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Wadepack Board Supports Off-Market Takeover

19 November 2004

Wadepack Board Supports Off-Market Takeover Bid By CHH

Carter Holt Harvey Limited (CHH) today announced that it intends to make an off-market takeover bid to acquire the ordinary shares in Australian packaging company Wadepack Limited.

The Wadepack Board of Directors also announced its unanimous support for the bid, recommending shareholders accept the offer once standard regulatory approvals (FIRB and ACCC) are received, in the absence of a superior proposal.

CHH is offering $2.70 in cash for every ordinary fully-paid Wadepack share. CHH’s bid will permit Wadepack to declare and pay a dividend of up to A$0.10 per share during the offer period in which event the cash consideration per share will be reduced by the amount of the dividend.

This offer provides substantial value to Wadepack shareholders and represents:
• a 20.5% premium to Wadepack’s closing price of A$2.24 on 19 November 2004.
• a 22.5% premium to the 1 month value weighted average price of Wadepack shares prior to the announcement.
• a 31.7% premium to the 3 month value weighted average price of Wadepack shares prior to the announcement.

The offer of $2.70 in cash for every ordinary fully-paid Wadepack share also represents an enterprise value to EBITDA multiple of 7.9 times Wadepack’s EBITDA for the year ended 31 December 2003.

CHH will issue the complete details of its takeover bid to Wadepack shareholders in a Bidder’s Statement during December 2004. Chief Operating Officer for the CHH Pulp, Paper & Packaging businesses, Mr Rhys Jones said the company’s offer represented full and fair value for Wadepack and believed it would be attractive to its shareholders.

“Carter Holt Harvey’s bid is consistent with our strategy of investing in higher returning assets that deliver growth in our core areas – wood products, pulp, paper and packaging, supported by our forest assets,” said Mr Jones.

“This proposal will build on CHH’s acknowledged industry knowledge and strengthen our commitment to the important Australian market.”

“We see this as a natural fit for both organisations, bringing together complementary customer bases across a variety of attractive market segments. Backed by our world-class paper operations, these customers will be better served by a new leader in the Australian carton packaging market."

"For Wadepack employees, it is an opportunity to become part of a bigger, stronger Australasian packaging business,” said Mr Jones.

Wadepack Chairman, Mr Derek Bimson said “This bid from a well known and respected player in the Australasian packaging market is great news for Wadepack shareholders and customers. This offer provides to Wadepack shareholders a real opportunity to exit their investment in Wadepack at a significant premium to the recent share price. In addition, our customers will continue to experience the same high levels of service provided by a discrete CHH business unit, while also benefiting from the broader service offering and increased scale that flows from the backing of a significant Australasian packaging company.”

Tijozu Pty Ltd, a company associated with Wadepack Managing Director Mr Ashod Nassibian, and which controls 40% of the shares in Wadepack, has entered into a conditional acceptance agreement with CHH with respect to 19.9% of Wadepack shares. The key conditions of the agreement are that CHH makes a full takeover offer which subsequently becomes unconditional, and there is no superior proposal. Mr Nassibian also intends to accept CHH’s offer for the balance of the shares he controls, and the other Wadepack directors intend to accept CHH's offer for the shares they control, in the absence of a superior proposal.

CHH is also pleased to announce that Mr Nassibian has agreed to continue in the role of managing director of the Wadepack business for 12 months following successful completion of the takeover bid. The details of this arrangement will be set out in the bidder’s statement.

Carter Holt Harvey’s bid is subject to standard conditions including:
• CHH acquiring at least 90% of Wadepack’s ordinary shares, enabling it to proceed with compulsory acquisition of all outstanding Wadepack shares;
• Standard conditions relating to material adverse change, spending outside the ordinary course of business and no dividends other than those permitted; and
• The required regulatory approvals including those from the ACCC and FIRB. The full conditions of CHH’s bid are attached in annexure A.

ENDS

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