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St Laurence – Acquisition of 19.9% Rural Equities

St Laurence – Acquisition of 19.9% of Rural Equities - $1.50 per share

3 June 2004

To the Shareholders
Rural Equities Limited

Dear Shareholder

Re: St Laurence – Acquisition of 19.9% of Rural Equities - $1.50 per share

As you will be aware, St Laurence Equities Limited (“St Laurence”) recently announced its intention to make a formal takeover offer for up to 100% of Rural Equities Limited (“Rural Equities”) for $1.50 cash per share.

St Laurence is now seeking to immediately acquire up to 19.9% of the Rural Equities shares from shareholders for $1.50 per share in cash.

St Laurence has taken the step of immediately acquiring up to 19.9% to provide shareholders with greater certainty if they wish to sell their Rural Equities shares. It has also decided not to proceed with its formal takeover offer at this time to avoid confusion.

St Laurence intends to acquire shares on a first in, first accepted basis. If you offer to sell your shares, acceptances will be processed by St Laurence within three days and the sale proceeds paid to shareholders immediately thereafter. No brokerage is payable by shareholders.

Further, if St Laurence pays a higher price for Rural Equities shares at any time prior to 30 September 2004, St Laurence will increase its payment to you to reflect the higher level of consideration. This escalation right also applies to shareholders who have already offered their shares to St Laurence prior to the date of this letter.

St Laurence considers $1.50 per share to be a fair and reasonable price. This price is:

- at a significant premium over trading prices before the announcement of the H&G and St Laurence offers;
- at a significant premium to the competing H&G partial takeover offer which offers only $1.25 per share, for potentially only a portion of your shareholding; and
- above the price range assessed by Deloitte Corporate Finance for a 50.1% controlling interest in REL at $1.21 to $1.46.

Unlike the H&G offer, the St Laurence's acquisition of up to 19.9% of shares in Rural Equities is not conditional on gaining a minimum level of acceptances or shareholder approval. Further, subject to a timely response, you can expect to sell your entire shareholding for immediate cash payment, with no risk of scaling.

This is an excellent opportunity for you to immediately realise the value of your investment in Rural Equities. St Laurence believes that this opportunity also provides you with certainty and avoids any lengthy wait for receipt of cash if you wish to sell your shareholding.

We enclose with this letter the form that must be completed by shareholders to offer their shares to St Laurence along with instructions on completing the form. If you have any questions about offering your shares, please contact First NZ Capital on 0800 805 584.

Yours sincerely
St Laurence Equities Limited

Kevin Podmore

Instructions for Participating

1. Please enter the following details on the form.
a. Full names of all shareholders
b. Holder number
c. The number of shares you wish to sell
d. If you wish to receive payment by direct debit, please provide bank account details and a copy of a deposit slip, otherwise a cheque will be sent to your registered address
e. Date the offer
f. Signatures of all shareholders (and power of attorney details if relevant)

2. You should return the offer document.
a. By return fax to:
St Laurence Equities Limited
c/- Computershare Investor Services Limited
09 488 8787
b. By post to:
St Laurence Equities Limited
c/- Computershare Investor Services Limited
Private Bag 92119
Please note that offers will be accepted on a first in, first accepted basis

3. Acceptance will be confirmed by post to the shareholders registered address.

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