Pen Withdraws 90% Condition in Property Fund Bid

Media release

February 16 2007

Pen Investments Withdraws 90% Condition in Property Fund Takeover Bid

The Directors of Pen Investments Ltd ("PIL") have waived their 90% condition in their takeover bid for the St John Balanced Property Fund Ltd ("St John"), a $44 million commercial property fund with over 700 investors.

Director Ross Pendergrast said that Pen Investments are now prepared to settle for a 51% controlling share of St John so that investors could be certain that its takeover offer could go ahead.

St John is the target of two takeover bids. St Laurence Property and Finance Ltd made an offer of $5460 per parcel of St John securities in December. On January 30 Pen Investments made a full takeover offer of $6060 per parcel. St Laurence holds just under 19% of the voting rights in St John and has indicated it will not sell to PIL.

Ross and Dallas Pendergrast are both founding directors of St John. Mr Pendergrast disputed a letter from financial advisers Northplan to its investors.

"We believe there is a lack of independence in this advice and we are withdrawing our condition of a 90% share so that we can offer certainty to investors," Mr Pendergrast said.

He added that having been involved in St John since its inception in 1999, the couple were totally dedicated to its welfare. "A good example of our commitment was that for the first five years of St John, until 2005, we chose not to accept any directors' fees to ensure costs were minimised and thus returns were maximised for shareholders.

"Further, no management fees were paid in the first three years of St John's life, and the management fee rate was reduced after this from 0.85% to 0.65%."

The latest report from independent adviser Grant Samuel, released this week, has assessed the value of the parcels at $6023, plus $75 of accrued interest.

Mr Pendergrast said it was disappointing that St Laurence, which had had no involvement whatsoever in the operation of St John, had now put in an offer that was 11% below Grant Samuel's independent assessment.

The Pendergrasts' offer closes on 23 March 2007.

ENDS

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