given notice of termination of, any service agreement or arrangement with any director or senior executive of the Wider Promethean Group;

(xv) proposed, agreed to provide, or agreed to modify the terms of, any share option scheme, incentive scheme or other benefit in such a way as to constitute a material change relating to the employment or termination of employment of a material category of persons employed by the Wider Promethean Group, or in such a way as to constitute a material change to the terms or conditions of employment of any senior employee of the Wider Promethean Group other than, in each case, in accordance with the terms of the Offer, as permitted pursuant to the Co-operation Agreement, or as otherwise agreed with NetDragon and/or Digital Train;

(xvi) made or consented to any material change to the terms of the trust deeds constituting the pension schemes established for its directors and/or employees and/or their dependants or to the benefits which accrue, or to the pensions which are payable thereunder, or to the basis on which qualification for or accrual or entitlement to such benefits or pensions are calculated or determined, or to the basis upon which the liabilities (including pensions) of such pension schemes are funded or made, or agreed or consented to, any change to the trustees, in each case to an extent which is material in the context of the Wider Promethean Group, taken as a whole, and other than in accordance with applicable law;

(xvii) save as between Promethean and its wholly-owned subsidiaries, granted any lease in respect of any of the leasehold or freehold property owned or occupied by it or transferred or otherwise disposed of any such property;

(xviii) taken or proposed to take any action which requires, or would require, the consent of the Panel or the approval of Promethean Shareholders in general meeting in accordance with, or as contemplated by, Rule 21.1 of the Code; or

(xix) entered into any contract, commitment or arrangement or passed any resolution or made any offer (which remains open for acceptance) with respect to, or proposed or announced any intention to effect or propose, any of the transactions, matters or events referred to in this paragraph;

   (h)     except as Disclosed, since 31 December 2014:

(i) no adverse change having occurred, and no circumstances having arisen which would or might reasonably be expected to result in any adverse change, in the business, assets, financial or trading position or profits or prospects of any member of the Wider Promethean Group which is material in the context of the Wider Promethean Group taken as a whole; and

(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings in any jurisdiction having been threatened in writing, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider Promethean Group or to which any member of the Wider Promethean Group is a party (whether as claimant or defendant or otherwise) and no investigation by any Relevant Authority or other investigative body against or in respect of any member of the Wider Promethean Group having been threatened in writing, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider Promethean Group (in each case to an extent which is material in the context of the Wider Promethean Group taken as a whole or in the context of the Offer);

(i) save as Disclosed, no contingent or other liability having arisen outside the ordinary course of business which would or might reasonably be expected to adversely affect any member of the Wider Promethean Group (in each case to an extent which is material in the context of the Wider Promethean Group taken as a whole);

   (j)      save as Disclosed, Digital Train  not having discovered that:

(i) any financial, business or other information concerning any member of the Wider Promethean Group publicly disclosed prior to the date of this announcement by any member of the Wider Promethean Group is materially misleading, contains a material misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading and which was not subsequently corrected before the date of this announcement by disclosure by, or on behalf of, the Wider Promethean Group through the publication of an announcement via a Regulatory Information Service (in each case to an extent which is material in the context of the Wider Promethean Group taken as a whole); or

(ii) any member of the Wider Promethean Group is subject to any liability, contingent or otherwise, other than in the ordinary course of business, which is material in the context of the Wider Promethean Group taken as a whole;

(k) save as Disclosed, Digital Train not having discovered that any past or present member of the Wider Promethean Group has:

(i) paid or agreed to pay any bribe including any "inducement fee", given or agreed to give any similar gift or benefit or paid or agreed to pay to a concealed bank account or fund to or for the account of, any customer, supplier, governmental official or employee, representative of a political party, or other person for the purpose of obtaining or retaining business or otherwise engaged in any activity, or done such things (or omitted to do such things) in contravention of the Bribery Act 2010, as amended, or the US Foreign Corrupt Practices Act of 1977, as amended; or

(ii) engaged in any business with or made any investments in, or made any payments to, (a) any government, entity or individual with which US persons or UK persons are prohibited from engaging in activities or doing business by US laws or regulations or UK laws or regulations, including the economic sanctions administered by the US Office of Foreign Assets Control or similar regulator in the UK or (b) any government, entity or individual targeted by any of the economic sanctions of the UK and administered by the Bank of England; and

   (l)      save as Disclosed, since the date of this announcement:

(i) no member of the Wider Promethean Group has lost its title to any intellectual property and no intellectual property owned by the Wider Promethean Group has been revoked, cancelled or declared invalid in any case to an extent which has a material adverse effect on the Wider Promethean Group taken as a whole;

(ii) no agreement regarding the use of any intellectual property licensed to or by any member of the Wider Promethean Group has been terminated or varied in any case to an extent which has a material adverse effect on the Wider Promethean Group taken as a whole; or

(iii) no claim has been filed suggesting that any member of the Wider Promethean Group has infringed the intellectual property rights of a third party and no member of the Wider Promethean Group has been found to have infringed the intellectual property rights of a third party in any case to an extent which has a material adverse effect on the Wider Promethean Group taken as a whole.

PART 2

CERTAIN FURTHER TERMS OF THE OFFER

1. Digital Train reserves the right (subject to the requirements of the Code and the Panel) to waive, in whole or in part, the Conditions in paragraphs (c) to (l) (inclusive) above.

2. If Digital Train is required by the Panel to make an offer for Promethean Shares under the provisions of Rule 9 of the Code, Digital Train may make such alteration to any of the Conditions, including Condition (a) above, and terms of the Offer as are necessary to comply with the provisions of that Rule.

3. The Offer will lapse unless all Conditions to the Offer are fulfilled or (if capable of waiver) waived or, where appropriate, determined by Digital Train to have been or remain satisfied by midnight on the date which is 21 days after the later of the First Closing Date and the date on which the Offer becomes or is declared unconditional as to acceptances (or such later date (if any) as Digital Train may, with the consent of the Panel or in accordance with the Code, decide).

4. The Offer will lapse, and will not proceed, if there is a Phase II CMA Reference or if Phase 2 European Commission proceedings are initiated or if, following a referral of the Offer by the European Commission under Article 9(1) of the European Council Merger Regulation to a competent authority in the United Kingdom, there is a Phase II CMA Reference, in any such case before 1.00 p.m. on the First Closing Date or the time and date at which the Offer becomes, or is declared, unconditional as to acceptances (whichever is the later).

5. If the Offer lapses, the Offer shall cease to be capable of further acceptance and accepting Promethean Shareholders and Digital Train shall cease to be bound by Forms of Acceptance submitted at or before the time when the Offer so lapses.

6. Under Rule 13.5 of the Code, Digital Train may not invoke a Condition so as to cause the Offer not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the Condition are of material significance to Digital Train in the context of the Offer. Conditions (a) and (b) above and paragraph 4 of this Part 2 of this Appendix 1 are not subject to this provision of the Code.

7. The Promethean Shares will be acquired by Digital Train fully paid and free from all liens, charges, encumbrances, rights of pre-emption and any other third party rights of any nature whatsoever and together with all rights attaching to them as at the date of this announcement or subsequently attaching or accruing to them, including, without limitation, voting rights and the right to receive and retain, in full, all dividends and other distributions (if any) declared, made or paid, or any other return of capital (whether by way of reduction of share capital or share premium account or otherwise) made on or after the date of this announcement. Accordingly, insofar as a dividend and/or distribution and/or a return of capital is proposed, declared, made, paid or payable by Promethean in respect of a Promethean Share on or after the date of this announcement, Digital Train reserves the right to reduce by the amount of the dividend and/or distribution and/or return of capital, the price payable under the Offer in respect of a Promethean Share, except insofar as the Promethean Share is or will be transferred pursuant to the Offer on a basis which entitles Digital Train alone to receive the dividend and/or distribution and/or return of capital but if that reduction in price has not been effected, the person to whom the price payable under the Offer is paid in respect of that Promethean Share will be obliged to account to Digital Train for the amount of such dividend and/or distribution and/or return of capital.

8. Digital Train reserves the right, subject to the prior consent of the Panel, to implement the Offer by way of a scheme of arrangement under Part 26 of the Companies Act. In such event, the Offer will be implemented on the same terms, so far as applicable, as those which would apply under a contractual offer, subject to appropriate amendments to reflect the change in method of effecting the Offer.

9. Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition.

10. The Offer will be governed by English law and be subject to the jurisdiction of the courts of England and Wales and to the Conditions and further terms set out in this announcement and in the Offer Document and Form of Acceptance. The Offer will be subject to the applicable requirements of the UK Listing Authority, the Financial Conduct Authority, the London Stock Exchange and the Code. This announcement does not constitute, or form part of, an offer or invitation to purchase Promethean Shares or any other securities.

11. The ability to effect the Offer in respect of persons resident in certain jurisdictions may be affected by the laws of those jurisdictions. Before taking any action in relation to the Offer, holders of Promethean Shares should inform themselves about and observe any applicable requirements.

12. Unless otherwise determined by Digital Train or required by the Code and permitted by applicable law and regulation:

(i) the Offer is not being, and will not be, made available, directly or indirectly, in or into or by the use of the mails of, or by any other means or instrumentality (including, without limitation, facsimile transmission, telex, telephone, internet or other forms of electronic transmission) of interstate or foreign commerce of, or by any facility of a national state or other securities exchange of any Restricted Jurisdiction and no person may vote using any such use, means, instrumentality or facility or from within any Restricted Jurisdiction; and

(ii) this announcement should not be forwarded or transmitted in or into any jurisdiction in which such act would constitute a violation of the relevant laws in such jurisdiction.

APPENDIX 2

GENERAL SOURCES OF INFORMATION AND BASES OF CALCULATION

In this announcement, unless otherwise stated, or the context otherwise requires, the following bases and sources have been used:

-- the financial information relating to the NetDragon Group is extracted from the audited consolidated financial statements of NetDragon for the relevant years, prepared in accordance with IFRS;

-- the financial information relating to the Promethean Group is extracted from the audited consolidated financial statements of Promethean for the relevant years, prepared in accordance with IFRS;

-- conversion of amounts in this announcement from HK$ to US$ has been effected at an exchange rate of 0.12901HK$ per US$ (source: Bloomberg);

-- conversion of amounts in this announcement from RMB to GBP has been effected at an exchange rate of 9.5333RMB per GBP (source: Bloomberg);

-- any references to the existing issued ordinary share capital of Promethean are based on 203,200,000 Promethean Shares in issue as at 9 July 2015 (being the last Business Day prior to the date of this announcement); and

   --      all prices for Promethean Shares are closing prices derived from Bloomberg.

The value of the Offer is calculated on the basis of the fully diluted number of Promethean Shares in issue as at 9 July 2015 (being the last Business Day prior to the date of this announcement), being 210,203,110 Promethean Shares.

APPENDIX 3

DETAILS OF IRREVOCABLE UNDERTAKINGS

 
 Name             Total Number of Promethean   Percentage of issued 
                   Shares in respect of         ordinary share capital 
                   which the undertaking        of Promethean 
                   has been given 
---------------  ---------------------------  ------------------------ 
 Cann Trusts            60,553,283(*)                  29.80% 
---------------  ---------------------------  ------------------------ 
 Graham Howe              10,891,162                    5.36% 
---------------  ---------------------------  ------------------------ 
 Philip Rowley             132,768                      0.07% 
---------------  ---------------------------  ------------------------ 
 Jim Marshall              143,973                      0.07% 
---------------  ---------------------------  ------------------------ 
 Ian Baxter                 3,145                       0.00% 
---------------  ---------------------------  ------------------------ 
 Lord Puttnam              250,000                      0.12% 
---------------  ---------------------------  ------------------------ 
 Total                    71,974,331                   35.42% 
---------------  ---------------------------  ------------------------

These irrevocable undertakings cease to be binding if:

(a) the Offer Document has not been posted within 28 days after this announcement (or within such longer period as Digital Train and Promethean, with the consent of the Panel, determine);

   (b)           the Offer closes, lapses or is withdrawn; or

(c) Digital Train announces, with the consent of the Panel, that it does not intend to make or proceed with the Offer and no new, revised or replacement Offer or scheme of arrangement is announced in accordance with Rule 2.7 of the Code within 10 business days of such announcement.

(*) In addition, to the 60,553,283 Promethean Shares the subject of the Cann Trusts irrevocable undertaking, the trustees of the R.J. Cann Discretionary Trust have agreed to use their reasonable efforts to procure that Barclayshare Nominees Limited accepts the Offer in respect of the Pledged Shares.

DETAILS OF LETTER OF INTENT

 
 Name                      Total Number of Promethean   Percentage of issued 
                            Shares in respect of         ordinary share capital 
                            which the undertaking        of Promethean 
                            has been given 
------------------------  ---------------------------  ------------------------ 
 Aberforth Partners 
  LLP (on behalf of its 
  clients)                         45,360,369                   22.32% 
------------------------  ---------------------------  ------------------------

This letter of intent comprises an intention to accept (or procure the acceptance of) the Offer.

APPENDIX 4

DEFINITIONS

The following definitions apply throughout this announcement unless the context otherwise requires:

 
 GBP, p, pence, Sterling       the lawful currency of the United Kingdom 
  or GBP                        from time to time 
 US$, $ or US dollars          the lawful currency of the United States 
                                from time to time 
 Best Assistant Education      Best Assistant Education Online Limited, 
                                a company incorporated in the Cayman Islands 
                                with limited liability, being an indirect 
                                non wholly-owned subsidiary of NetDragon 
 Board                         the board of directors of the relevant company 
 Business Day                  a day on which banks are generally open for 
                                business in the City of London (excluding 
                                Saturdays, Sundays and public holidays in 
                                the UK) 
 BVI                           the British Virgin Islands 
 Cann Trusts                   the H.A.C. 1997 Interest Possession Trust, 
                                the S.J. Cann Discretionary Trust, the C.A. 
                                Cann Discretionary Trust, the R.J. Cann Discretionary 
                                Trust, the J.R. Cann Discretionary Trust, 
                                the Bowland Charitable Trust and the Trigger 
                                Holepunch Partnership 
 CMA                           the Competition and Markets Authority, a 
                                UK statutory body established under the Enterprise 
                                and Regulatory Reform Act 2013, or any successor 
                                entity 
 Code                          the City Code on Takeovers and Mergers issued 
                                from time to time by the Panel 
 Companies Act                 the Companies Act 2006 (including the schedules 
                                thereto), as amended 
 Conditions                    the conditions to the Offer, as set out in 
                                Part 1 of Appendix 1 to this announcement 
                                and to be set out in the Offer Document 
 Confidentiality               the confidentiality agreement dated 3 October 
  Agreement                     2014 between NetDragon and Promethean 
 Co-operation Agreement        the agreement dated 10 July 2015 between 
                                NetDragon, Digital Train and Promethean and 
                                relating, among other things, to the implementation 
                                of the Offer 
 Digital Train                       Digital Train Limited, a company incorporated 
                                      in the BVI with limited liability, being 
                                      an indirect non wholly-owned subsidiary of 
  Disclosed                           NetDragon and a direct wholly-owned subsidiary 
                                      of Best Assistant Education 
                                      the information which has been fairly disclosed: 
                                      (i) by Promethean in its published annual 
                                      report and accounts for the period ended 
                                      31 December 2014 or quarterly trading update 
                                      for the period ended 31 March 2015; 
 
                                      (ii) in any public announcement to a Regulatory 
                                      Information Service made by, or on behalf 
                                      of, Promethean in accordance with the Listing 
                                      Rules or the Disclosure and Transparency 
                                      Rules prior to the Business Day before the 
                                      date of this announcement; 
 
                                      (iii) electronically or in writing by or 
                                      on behalf of Promethean to the NetDragon 
                                      Group or its professional advisers during 
                                      the course of negotiations leading up to 
                                      this announcement prior to the Business Day 
                                      before the date of this announcement; or 
 
                                      (iv) in this announcement 
 Disclosure and Transparency   the Disclosure and Transparency Rules of 
  Rules                         the Financial Conduct Authority in its capacity 
                                as the UK Listing Authority under FSMA and 
                                contained in the UK Listing Authority's publication 
                                of the same name 
 DJM                           DJM Holding Ltd., a Series A Shareholder 
                                and deemed to be acting in concert with Digital 
                                Train for the purposes of the Offer 
 Financial Conduct             the Financial Conduct Authority, or any successor 
  Authority                     entity 
 First Closing Date            the date which is 21 days after the day of 
                                posting of the Offer Document 
 Form of Acceptance            the form of acceptance for use by Promethean 
                                Shareholders in connection with the Offer 
                                which will be distributed with the Offer 
                                Document 
 FSMA                          the Financial Services and Markets Act 2000, 
                                as amended 
 Gleacher Shacklock            Gleacher Shacklock LLP, financial adviser 
                                to Promethean 
 HK Listing Rules              the Rules Governing the Listing of Securities 
                                on The Stock Exchange of Hong Kong Limited 
 HK$                           the lawful currency of Hong Kong from time 
                                to time 
 Hong Kong                     the Hong Kong Special Administrative Region 
                                of the PRC 
 Idea Gain                     Idea Gain Limited, a company incorporated 
                                in the BVI with limited liability which is 
                                owned by Cornell PTC Limited and which holds 
                                its shareholding in Best Assistant Education 
                                on trust for certain employees of the NetDragon 
                                Group 
 IFRS                          international accounting standards and international 
                                financial reporting standards and interpretations 
                                thereof, approved or published by the International 
                                Accounting Standards Board and adopted by 
                                the European Union 
 Independent Shareholders      the Promethean Shareholders other than those 
                                Promethean Directors and members of senior 
  IPO                           management of Promethean that hold Promethean 
                                Shares 
                                initial public offering 
 Listing Rules                 the Listing Rules of the Financial Conduct 
                                Authority in its capacity as the UK Listing 
                                Authority under FSMA and contained in the 
                                UK Listing Authority's publication of the 
                                same name 
 London Stock Exchange         London Stock Exchange plc, or any successor 
                                thereto 
 NED Additional Services       has the meaning given to it in paragraph 
  Payments                      15 of this announcement 
 NetDragon                     NetDragon Websoft Inc., a company incorporated 
                                in the Cayman Islands with limited liability 
                                and listed on the Main Board of The Stock 
                                Exchange of Hong Kong Limited (Hong Kong 
                                stock code: 777) 
 NetDragon BVI                 NetDragon Websoft Inc., a company incorporated 
                                in the BVI with limited liability, being 
                                a direct wholly-owned subsidiary of NetDragon 
 NetDragon Circular            the circular to be sent by NetDragon to NetDragon 
                                Shareholders summarising the background to 
                                and reasons for the Offer which will include 
                                a notice convening the NetDragon General 
                                Meeting 
 NetDragon Directors           the directors of NetDragon 
 NetDragon General             an extraordinary general meeting of holders 
  Meeting                       of NetDragon Shares to be convened following 
                                the despatch of the Offer Document for the 
                                purpose of approving the Offer 
 NetDragon Group               NetDragon and its subsidiary undertakings 
                                and associated undertakings 
 NetDragon Shareholders        the holders of NetDragon Shares from time 
                                to time 
 NetDragon Shares              ordinary shares of US$0.01 each in the share 
                                capital of NetDragon 
 October 2014 Awards           has the meaning given to it in paragraph 
                                15 of this announcement 
 Offer                         the proposed offer for Promethean by Digital 
                                Train to be made pursuant to this announcement 
                                and where the context permits any subsequent 
                                revision, variation, extension or renewal 
                                thereof 
 Offer Document                the offer document to be sent by or on behalf 
                                of Digital Train to Promethean Shareholders 
                                containing the terms and conditions of the 
                                Offer 
 Offer Period                  the offer period (as defined in the Code) 
                                relating to Promethean, which commenced on 
                                16 June 2015 
 Official List                 the official list of the Financial Conduct 
                                Authority 
 Opening Position              has the same meaning as in Rule 8 of the 
  Disclosure                    Code 
 Panel                         the Panel on Takeovers and Mergers, or any 
                                successor thereto 
 Phantom Cash Awards           the phantom awards granted pursuant to Schedule 
                                B to the PSP 
 Phase II CMA Reference        the CMA making a reference to its chair for 
                                the constitution of a group under Schedule 
                                4 to the Enterprise and Regulatory Reform 
                                Act 2013 pursuant to clause 33 of the Enterprise 
                                Act 2002, as amended, or a public interest 
                                intervention notice being issued by the United 
                                Kingdom Secretary of State for Business, 
                                Innovation and Skills under section 42(2) 
                                of the Enterprise Act 2002, as amended 
 Pledged Shares                has the meaning given to it in the section 
                                of this announcement headed "Summary of the 
                                Offer" 
 PRC                           the People's Republic of China 
 Promethean                    Promethean World plc, a company incorporated 
                                in England and Wales with registered number 
                                07118000 
 Promethean Directors          the directors of Promethean 
 Promethean Group              Promethean and its subsidiary undertakings 
                                and associated undertakings 
 Promethean Share              the share schemes operated by Promethean, 
  Schemes                       being the (i) the PSP; (ii) the Promethean 
                                Company Share Option Plan 2010 (in the case 
                                of Appendix 1, as approved by HM Revenue 
                                and Customs), as amended from time to time; 
                                and (iii) the Chalkfree Limited Unapproved 
                                Company Share Option Plan, as amended from 
                                time to time 
 Promethean Shareholders       the holders of Promethean Shares from time 
                                to time 
 Promethean Shares             the issued and to be issued ordinary shares 
                                of 10 pence each in the capital of Promethean, 
                                being 203,200,000 in issue as at 9 July 2015 
                                (being the last Business Day prior to the 
                                date of this announcement) 
 PSP                           the Promethean Performance Share Plan 2011, 
                                as amended from time to time; 
 Regulatory Information        any information service authorised from time 
  Service                       to time by the Financial Conduct Authority 
                                for the purpose of disseminating regulatory 
                                announcements 
 Relevant Authority            has the meaning given to it in paragraph 
                                (c) of Part 1 of Appendix 1 to this announcement 
 Restricted Jurisdiction       any jurisdiction where the extension or availability 
                                of the Offer would breach any applicable 
                                law or regulation or would result in a requirement 
                                to comply with any governmental or other 
                                consent or any registration, filing or other 
                                formality which Digital Train regards as 
                                unduly onerous 
 RMB                           the lawful currency of the PRC 
 Series A Preferred            the Series A preferred shares of Best Assistant 
  Shares                        Education issued pursuant to the terms of 
                                the Series A preferred share purchase agreement 
                                dated 6 January 2015 
 Series A Shareholders         the holders of the Series A Preferred Shares 
                                (other than, for the avoidance of doubt, 
                                NetDragon BVI) 
 Significant Interest          in relation to an undertaking, a direct or 
                                indirect interest of 20 per cent. or more 
                                of (i) the total voting rights conferred 
                                by the equity share capital (as defined in 
                                section 548 of the Companies Act) of such 
                                undertaking or (ii) the relevant partnership 
                                interest 
 UK or United Kingdom          the United Kingdom of Great Britain and Northern 
                                Ireland 
 US Exchange Act               the US Securities Exchange Act of 1934, as 
                                amended 
 US or United States           the United States of America, its territories 
                                and possessions, any state of the United 
                                States and the District of Columbia 
 VSA Capital                   VSA Capital Limited, financial adviser to 
                                NetDragon and Digital Train 
 Wider NetDragon               NetDragon and its subsidiaries, subsidiary 
  Group                         undertakings, associated undertakings and 
                                any other body corporate, partnership, joint 
                                venture or person in which NetDragon and 
                                all such undertakings (aggregating their 
                                interests) have a Significant Interest (other 
                                than any member of the Wider Promethean Group) 
 Wider Promethean              Promethean and its subsidiaries, subsidiary 
  Group                         undertakings, associated undertakings and 
                                any other body corporate, partnership, joint 
                                venture or person in which Promethean and 
                                all such undertakings (aggregating their 
                                interests) have a Significant Interest

For the purposes of this announcement, "subsidiary", "subsidiary undertaking", "undertaking" and "associated undertaking" have the respective meanings given thereto by the Companies Act.

All the times referred to in this announcement are London times unless otherwise stated.

Any reference to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof.

References in this announcement to the singular include the plural and vice versa.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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