CITYCHAMP (00256) announced that on May 20, 2026, the seller, the buyer Peers Hardy (UK) Limited, Rotary UK, Rotary Switzerland, and the company entered into a share sale and purchase agreement. Under this agreement, the seller agreed to sell and the buyer agreed to acquire a 50% stake in the disposal company, Rotary Watch & Jewellery Limited, representing 50% of its issued share capital, for a maximum total consideration of £7 million (approximately HK$73.36 million). Immediately prior to completion, the seller held 100% of the shares in the disposal company. Following completion, the seller and the buyer will hold 50% and 50% of the disposal company's shares, respectively. Upon completion, the disposal company will cease to be a subsidiary of the company, and its financial results will no longer be consolidated into the company's financial statements. A deed of assignment was executed concurrently with the share sale and purchase agreement, pursuant to which trademarks will be transferred and assigned to the disposal company. According to the disposal company's articles of association adopted for the sale, the seller has granted the buyer a drag-along right. If an offer to acquire 100% of the disposal company's shares for a price not less than £12 million is received and not unanimously approved by both the seller and the buyer, the buyer is entitled to exercise the drag-along right, requiring the seller to transfer 25 shares in the disposal company (representing 25% of the issued share capital) to a third-party buyer for a maximum cash consideration of £3 million in accordance with the articles. The directors believe that, given the existence of a willing buyer, the sale of the disposal company's shares is in the best interests of the group. The sale presents a valuable and rare opportunity for the company to realize the value of the disposal company. The transaction will enable the group to streamline its business and optimize resource allocation. It will help the group focus its financial and management resources on its core operations, including using the net proceeds from the sale as working capital for the group, thereby enhancing shareholder value.