Highhells.com Holdings Limited ("Highhells.com"), a listed company incorporated in Hong Kong, is the largest online retailer of footwear for women. It owns more than 20 brands and distributes stylish and moderately priced footwear to customers territory-wide. Recently, Highhells.com is preparing to arrange for an acquisition deal with Bags.com Company Limited ("Bags.com") to acquire 40% of its issued share capital (with voting rights). In fact, Bags.com is a Hong Kong incorporated listed company specialized in online selling of handbags and accessories. Highhell.com considers that the acquisition of Bags.com can facilitate synergy effect between the two companies and lead to a tremendous business opportunity. Highhell.com also believes that the proposed acquisition is in the best interest of its shareholders. Now, Highhells.com proposes to arrange its three subsidiary companies to acquire 5%, 10% and 25% of the share capital of Bags.com respectively.

Required:

1. (a)Discuss whether the proposed arrangement of acquisition by Highhells.com would trigger mandatory offer to the shareholders of Bags.com under Rule 26 of the Code on Takeovers and Mergers.(9 marks)
2. (b)If Highhells.com is required to make a general offer to the shareholders of Bags.com, explain the directors' duty of Highhell.com with respect to preparation of the profit forecast and other financial information to be provided to the offerees.(3 marks)
3. (c)On the other hand, Highhells.com also decide to repurchase its own share through the method of "off-market share buy-backs" under the Code on Share Buy-backs. Explain the relevant conditions that Highhells.com is required to fulfil in order to obtain approval from the Securities and Futures Commission.(8 marks)