MACMAHON HOLDINGS LIMITED — M&A Activity 2008

Jul 9, 2008

Thursday 10 July 2008

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ASX Announcement

Macmahon Extends Takeover Offer For Ausdrill

Macmahon Holdings Limited (ASX: MAH) announced today that it has elected to extend its Takeover Offer for Ausdrill Limited (Ausdrill ) until 15 August 2008. Under the terms of the Offer, Macmahon is offering 1.45 Macmahon shares for every Ausdrill share.

Macmahon Chairman, Dick Carter, said; “Macmahon remains serious in pursuing this Offer and we believe that the Offer represents better value for Ausdrill shareholders than the stand-alone proposition put forward by the Ausdrill Board.”

Macmahon believes that the ability of Ausdrill shareholders to assess the Offer has been complicated by a number of factors, including;

• Ausdrill’s decision not to give its shareholders the benefit of an Independent Expert's report, which would give shareholders an objective, unbiased view on the Macmahon Offer.

• The failure of Ausdrill to publicly disclose the size of its order book, which is the most important leading performance indicator for a contracting company, has hampered the ability of Ausdrill shareholders to assess the growth plans that Ausdrill has chosen to release since Macmahon announced its Offer.

• The impact of the current sharemarket volatility on the rating of Ausdrill shares on a standalone basis. Since the Macmahon Offer was announced on 21 May, the S&P /ASX 300 index has declined by more than 14 per cent to 7 July 2008.

Macmahon believes that the share price of Ausdrill will fall materially in the absence of the Macmahon Offer and could drop to below $1.95 (the price at which Ausdrill had been trading before Macmahon’s Offer was announced).

It is important to note that Ausdrill Managing Director, Mr Sayers, alone has accounted for approximately 40 per cent of Ausdrill share purchases made during the period from 16 June 2008 to 3 July (being the date of Mr Sayers' last disclosed purchases). This brings into question the prospects for Ausdrill’s share price in the absence of the Macmahon Offer and share purchases by Mr Sayers.

Macmahon Chief Financial Officer, Ross Carroll, said the Takeover Offer remained a compelling proposition for Ausdrill shareholders, especially in the absence of any alternative.

“We believe that the Macmahon Offer gives Ausdrill shareholders an exceptional opportunity to be part of a bigger group, with a more sustainable growth strategy and a superior track record of delivering shareholder value,” he said.

“It is understandable that Ausdrill shareholders would have difficulty in deciding what to do given the lack of clarity from Ausdrill, particularly in regard to its future growth prospects.

“Accordingly, this extension gives the shareholders of Ausdrill appropriate time to consider our Offer and we are confident that this will allow them to see the value in accepting our proposal," Mr Carroll said.

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For further information:
Ausdrill Bid - Investor contact:	Ross Carroll	Chief Financial Officer	Mobile: 0417 096 478
Ausdrill Bid - Media contact:	John McGlue	Porter Novelli	Mobile: 0417 926 915

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