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Shareholders should ‘read between the lines’

1 December

Capital Properties shareholders should ‘read between the lines’

AMP Property Portfolio said today the updated recommendation from Capital Properties’ independent directors in response to AMP Property Portfolio’s offer is surprising in light of the current level of acceptances. The updated recommendation was made in a letter addressed to shareholders today.

“We’ve had a very positive response from the majority of shareholders. We currently hold or control almost 79% of Capital Properties’ voting rights, and that total is climbing every day,” said Stephen Costley, General Manager of AMP Property Portfolio.

“The letter actually sets out good reasons for accepting the offer. In fact, we suggest that shareholders join the dots and come to their own conclusion.

“It’s interesting to see that the independent directors have taken particular care to draw shareholders’ attention to the caveats in their previous letter (3 November). The independent directors’ committee believed holding shares in Capital Properties over the medium to long term was likely to produce a higher value outcome ‘on balance’, and ‘assuming the company continued with its current policies and strategies’.

“Today they state that given the review announced by the new Board last week, there is ‘no assurance that the existing policies of the company, including dividend policies, will be continued under AMP Property Portfolio control’.”

The Capital Properties Board has indicated that the outcome of its review of Capital Properties, including future dividend policy, will be announced before the end of January 2006. “Another point the independent directors quote from their previous letter is that following their recommendation ‘may not produce the highest value outcome for all Capital Properties shareholders’.

They also repeat that if the Offer becomes unconditional at a level below the 90% required for compulsory acquisition—which it has—they believe ‘it is likely that the share price will trade at a level below the $1.48 offer price, possibly for some time into the future’. As a result, ‘acceptance of the offer may represent a higher value outcome than holding the shares and accruing dividends and capital growth over the short to medium term’,” said Mr. Costley.

“With AMP Property Portfolio now holding almost 79% of the stock, a position that controls special resolutions, it seems even more likely that the share price will fall below the Offer price when the Offer closes on 23 December.” AMP Property Portfolio extended the Offer yesterday. The Offer will now close at 11.59pm on 23 December 2005 (subject to any extension in accordance with the Takeovers Code). The Offer has become unconditional in all respects.


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