Marbridge Daily

<- June 01, 2011 ->

Fortress to Acquire Funtalk for USD 443 Mln

Funtalk IR, 5/31/11

Chinese mobile phone distributor Funtalk (Nasdaq: FTLK) announced today that it has entered into a definitive agreement with Fortress Group Limited and Fortress Merger Sub Limited pursuant to which Fortress Group will acquire Funtalk for USD 7.20 per share.

The transaction values Funtalk's equity at approximately USD 443 mln on a fully diluted basis, and represents a 35.9% premium over Funtalk's 30 trading day average price as quoted by Nasdaq stock exchange on March 24, 2011, the last trading day prior to Funtalk's announcement on March 25, 2011 that it had received a "going private" proposal.

Fortress Group is composed of ARCH Digital Holdings, Capital Ally Investments, GM Investment, Sinowill Holding, Huge Harvest Enterprises, Kingstate Group, and Trend Focus Limited. Fortress Group currently owns, in the aggregate, 46,458,314 ordinary shares, or approximately 77.13% of the outstanding shares of Funtalk (excluding outstanding warrants and options of Funtalk).

Fortress Merger Sub is a newly formed exempted company with limited liability incorporated under the laws of the Cayman Islands and a direct wholly owned subsidiary of Fortress Group.

The transaction is expected to close before the end of the third quarter 2011.

Editor's note: For more background on this topic please see "Funtalk Receives Going Private Proposal" MD 3/28/11 Issue, "Funtalk Investors Secure Equity Funding" MD 4/13/11 issue, and "Funtalk Forms Committee To Evaluate Going Private Proposal" MD 3/30/11 issue.

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