ELDERS LIMITED — M&A Activity 2012

Oct 3, 2012

4 October 2012

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ASX ANNOUNCEMENT RURALCO HOLDINGS LIMITED (ASX CODE: RHL) MARKET UPDATE

In response to today’s ASX query requesting that Ruralco Holdings Limited (“Ruralco”) respond to media speculation, Ruralco confirms that on 10 September 2012 it provided a letter to Elders Limited (“Elders”) proposing that the two companies engage in discussions to explore a merger proposal. Pursuant to the merger proposal contained in that letter:

• the Automotive business of Elders and any residual forestry assets would be separated out to be held by current Elders shareholders with value realised on an orderly basis

• the rural services business of Elders would be merged with Ruralco and would be owned by both Elders and Ruralco shareholders

• a substantial equity raising would be undertaken in the merged business to restore debt to sustainable levels

• Elders hybrids (ASX: ELDPA) would agree to be redeemed at a discount to face value, but at a modest premium to recent market prices

On 17 September 2012, Elders responded that it was not the right time to consider a merger of the rural services business and it had a strong preference for deferring any discussions.

Ruralco’s perspective is that Elders capital position is not sustainable. Against this backdrop, Ruralco is of the view that the merger proposal is the best alternative available to the Elders Board to raise equity and is confident that an equity raising undertaken in the merged rural services business would be supported by major shareholders of Elders and Ruralco. Any merger proposal would be on a nil premium basis and should be priced with reference to the share price of Elders prior to the takeover speculation that followed the announcement of the acquisition by Ruralco of its initial Elders shareholding. Any merger proposal would be conditional on ACCC approval.

Ruralco notes that merger discussions between the parties can only be progressed in a co-operative and consensual manner. Ruralco is willing to engage on this basis. Any merger proposal would require the positive recommendation of the Elders Board and the approval of Elders shareholders and hybrid holders.

Ruralco is the largest shareholder in Elders and will further consider its options over the coming weeks.

Further Comment: John Maher Managing Director Ph: 0418 687 016

Ruralco Holdings Limited (ASX:RHL), is a leading Australian agribusiness. Ruralco operates through a national footprint of businesses that specialise in providing rural customers with products and services in merchandise, fertiliser, seed, wool, livestock, real estate, risk management, water, grain, finance and insurance. Ruralco's businesses around the country operate under their own brands. They have their own cultures, their own service models and their own unique value propositions - all designed to meet the demands of local or regional markets. The group’s businesses are committed to supporting the communities within which they operate.

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