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Dirs. Recommend Shareholders Not Accept Takeover

25 August 2003

Media Release


The directors of Owens Group Limited have recommended to shareholders that they do not accept the $1.03 per share takeover offer from Mainfreight Limited.

This follows receipt of the independent appraisal of the offer by Deloitte Corporate Finance, which says the offer is not fair - a view supported by the Owens directors. Deloitte puts the full underlying value of Owens in the range of $1.09 to $1.27 per share.

A letter from the chairman of Owens Group, Norman Geary, accompanied by the Independent Adviser's Report and the Target Company Statement, will be mailed to shareholders later this week.

The Mainfreight offer, posted to shareholders on 15 August, is conditional on Mainfreight being able to increase its Owens stake from the current 15.5 per cent to 90 per cent. It is also conditional on Owens not undertaking any material transaction or altering its capital structure without the consent of Mainfreight.

Mr Geary says that if Mainfreight increases its offer, the directors will review their recommendation and advise shareholders accordingly.

He says that the Deloitte report on the merits of the Mainfreight offer contains a greater level of disclosure of Owens Group information than has previously been publicly available.

"The directors believe that this more detailed information disclosure should enable Mainfreight to increase its offer."

In agreeing with Deloitte that the current offer is not fair, the Owens directors add that shareholders should also not accept because:

· The company is aware that certain major shareholders do not intend to accept the current offer, meaning that the 90 per cent threshold will not be attained.

· Owens shareholders would be unable to share in the value of substantial cost savings and synergies that would accrue to Mainfreight through the integration of the Owens business with Mainfreight.

Mr Geary says it is the intention of the Owens Group to proceed with its growth strategies should Mainfreight not increase its offer to a level acceptable to shareholders.

"Owens is well advanced in the evaluation of a number of expansion options," says Mr Geary. "If the Mainfreight offer is not successful, Owens will actively pursue these options to strengthen and grow its core logistics business."

The Deloitte report says that its $1.09 to $1.27 share valuation range does not take into account any potential value increment that might arise from any acquisitions undertaken by Owens.

"The valuation represents the full underlying value of Owens based on its current strategic and operational initiatives, assuming 100 per cent was available to be acquired. As such, it includes a premium for control."


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