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03-10-2007

Group Reorganisation of Henderson Land Development Company Limited's Interests in The Hong Kong & China Gas Company Limited

HONG KONG, October 3, 2007 -- Henderson Land Development Company Limited ("HLD") and Henderson Investment Limited ("HIL") jointly announced today that they have entered into an acquisition agreement pursuant to which HLD will acquire from HIL its interests in The Hong Kong & China Gas Company Limited ("HKCG") for entitlement to newly issued HLD shares in the form of a Share Entitlement Note and cash. The value of HIL's interest in HKCG is approximately HK$42,860 million based on the 10-day average closing price for HKCG shares prior to announcement.

Following completion of the transaction, HIL will remain a listed company on the Hong Kong Stock Exchange as an investment holding and infrastructure company. The remaining group's primary assets will consist of The Hangzhou Qianjiang Third Bridge in Zhejiang province and The Maanshan City Ring Road in Anhui province.

Under the terms of the transaction, HIL proposes to distribute to its shareholders on a per share basis 0.209 HLD share and HK$1.21 in cash that it receives from HLD as consideration. The proposed distributions together with the net asset value of HIL's remaining assets are valued at a total of HK$14.71 per share, representing a premium of 13.7% to the 10-day average closing price for HIL shares prior to announcement.

The HLD share consideration will be issued under a Share Entitlement Note. The Share Entitlement Note will automatically convert into HLD shares to be distributed to HIL shareholders. The distribution of the cash portion of the consideration to shareholders will be dependent on HIL shareholders passing a share premium reduction resolution and court approval. After the transaction, HLD's attributable stake in HKCG will increase from 26.54% to 39.06%. Since HLD is acquiring the HKCG shares from HIL, its 67.94% owned subsidiary, which already holds a 39.06% stake in HKCG, the transaction does not constitute a change of control under the Hong Kong Code on Takeovers and Mergers.

Commenting on the transaction, Mr. Colin Lam, Vice Chairman of HLD, said, "The transaction is an effective reorganization of HLD's interest in HKCG which results in HIL becoming a publicly listed standalone infrastructure business."

"Furthermore, the proposed transaction will unlock value for HIL shareholders through the realization of the market value for its holding in HKCG," added Mr. Lam. "We believe that due to the current corporate structure, the market value of HIL shares does not fully reflect the value of its interest in HKCG shares and infrastructure business."

"From HLD's perspective, the transaction allows the Group to streamline its holding in HKCG and simplify its overall corporate structure," commented Mr. Lam. "The restructuring will benefit HLD and HIL alike as shareholders can more easily identify and assess new and existing projects of the remaining infrastructure business."

The transaction and proposed distribution and share premium reduction is conditional on receiving shareholder approvals from HIL and other customary closing conditions.