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20 August 2008
The Manager
Company Announcements Office
ASX Limited
Level 4
20 Bridge Street
Sydney NSW 2000
JOINT ASX / MEDIA RELEASE
AUSDRILL REJECTS MACMAHON?S REVISED FINAL OFFER
The Board of diversified mining services company Ausdrill Limited (ASX: ASL) said today that, after consideration, it has recommended that Ausdrill shareholders REJECT Macmahon?s final1 offer. The Board said that shareholders should IGNORE all documentation from Macmahon, take no action and allow this inadequate offer to lapse.
Ausdrill Chairman Mr Terry O?Connor said that Macmahon?s final offer represented less value for Ausdrill shareholders than the initial offer when announced.
?Macmahon?s final offer of 1.65 Macmahon shares is $0.14 per share or 5% lower2 than the value of the initial offer at announcement3. This is a consequence of Macmahon?s share price falling 16.8% over this period and reflects the uncertain value of Macmahon?s shares,? Mr O?Connor said.
?Since Macmahon announced its offer 13 weeks ago, it has received acceptances for less than 1% of Ausdrill shares. The Board is pleased that Macmahon?s offer is now final so that shareholders can REJECT it and Ausdrill can continue to capitalise upon its outstanding growth opportunities in Australia and Africa for the benefit of our shareholders.
Ausdrill?s directors and other shareholders representing at least 25% of Ausdrill?s shares have again stated that they will not accept the revised and final offer. As a result, Capital Gains Tax scrip-for-scrip rollover relief will not be available and significant tax liabilities may be incurred by Ausdrill shareholders who accept the offer,? Mr O?Connor said.
Under Macmahon?s revised offer, Ausdrill shareholders would still only own 34.5% of the combined group, despite Ausdrill contributing 55%4 of the combined group?s net tangible assets and at least 43%4 of the combined earnings, before taking into account any synergies that Ausdrill may provide.
Mr O?Connor confirmed that Ausdrill was on track to report a substantial increase in its net profit after tax later this week and was in its best ever financial and operating shape and positioned to continue its strong performance for the foreseeable future.
Macmahon's announcement today states that "Macmahon intends to allow Ausdrill shareholders to retain (or receive the benefit of) the Final Dividend at least up to the amount of the Consensus Estimate". Ausdrill points out that Macmahon's ability to retain any dividends paid by Ausdrill only applies in respect of those shareholders who accept Macmahon's offer. Those who do not accept Macmahon's offer will receive the full benefit of any dividend paid by Ausdrill, without any influence from Macmahon.
Ausdrill will issue a Second Supplementary Target?s Statement shortly. This will contain further detail about why shareholders should REJECT Macmahon?s final offer, along with information regarding Ausdrill?s final results for the year ended 30 June 2008.
For further information, contact:
Mr Terry O?Connor
0416 190 942
Or
Caroline de Mori
0418 919 064
1 Subject to Macmahon?s determination in relation to the Final Dividend and in the absence of a competing proposal.
2 Based on Macmahon?s closing share price of $1.785 on 20 May 2008 and $1.485 on 19 August 2008.
3 The implied value of the initial offer at announcement on 21 May 2008 was $2.59 per Ausdrill share.
4 Based upon the Net tangible assets disclosed in the Bidders? and Target Statements.
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