EQT HOLDINGS LIMITED — M&A Activity 2013

Jun 27, 2013

28 June 2013

The Manager Company Announcements Office ASX Limited

THE TRUST COMPANY – TAKEOVER BID BY EQUITY TRUSTEES LIMITED – SECOND SUPPLEMENTARY TARGET’S STATEMENT

We attach, by way of service pursuant to paragraph 647(3)(b) of the Corporations Act 2001 (Cwlth), a copy of the Second Supplementary Target’s Statement of the Trust Company Limited in response to the off-market takeover bid by Equity Trustees Limited.

Yours faithfully

Geoffrey Stirton Group Company Secretary and Risk Officer

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ENDS

For further information, please contact:

For media enquiries: Angus Urquhart Hintons Tel: +61 3 9600 1979 aurquhart@hintons.com.au

For shareholder enquiries: Geoffrey Stirton Group Company Secretary and Risk Officer Tel: +61 2 8295 8100 www.thetrustcompany.com.au

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The Trust Company Limited ABN 59 004 027 749

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SECOND SUPPLEMENTARY TARGET’S STATEMENT

In response to the off-market takeover offer by Equity Trustees Limited to acquire all the ordinary shares in The Trust Company Limited

This document is the second supplementary target’s statement (“ Second Supplementary Target’s Statement ”) to the target’s statement dated 19 April 2013 (“ Target’s Statement ”) issued by The Trust Company Limited ABN 59 004 027 749 (“ The Trust Company ”) and lodged with the Australian Securities and Investments Commission (“ ASIC ”) on 19 April 2013, in relation to the offer by Equity Trustees Limited (“ Equity Trustees ”) ABN 46 004 031 298 (“ Offer ”) for all of the shares in The Trust Company.

This Second Supplementary Target’s Statement supplements, and is to be read together with, the first supplementary target’s statement issued by the Trust Company on 10 May 2013 and the Target’s Statement.

Unless the context requires otherwise, defined terms in the Target’s Statement have the same meaning in this Second Supplementary Target’s Statement. This Second Supplementary Target’s Statement prevails to the extent of any inconsistency with the Target’s Statement.

A copy of this Second Supplementary Target’s Statement was lodged with ASIC on 28 June 2013. Neither ASIC nor any of its officers takes any responsibility for the contents of this Second Supplementary Target’s Statement.

Financial adviser

Legal adviser

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1 EqUiTY TRUSTEES REviSED TAkEOvER OffER

On 21 June 2013 Equity Trustees released its third supplementary bidder’s statement in relation to the Offer (“Third Supplementary Bidder’s Statement”). The Third Supplementary Bidder’s Statement details Equity Trustee’s revised offer (“Revised Offer”).

Information on The Trust Company’s proposed process to assess Equity Trustees Revised Offer is contained in the announcement attached as Annexure 1.

2 AUThORiSATiON

The copy of this Second Supplementary Target’s Statement that is to be lodged with ASIC has been approved by a resolution passed by the board of directors of The Trust Company.

Signed by Bruce Corlett AM for and on behalf of The Trust Company in accordance with section 351 of the Corporations Act.

Bruce Corlett AM Chairman

THE TRUST COMPANY – SECOND SUPPLEMENTARY TARGET’S STATEMENT 1

APPENDix 1

The Trust Company Announcement

THE TRUST COMPANY – SECOND SUPPLEMENTARY TARGET’S STATEMENT 2

Thursday, 27 June 2013

EQUITY TRUSTEES LIMITED’S REVISED TAKEOVER OFFER

On 21 June 2013, Equity Trustees Limited (“Equity Trustees”) increased its takeover offer for The Trust Company Limited (“The Trust Company”) (“Revised Takeover Offer”).

We note that the terms of the Revised Takeover Offer are consistent with the revised proposal announced by Equity Trustees on 14 May 2013, except the Revised Takeover Offer does not include the possibility of a cash alternative.

However, Equity Trustees has revised its estimate of expected cost synergies from $8m per annum to $11m per annum, with potential total synergies of $15m per annum (including revenue synergies). This increase in synergy estimate occurred without any new information on The Trust Company being provided to Equity Trustees and therefore The Trust Company would like to better understand the basis for Equity Trustees’ revised synergy estimate as this is critical in determining the potential value of the Revised Takeover Offer.

The Board of The Trust Company has not made any decision about the Revised Takeover Offer from Equity Trustees.

The Board of The Trust Company has received written advice from its external legal advisers as required by the Scheme Implementation Agreement with Perpetual Limited (“Perpetual”), and has advised Perpetual of its decision to seek further information from Equity Trustees.

Process to assess the Revised Takeover Offer

The Board of The Trust Company has engaged Ernst & Young to assist it with this synergy assessment exercise, which it expects will consist of the following process:

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• Equity Trustees management and advisers are scheduled to present to The Trust Company management and advisers early next week on how Equity Trustees calculated its original cost synergy figure of $8m per annum, the reasons for the subsequent increase in its cost synergy figure to $11m per annum and to explain the basis for the statement that total synergies of $15m per annum may be available

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• If appropriate, Ernst & Young will be provided additional information by Equity Trustees and The Trust Company to assess the potential synergies, and the risks associated with realising those synergies, in combining Equity Trustees and The Trust Company

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As a consequence of undertaking this exercise, the scheme process relating to the Perpetual offer will be delayed. However, the Board is committed to completing the synergy assessment exercise as quickly as possible.

We have also offered Perpetual the same opportunity to outline the basis for its synergy estimate.

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The Trust Company Limited ABN 59 004 027 749

Statements made by Equity Trustees

We believe it is important to comment on some of the statements made by Equity Trustees in its 21 June 2013 announcement that The Trust Company believes are inaccurate or without sound basis. These have been summarised in the table below.

Statements from 21	Comment	Comment
June 2013
announcement by
Equity Trustees
“The EQT offer		This statement cannot be substantiated as it will be
provides the prospect		dependent on the future performance of the
of materially better		respective businesses
future returns…”
“… with a lower risk		Perpetual and Equity Trustees have different risk
profile than the		profiles and business exposures, however the
Perpetual offer…”		statement that Equity Trustees has a lower risk
		profile is speculative and cannot be substantiated
		Perpetual is a larger, more diversified business that
		has exposure to equity market movements, whereas
		Equity Trustees is a smaller business focused on
		corporate and personal trustee services
“Trust Company has		Following the announcement of the original takeover
rejected our request to		offer by Equity Trustees on 21 February 2013, The
undertake due		Trust Company was approached by a number of
diligence, potentially		parties expressing interest in the company
denying their		The Trust Company undertook a process whereby it
shareholders the		provided the opportunity to undertake due diligence
opportunity of		to those interested parties, including Perpetual and
attracting a higher bid”		Equity Trustees, who tabled a bona fide indicative
		proposal which had the potential to be in the best
		interests of shareholders in The Trust Company. At
		the time, Equity Trustees indicated that it did not
		want to undertake due diligence on The Trust
		Company, as it was comfortable with the internal
		analysis it had undertaken
		Following the announcement of the recommended
		transaction with Perpetual on 7 May 2013, Equity
		Trustees sought due diligence access as part of the
		revised proposal it announced on 14 May 2013
		Pursuant to its obligations under the Scheme
		Implementation Agreement with Perpetual, The
		Trust Company could only offer due diligence
		access to Equity Trustees in certain restricted
		circumstances
		After careful consideration, and after having taken
		advice from its financial and legal advisers, The
		Trust Company Board unanimously determined that
		the Perpetual scheme was superior to the revised
		Equity Trustees proposal and therefore did not
		provideEquityTrusteeswithdue diligence access

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The Trust Company Limited ABN 59 004 027 749

“Superior value of		This analysis is based on share prices as at 20 June
EQT’s improved offer”		2013 (i.e. post announcement of the respective
analysis		offers). These share prices are likely to include
		some value for synergies to the extent that the
		market is already factoring this in following the
		respective announcements. Therefore, simply
		adding the value of synergies per share to a post-
		announcement share price results in a potential
		double-counting of synergies. This double-counting
		of synergies benefits the Equity Trustees share price
		valuation more than the Perpetual share price
		valuation, given the relative contribution of synergy
		value to the overall equity of the combined business
		In arriving at the value of the synergies, a price to
		earnings multiple of 9.0x is used for Equity Trustees
		and 12.0x for Perpetual. As this multiple is
		calculated based on share prices as at 20 June
		2013, it is likely to include some value for synergies
		(as noted above). This potentially results in further
		double-counting of synergies when determining the
		future value to shareholders in The Trust Company
		There is no accounting for implementation costs,
		which are significant under both the Equity Trustees
		offer and Perpetual scheme, but will have a larger
		impact on the per share valuation of the Equity
		Trustees offer
		There is no commentary regarding the greater
		reliance of Equity Trustees’ offer on the realisation
		of synergies compared to the Perpetual offer. This
		clarification should be made as there are likely to be
		different levels of execution risk between the two
		parties
		It should also be noted that the payment of the
		special dividend has a much greater impact on the
		capital position of the combined Equity Trustees/The
		Trust Company compared toPerpetual
“…shareholders will		This statement is speculative and cannot be
be well positioned to		substantiated
receive higher		It is difficult to make any comments on the dividends
dividends compared		that the companies may pay in the future. There are
with the competing		unknown risks, uncertainties and other important
scenario”		factors that could cause the actual dividend to be
		materially different from expected future dividends,
		including current market consensus for future
		dividends
		However, The Trust Company understands that
		Perpetual’s current intention is to maintain its current
		dividend policy, which is to pay dividends within a
		range of 80-100% of statutory NPAT, and that
		Perpetual isina strong capitalposition

The Board of The Trust Company will continue to keep you updated on developments as they occur. In the meantime, if you have any queries in relation to the Revised Takeover Offer or the Perpetual scheme, please contact The Trust

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The Trust Company Limited ABN 59 004 027 749

Company Shareholder Information Line on 1800 505 206 (within Australia) or +612 8256 3354 (outside Australia).

ENDS

For further information, please contact:

For media enquiries: Angus Urquhart Hintons Tel: +61 3 9600 1979 aurquhart@hintons.com.au

For shareholder enquiries: Geoffrey Stirton Group Company Secretary and Risk Officer Tel: +61 2 8295 8100 www.thetrustcompany.com.au

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The Trust Company Limited ABN 59 004 027 749

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1800 650 358 www.thetrustcompany.com.au

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