MACMAHON HOLDINGS LIMITED — M&A Activity 2008

Aug 26, 2008

Wednesday 27 August 2008

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ASX Announcement

UPDATE ON MACMAHON TAKEOVER OFFER FOR AUSDRILL

Macmahon Holdings Limited (“Macmahon”) today announced the following changes to its takeover offer for Ausdrill Limited (“Ausdrill”).

1) Waiver of various offer conditions

The conditions waived include:

• The condition that the S&P/ASX 300 index does not close below 5,026 for five or more trading days during the Condition Period. This condition has in fact been breached.

• The change of control condition. In waiving this condition Macmahon is relying on the summary of the change of control clauses provided by Ausdrill to the market in its ASX release dated 19 June 2008.

• Macmahon will also waive some of its rights under the Offer so that Ausdrill Shareholders will retain (or receive the benefit of) the full final dividend of 6 cents per Ausdrill share declared by Ausdrill for the 2008 financial year.

Commenting on the decision to waive the index condition, Nick Bowen, Chief Executive Officer, said Macmahon has been very aware of the difficult equity market conditions during our takeover offer for Ausdrill.

“While the S&P/ASX 300 index has dropped by more than 14 per cent during this period, the Macmahon share price has actually improved by nearly 2 per cent.

“Macmahon has been a clear equity market outperformer despite the criticism that has been levelled at Macmahon shares by Ausdrill’s Board since we first announced the takeover offer.

“We are pleased with our strong financial results and the market’s recognition of this in our share price.

“Our share price strength has also underpinned the value of Ausdrill’s shares during the market weakness.

“Based on the closing price of Macmahon shares on 26 August of $1.82 and the ratio of 1.65, our offer implies an Ausdrill price of $3.00, which is a 54 per cent premium over Ausdrill’s pre-bid price of $1.95,” Mr Bowen said.

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Macmahon Holdings Ltd ABN 93 007 634 406

Level 3 263 Adelaide Terrace Perth WA 6000 PO Box 198 Cannington WA 6987 Telephone: (08) 9365 1111 Facsimile: (08) 9365 1186 Web: www.macmahon.com.au Email: info@macmahon.com.au

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2) Acceleration of payment terms

Macmahon has also resolved to accelerate the payment terms under the takeover offer, so that accepting Ausdrill shareholders will be issued scrip consideration within 5 business days (of the later of the offer becoming unconditional and the shareholder's acceptance being processed or instructions being implemented).

This is a materially shorter period than what is required under the Corporations Act and currently contemplated under the takeover offer terms (30 days after an unconditional acceptance or within 21 days of the offer closing).

Conclusion

Summing up these changes to the offer, Mr Bowen said that Macmahon firmly believes that both sets of shareholders will benefit from a combination of the two companies.

“The waiving of certain conditions of the offer and accelerating payment terms adds further certainty around our bid and makes it even more compelling for Ausdrill shareholders to immediately accept this increased and final offer,” he said.

Macmahon has today released its Supplementary Bidder’s Statement.

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For more information, please contact:

Media contact: Investor contact:

John Phaceas Matthew Wright

Porter Novelli Mobile 0411 449 621 Investor Relations Mobile 0432 897 837

Macmahon Holdings Ltd ABN 93 007 634 406

Level 3 263 Adelaide Terrace Perth WA 6000 PO Box 198 Cannington WA 6987 Telephone: (08) 9365 1111 Facsimile: (08) 9365 1186 Web: www.macmahon.com.au Email: info@macmahon.com.au