Allens Arthur Robinsor

28212

ABN 47 702 595 758

Date	15 August 2005	ABN 47 702 595 758
Page	1 of $52$ -pages (including this page)	The Chifley Tower2 Chifley Square
From	Richard Kriedemann / Andrew Wong	Sydney NSW 2000AustraliaTel 01 2 9230 4000
То	The Manager, Company Announcements Office,	Fax 61 2 9230 5333
	Australian Stock Exchange, Sydney	CorrespondenceGPO Box 50
Fax	1900 999 279	Sydney NSW 2001AustraliaDX 105 Sydney
		www.aar.com.au

Fax enguiries ring 61 2 9230 4631

Dear Sir / Madam

News Limited - Takeover Offer for realestate.com.au Limited

On behalf of News Limited, we confirm that News Limited today commenced mailing of the Bidder's Statement to realestate.com.au Limited shareholders and optionholders.

Attached are copies of each of the following documents that are in the form in which they are being sent to realestate.com.au Limited shareholders and optionholders.

Bidder's Statement dated 1 August 2005. $\mathbf{1}$
Transfer and Acceptance Form which accompanies, and forms part of, the Bidder's $\overline{2}$ . Statement.
A letter to be sent to realestate.com.au Limited optionholders. 3.

Also attached, in accordance with section 647(b)(a) of the Corporations Act, is a Supplementary Bidder's Statement dated 15 August 2005 setting out supplements to the Bidder's Statement dated 1 August 2005. The Supplementary Bidder's Statement is also being sent to REA shareholders and optionholders.

Yours faithfully

Richard Kriedemann Partner [email protected] Tel 61 2 9230 4326

fridrunk

Andrew Wong Lawyer [email protected] Tel 61 2 9230 4141

SydneyMelbourne Erisbane Parth · Port Moresby SingaporeHong Kong Jakarta Shanghai Bangkok Phnom Penh

alws S0111576156v1 205472285

This document and any following pages may contain personal information and is intanded solely for the named addressee. It is confidential and may besubject to legal or other professions privilege. Any confidentiality or p and how you can access it.

Attach

# NEWS LIMITED

BIDDER'S STATEMENT

CASH OFFER

FOR REALESTATE.COM.AU LIMITED

OFFER

News Limited

(ABN 47 007 871 178)

To acquire up to all of your ordinary shares in realestate.com.au Limited (ABN 54 068 349 066)

for

$2.00 CASH per Share

THIS IS AN IMPORTANT DOCUMENT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE IN ANY DOUBT AS TO HOW TO ACT, YOU SHOULD CONSULT YOUR FINANCIAL OR LEGAL ADVISER AS SOON AS POSSIBLE.

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News Limited

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News Limited

CORPORATE DIRECTORY

News Limited (ABN 47 007 871 178) 2 Holt Street, Surry Hills NSW 2010 Australia

Share Registry

Computershare Investor Services Pty Limited Level 5, 115 Grenfell Street, Adelaide SA 5000 Australia

Postal Address: GPO Box 1903 Adelaide SA 5001 Australia

Legal Adviser to News Limited

Allens Arthur Robinson Level 23, The Chifley Tower 2 Chilley Square, Sydney NSW 2000 Australia

Important Dates

Bidder's Statement lodged with ASIC:

Date of Offer:

1 August 2005 15 August 2005 15 September 2005, unless extended

Closing date for Offer:

*These dates may be changed as permitted by the Corporations Act.

Important Information

ASIC

A copy of this Bidder's Statement was lodged with ASIC on 1 August 2005. Neither ASIC nor any of its officers take any responsibility for the contents of this Bidder's Statement.

Privacy Collection Statement

Personal information relating to your beneficial shareholding in REA will be collected by News from REA in accordance with its rights under the Corporations Act (as those rights may be modified by ASIC for the purposes of the Offer). News will share this information with its advisors and service providers where necessary for the purposes of the Offer. News and its agents will use the information solely for purposes relating to this Offer. Generally, you have a right to access the personal information which News and their agents may hold about you.

Investment Decisions

This Bidder's Statement does not take into account your individual investment objectives, financial situation or particular needs. You may wish to seek independent financial and taxation advice before deciding whether or not to accept the Offer.

A number of defined terms are used in this Bidder's Statement. These lerms are capitalised and explained in full in Section 10. All references to time in this Bidder's Statement are to Sydney time. This Bidder's Statement is dated 1 August 2005. It includes an Offer dated 15 August 2005 in Section 3

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News Limited

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News Limited

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1.		SUMMARY OF THE OFFER	9
2.	HOW TO ACCEPT THE OFFER
3.		THE OFFER TERMS
	3.1	The Offer	1313
	3.2	Consideration	13
	3,3	Offer Period	13
	3,4	How to accept the Offer	14
	3.5	Persons to whom the Offer is made	16
	3.6	Conditions	17
	3.7	Nature of conditions	18
	3.8	Waiver of conditions	19
	3.9	Notice of status of conditions	19
	3.10	Effect of acceptance	19
	3.11	Obligations of News	22
	3.12	Variation	22
	3.13	Withdrawal	23
4.		BIDDER'S PROFILE	24
	4.1	Overview of News Corporation	24
	4.2	Website access	24
	4.3	Current arrangements between News and REA	24
5.		INFORMATION ON REA SECURITIES	25
	5.1	Disclaimer	25
	5.2	REA securities on issue	25
	5.3	REA General Options	25
	5.4	Recent REA Share Price	26
	5.5	Interests in REA securities	26
	5.6	Benefits to REA shareholders in the last 4 months	27
	5.7	Escalation agreements	27
	5.8	Date for determining holders of securities	28
	5.9	Regulatory matters and application of conditions	28
	5.10	Effect of breach of conditions	28
6.		INTENTIONS	29
	6.1	Intentions generally	29
	6.2	Compulsory acquisition	29
	6,3	REA General Options	29
	6.4	REA Employee Options	29
	6.5	Intentions for REA as a wholly owned subsidiary	30
	6,6	Intentions for REA as a partly owned subsidiary	32
	6.7	Further acquisitions of REA Shares	33
	6.8	Other intentions	33
7.		FUNDING ARRANGEMENTS	34
	7.1	Maximum cash consideration	34

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	7.2	Funding Arrangements	34
8.		AUSTRALIAN TAX CONSEQUENCES	35
	8.1	Introduction	35
	8.2.	Capital gains tax	35
	B.3	Stamp duty and the Goods and Services Tax (GST)	36
9.		ADDITIONAL INFORMATION	37
	9.1	Statements made on the basis of ASX announcements	37
	9.2	Consents to be named	37
	9.3	Approvals for payment of consideration	37
	9.4	Other material information	38
10.		DEFINED TERMS AND INTERPRETATION	39
	10.1	Defined Terms	39
	10.2	Interpretation	41
11.		APPROVAL OF THE BIDDER'S STATEMENT	42
	11.1	Approval	42.
	11.2 1	Dated	42
	11.3	Signed	42
		Annexure A - News' announcement of Offer	43
		Annexure B - REA announcements since 30 June 2004	46

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# NEWS LIMITED

15 August 2005

Dear Shareholder

I am pleased to enclose an Offer by News Limited (News) to acquire up to all of your shares in realestate.com.au Limited (REA). News currently holds a 43.69% interest in REA.

News is offering $2.00 cash for each REA share that you hold.

To accept the Offer, simply complete the enclosed Acceptance Form and return it in the envelope provided (pre-paid in Australia).

News believes that this Offer represents a fair price for REA. The Offer price of $2.00 per REA share represents a significant premium to the price of REA shares on the ASX up to 29 July 2005 (being the last trading day prior to announcement of the Offer), being

a 19% premium to the last price at which REA shares traded on the ASX of $1.68;
a 26% premium to the 1 month volume weighted average share price of $1.59; and
a 33% premium to the 3 month volume weighted average share price of $1.50.

Our Offer is a straightforward full cash offer with limited conditions, and no minimum acceptance condition. The Offer provides you with the opportunity to exit an illiquid investment at an attractive price.

The Offer is scheduled to close on 15 September 2005. Should you have questions about the Offer, please consult your financial or other professional adviser.

I encourage you to consider this document carefully and accept our Offer.

Yours sincerely

John Hartigan Chief Executive Officer $\bar{z}$

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SUMMARY OF THE OFFER 1.

This summary provides an overview of the Offer and is qualified by the detailed information contained in the rest of this document. You should read this Bidder's Statement in full before deciding how to deal with your REA Shares.

The terms of the Offer are contained in Section 3.

What is the Offer?	News Limited (News) is offering to acquire all of your ordinaryshares in realestate.com.au Limited (REA) on the terms set outin Section 3 of this Bidder's Statement.
	You may accept the Offer for all or some of the REA Sharesheld by you.
What is the OfferPrice?	News is offering $2.00 CASH for each REA Share.
When does theOffer close?	The Offer is scheduled to close at 7.00pm (Sydney time) on 15September 2005.
	News may choose to extend the Offer in accordance with theCorporations Act.
How do I accept theOffer?	To accept the Offer, you simply complete the enclosedAcceptance Form and return it in the envelope provided(pre-paid in Australia).
	Alternatively, you may follow the detailed instructions set out inSection 2.
Compulsoryacquisition	If you do not accept the Offer and News becomes entitled toacquire your REA Shares compulsorily under the CorporationsAct, News intends to proceed to compulsory acquisition. In thatcase, you will be paid later than REA Shareholders who chooseto accept the Offer.
When will I bepaid?	If you accept the Offer, you will be sent payment within 1 monthof the later of the date you accept and the date the Offerbecomes unconditional. In any event, assuming the conditionsof the Offer you accept are satisfied or waived, you will be sentpayment within 21 days of the end of the offer period for theOffer.
Do I pay brokerageor stamp duty if Iaccept?	No. You will not pay any brokerage or stamp duty if you acceptthe Offer.

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Conditions of theOffer	The Offer is subject to the conditions set out in Section 3.6. Insummary, those conditions are as follows:
	FIRB approval;
	no material adverse change in the position of REA; and٠
	no Prescribed Occurrences (as defined in Section 3.6(c))٠happening between the time the Bidder's Statement is givento REA and the end of the Offer Period.
	News may waive any of these conditions (other than the FIRBapproval condition) in accordance with the Offer.

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$2.$ HOW TO ACCEPT THE OFFER

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To accept the Offer you simply complete the enclosed Acceptance Form and return it in the envelope provided (pre-paid in Australia).

Alternatively, you may follow the instructions below. Further details are set out in Section 3.4.

How do I accept?	How you accept will depend on whether your REA Shares are held inan Issuer Sponsored Holding or a CHESS Holding. The AcceptanceForm enclosed has been personalised to reflect this for you.
	You may accept the Offer for all or some of the REA Shares held byyou.
Are my REA Sharesin an IssuerSponsored Holding	Your REA Shares are held in an Issuer Sponsored Holding if anystatement you received from REA detailing the number of REA Sharesyou hold showed that your holder number started with an "I".
or a CHESS Holding?	On the other hand, your REA Shares are held in a CHESS Holding ifthe statement you received from REA detailing the number of REAShares you hold showed that your holder number started with an "X"
Issuer SponsoredHolding	If your REA Shares are held in an Issuer Sponsored Holding,complete the relevant sections of the enclosed Acceptance Form, signin the space provided and:
	post it in the enclosed envelope (pre-paid in Australia);0R
	post it to:
	realestate.com.au Limited Takeoverc/- Computershare Investor Services Pty LimitedReply Paid 1326Adelaide SA 5001
	The postage is pre-paid within Australia;
	0R.deliver the Acceptance Form to:
	Computershare Investor Services Pty LimitedLevel 5, 115 Grenfell StreetAdelaide SA 5000

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CHESS Holding	If your REA Shares are held in a CHESS Holding, you should instruct
	your Controlling Participant (ie. Broker) to accept on your behalf.
	Alternatively, if you do not wish to contact your Controlling Participant
	(ie. your Broker), complete the relevant sections of the Acceptance
	Form, sign in the space provided and post it in the enclosed envelope
	or deliver to Computershare Investor Services Pty Limited at the
	addresses set out above. The postage is pre-paid within Australia.
	This will authorise News, on your behalf, to inform your Controlling
	Participant (ie. your Broker) of your instructions to accept the Offer,

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3. THE OFFER TERMS

$3.1$ The Offer

News offers to acquire all of your REA Shares on the terms and subject to the $(a)$ conditions set out in this Offer. You may accept this Offer for all or some of your REA Shares. If you accept this Offer for some of your REA Shares, you may still accept the Offer for the balance of your REA Shares at any time during the Offer Period.
If you accept this Offer, News will be entitied to all Rights (being those accruing $(b)$ after the date this document is lodged with ASIC) in respect of your REA Shares which it acquires under this Offer, as well as your REA Shares themselves. If any Rights are received by you and such documents as may be necessary to vest title to those Rights in News or the benefit of those Rights are not passed on to News, News may reduce the consideration payable to you under this Offer by the value, as reasonably assessed by News, of those Rights (see Section 3.10(h)).
$(c)$ This Offer extends to:
- REA Shares which are issued during the period from the Register Date to $(i)$ the end of the Offer Period as a result of the conversion or exercise of rights attached to other securities convertible into REA Shares (including REA Options); and
- any person who becomes registered or entitled to be registered as the $(ii)$ holder of any of your REA Shares during the Offer Period (see Section 3.5(b)).
$(d)$ This Offer is dated 15 August 2005.

$3.2$ Consideration

The consideration offered for each of your REA Shares to which this Offer relates is $2.00 in cash.

$3.3$ Offer Period

$(a)$ This Offer commences on the date the first of the Offers is made, which will be 15 August 2005, and remains open for acceptance until 7.00pm (Sydney time) on 15 September 2005, unless it is withdrawn or extended.
News may, in accordance with the Corporations Act, extend the period during $(b)$ which this Offer remains open for acceptance.

$3.4$ How to accept the Offer

The method by which you can accept the Offer will depend on whether your REA Shares are in an Issuer Sponsored Holding or a CHESS Holding.

Your REA Shares are in an Issuer Sponsored Holding if they are held on REA's register of shareholders in Australia and sponsored directly by REA as issuer.

Your REA Shares are in a CHESS Holding if they are held on REA's register of shareholders in Australia and sponsored by a Broker or other CHESS Participant or if you are a Controlling Participant.

$(a)$ Issuer Sponsored Holdings

If any of your REA Shares are held in an Issuer Sponsored Holding, to accept this Offer you must complete, sign and send the accompanying Acceptance Form in accordance with the instructions on it together with all other documents required by those instructions so that they are received before the expiry of the Offer Period. You may send the completed Acceptance Form (together with any documents required by the instructions on that form) in the envelope provided (pre-paid in Australia). You may alternatively send the Acceptance Form and any associated documents to:

realestate.com.au Limited Takeover C/- Computershare Investor Services Pty Ltd Reply Paid 1326 Adelaide SA 5001

The postage is pre-paid within Australia.

Alternatively, you may deliver the Acceptance Form and any associated documents to:

Computershare Investor Services Pty Limited Level 5, 115 Grenfell Street Adelaide SA 5000

The transmission of the Acceptance Form and other documents is at your own risk. No acknowledgement of receipt of documents will be given.

$(b)$ CHESS Holdings

If your REA Shares are in a CHESS Holding, to accept this Offer you must comply with the ASTC Settlement Rules. To accept this Offer in accordance with the ASTC Settlement Rules:

you should instruct your Controlling Participant (ie. your Broker) such that $(i)$ the Controlling Participant initiates acceptance of this Offer in accordance with Rule 14.14 of the ASTC Settlement Rules before the expiry of the Offer Period; or
if you are a Controlling Participant (ie. your Broker), acceptance of this $(i)$ Offer must be initiated in accordance with Rule 14.14 of the ASTC Settlement Rules before the expiry of the Offer Period.

Alternatively, you may complete, sign and send the Acceptance Form in respect of those REA Shares which are in the CHESS Holding in accordance with the instructions on it, together with all other documents required by those instructions. This will authorise News to inform your Controlling Participant (ie. your Broker) of your instructions to accept this Offer on your behalf. You must ensure that the Acceptance Form is received by News in time for News to inform your Controlling Participant of your instructions, and your Controlling Participant to carry out those instructions, before the expiry of the Offer Period. You will be taken to have completed acceptance of this Offer when your Controlling Participant initiates acceptance of this Offer in accordance with Rule 14.14 of the ASTC Settlement Rules.

If you choose to complete the Acceptance Form, then the transmission of the Acceptance Form and other documents is at your own risk. No acknowledgement of receipt of documents will be given. Please note that any documents that are faxed to Computershare will only be accepted if and when the original completed documents have been received by Computershare, in each case within the periods specified in or required by this Offer.

$(c)$ Nominee holdings

If your REA Shares are registered in the name of a Broker, investment dealer, bank, trust company or other nominee, you should contact that nominee for assistance in accepting this Offer.

$(d)$ Status of Acceptance Form

The Acceptance Form forms part of this Offer.

The requirements on the Acceptance Form must be observed in accepting this Offer in respect of any REA Shares held in an Issuer Sponsored Holding. Acceptance of this Offer for REA Shares held in an Issuer Sponsored Holding will be effective only when (subject to paragraph (e) below), the properly completed Acceptance Form (together with any document required by the instructions on that form) has been received not later than the end of the Offer Period.

$(e)$ News' discretion

Notwithstanding paragraphs (a) to (d) above, News may at its discretion treat any Acceptance Form received before the end of the Offer Period (at one of the addresses specified in paragraph (a) or such other address as may be acceptable to News) as valid or waive any requirement of paragraph (a) to (d) in any case, but the payment of the consideration in accordance with this Offer will not be made until any irregularity has been resolved or waived and any other documents required to procure registration of the transfer of your REA Shares to News have been received by News.

$3.5$ Persons to whom the Offer is made

An Offer in this form and bearing the same date is being made to and will be sent $(a)$ to each holder of REA Shares so registered as at the close of business (Sydney time) on the Register Date.
If at the time this Offer is made to you, or at any time during the Offer Period, $(b)$ another person is, or is entitled to be, registered as the holder of some or all of your REA Shares to which this Offer relates then:
- a corresponding Offer is deemed to have been made to that other person $\langle 0 \rangle$ in respect of those REA Shares:
- $(ii)$ a corresponding Offer is deemed to have been made to you in respect of any other REA Shares to which this Offer relates; and
- this Offer is deemed to have been withdrawn immediately after that time. $(iii)$
$\left($ c $\right)$ If at any time during the Offer Period your REA Shares consist of two or more distinct portions (for example, where you hold REA Shares as nominee for separate beneficial owners), this Offer is deemed to consist of separate corresponding Offers made to you for the respective distinct portions of your REA Shares. You may accept two or more such deemed separate corresponding Offers at the same time as if they were a single Offer for each distinct portion of REA Shares. An acceptance by you of one of the Offers which is deemed to exist in respect of a distinct portion of REA Shares is ineffective unless you have given to News a notice which:
- if it relates to REA Shares in a CHESS Holding, must be in an electronic $(i)$ form approved by the ASTC Settlement Rules; or
- if it relates to REA Shares in an Issuer Sponsored Holding, must be in $(ii)$ writing,

stating that the relevant REA Shares consist of a distinct portion and your acceptance specifies the number of REA Shares in the distinct portion to which the acceptance relates. If this applies to you, please write to Computershare Investor Services at GPO Box 1903, Adelaide, South Australia, 5001 for such additional copies of this Bidder's Statement and Acceptance Form as are necessary.

$3.6$ Conditions

Subject to this Section 3.6, this Offer and any contract that results from your acceptance of this Offer is subject to the following conditions.

$(a)$ FIRB approval

One of the following occurs before the end of the Offer Period:

$(i)$ News receives a notice from the Treasurer of the Commonwealth of Australia (the Treasurer) or his agent to the effect that there is no objection to the acquisition of REA Shares by News (by any means permitted by the Corporations Act) under the Commonwealth Government's foreign investment policy, such notice being unconditional;
the period provided under the Foreign Takeovers Act during which the $(ii)$ Treasurer may make an order under section 18 or an interim order under section 22 of the Foreign Takeovers Act prohibiting the acquisition of REA Shares by News (by any means permitted by the Corporations Act) has elapsed, without such an order being made; or
if an interim order prohibiting such acquisition is made, the subsequent $(iii)$ period for making a final order prohibiting the acquisition of REA Shares by News has elapsed, without such final order being made.

$(b)$ No material adverse change

Save as publicly announced to ASX prior to the Announcement Date, none of the following events has happened since 30 June 2004, and none of the following events happens or is disclosed between the Announcement Date and the end of the Offer Period, other than as a result of the actions of News in relation to any of the arrangements described in Section 4.3:

any change in the business, assets, liabilities, financial or trading position, $\left($ i profitability or prospects, the status or terms of arrangements entered into with REA or any of its subsidiaries or the status or terms of any Approvals which are applicable to REA or any of its subsidiaries which has a material adverse effect on REA; or
any event, action, proceeding, circumstance or change in circumstance $(ii)$ which is reasonably likely to result in a material adverse effect of the kind mentioned in paragraph (i) above.

Prescribed Occurrences $(c)$

Between the time the Bidder's Statement is given to REA and the end of the Offer Period, none of the following occurrences (Prescribed Occurrences) happens (other than the issue of REA Shares as a result of exercise of REA Options):

$(i)$ REA converts all or any of its shares into a larger or smaller number of shares:
$(ii)$ REA or a subsidiary of REA resolves to reduce its share capital in any way;
$(iii)$ REA or a subsidiary of REA enters into a buy-back agreement or resolves to approve the terms of a buy-back agreement under section 257C(1) or 257D(1) of the Corporations Act;
$(iv)$ REA or a subsidiary of REA issues shares or grants an option over its shares, or agrees to make such an issue or grant such an option;
REA or a subsidiary of REA issues, or agrees to issue, convertible notes; $(v)$
REA or a subsidiary of REA disposes, or agrees to dispose, of the whole, $(vi)$ or a substantial part, of its business or property;
REA or a subsidiary of REA charges, or agrees to charge, the whole, or a $(vii)$ substantial part, of its business or property;
$(Viii)$ REA or a subsidiary of REA resolves to be wound up;
$(i \times)$ a liquidator or provisional liquidator of REA or of a subsidiary of REA is appointed;
$(x)$ a court makes an order for the winding up of REA or of a subsidiary of REA:
$(xi)$ an administrator of REA or of a subsidiary of REA is appointed under section 436A, 436B or 436C of the Corporations Act;
REA or a subsidiary of REA executes a deed of company arrangement; or (xii)
$(xiii)$ a receiver, or a receiver and manager, is appointed in relation to the whole, or a substantial part, of the property of REA or of a subsidiary of REA.

$3.7$ Nature of conditions

Each of the conditions in Section 3.6 to which this Offer (other than the condition in (a) Section 3.6(a)) is subject to a condition subsequent will not prevent a contract to sell your REA Shares resulting from acceptance of this Offer, but any breach or non-fulfilment of it will entitle News, by notice in writing to you, to rescind a contract that results from your acceptance of this Offer as if that contract had not been formed.
The condition in Section 3.6(a) is a condition precedent and, as a result, no $(b)$ contract resulting from acceptance of this Offer will come into effect until that condition is fulfilled.
Each of the conditions in each paragraph and each sub-paragraph of Section 3.6 $\left( c \right)$ which apply to this Offer will constitute and be construed as a separate, several and distinct condition. No condition which applies to this Offer will be taken to limit the meaning or effect of any other condition.
News alone will be entitled to the benefit of the conditions which apply to this Offer $(d)$ and any breach or non-fulfilment of such condition may be relied on only by News. News may at any time and from time to time waive (generally, or in respect of a particular event) the breach or non-fulfilment of any such condition, other than the condition in Section 3.6(a) unless the breach of that condition results from the inclusion of conditions in the notice referred to in paragraph (i) of Section 3.6(a).
$(e)$ News will use all reasonable endeavours to ensure that the condition in Section 3.6(a) is satisfied as soon as possible after the date of this Bidder's Statement.

$3.8$ Waiver of conditions

Subject to the Corporations Act, News may free the Offer and any contract $(a)$ resulting from acceptance of the Offer from all or any of the conditions in Section 3.6 (other than the condition in Section 3.6(a)) generally or in relation to a specific occurrence by giving notice in writing to REA and to ASX in accordance with section 650F of the Corporations Act. Any such notice may be given:
- in the case of the conditions in Section 3.6(c) not later than 3 business $(i)$ days after the end of the Offer Period; and
- $(ii)$ in the case of the conditions in Section 3.6(b) - not less than 7 days before the end of the Offer Period.
If, at the end of the Offer Period, the conditions in Section 3.6 have not been $(b)$ fulfilled and News has not declared the Offer (or the Offer has not become) free from those conditions, all contracts resulting from the acceptance of the Offer and all acceptances that have not resulted in binding contracts will be automatically void.

3.9 Notice of status of conditions

The date for giving the notice as to the status of the conditions in Section 3.6 required by section 630(1) of the Corporations Act is 7 September 2005 (subject to variation in accordance with section 630(2) of the Corporations Act if the Offer Period is extended).

$3.10$ Effect of acceptance

By accepting this Offer in accordance with Section 3.4, you will have:

accepted this Offer in respect of your REA Shares to which this Offer relates and $(a)$ which are designated as accepted in the Acceptance Form or in instructions received from your Controlling Participant (the Accepted Shares) and agreed to the terms and conditions of this Offer to sell those Accepted Shares to News. You will be deemed to have accepted the Offer for all of your REA Shares if you do not specify a lesser number on the Acceptance Form or in instructions received from your Controlling Participant;

subject to the Offer being declared free from the conditions set out in Section 3.6 or $(b)$ those conditions being fulfilled, assigned all of your beneficial interest in the Accepted Shares to News, conveyed beneficial title to the Accepted Shares to News and agreed to transfer legal title to the Accepted Shares to News, and agreed that News will be immediately entitled to cause the transfer of the Accepted Shares to be registered;
$\mathbf{(c)}$ authorised News (by its directors, servants or agents) to complete the Acceptance Form by inserting such details as are omitted in respect of the Accepted Shares and to rectify any errors in or omissions from the Acceptance Form (including altering the number of REA Shares stated to be held by you if it is otherwise than as set out in the Acceptance Form and making any consequential change to the number of REA Shares to be designated as Accepted Shares) as may be necessary to make the Acceptance Form an effective acceptance of this Offer or to enable registration of the transfer of all of the Accepted Shares to News;
represented and warranted to News that the Accepted Shares will, at the date of $(d)$ the transfer of them to News, be fully paid and free from all mortgages, charges, liens, encumbrances and interests of third parties of any kind, whether legal or otherwise, and restrictions on transfer of any kind, and that you have full power and capacity to accept this Offer and to sell and transfer the legal and beneficial ownership of the Accepted Shares to News;
$(e)$ represented and warranted to News that, if you are the legal owner but not the beneficial owner of the Accepted Shares:
- $(i)$ the beneficial holder has not sent a separate acceptance of the Offer in respect of the Accepted Shares:
- the number of REA Shares you have specified as being the entire holding $(i)$ of REA Shares you hold on behalf of the particular beneficial holder is in fact such entire holding; and
- $(iii)$ that you are irrevocably and unconditionally entitled to transfer the Accepted Shares, and to assign all of the beneficial interest therein to News:
(f) . appointed News and each of its directors, secretaries and officers severally as your true and lawful attorney, with effect from the date that this Offer, or any contract resulting from acceptance of this Offer, becomes free from its conditions or such conditions are satisfied or waived, with power to do all things which you could lawfully do concerning the Accepted Shares or in exercise of any right derived from the holding of the Accepted Shares, including (without limiting the generality of the foregoing);
- $(i)$ attending and voting at any meeting of REA:
- $(ii)$ demanding a poll for any vote to be taken at any meeting of REA;
- proposing or seconding any resolution to be considered at any meeting of $(iii)$ REA:
- $(iv)$ requisitioning the convening of any meeting of REA and convening a meeting pursuant to any such requisition;
$(v)$ notifying REA that your address in the records of REA for all purposes, including the despatch of notices of meeting, annual reports and dividends, should be altered to an address nominated by News; and
$(vi)$ doing all things incidental or ancillary to any of the foregoing,

and to have agreed that in exercising the powers conferred by that power of attorney, the attorney may act in the interests of News as the intended registered holder and beneficial holder of the Accepted Shares.

This appointment, being given for valuable consideration to secure the interest acquired in your REA Shares, is irrevocable, and terminates upon registration of a transfer to News of the Accepted Shares.

News will indemnify you and keep you indemnified in respect of all costs, expenses and obligations which might otherwise be incurred or undertaken as a result of the exercise by an attorney of any powers under this paragraph;

irrevocably authorised and directed REA to pay News or to account to News for all $(g)$ Rights in respect of the Accepted Shares subject, however, to any such Rights received by News being accounted for by News to you if this Offer is withdrawn or the contract formed by your acceptance of this Offer is rescinded or rendered void;
except where Rights have been paid or accounted for under paragraph (g), $(h)$ irrevocably authorised News to deduct from the consideration payable in accordance with the terms of this Offer the amount of all Rights referred to in paragraph (g) or any amount equal to the value of those Rights as reasonably assessed by News (or, if there is a dispute, the Chairman of ASX or his nominee); and
if you signed the Acceptance Form in respect of Accepted Shares in a CHESS $(i)$ Holding, irrevocably authorised News:
- $(i)$ to inform your CHESS Controlling Participant of your instructions for it to initiate acceptance of the Offer on your behalf in respect of all such Accepted Shares in accordance with the ASTC Settlement Rules; and
- to give any other instructions concerning those Accepted Shares to your $(ii)$ CHESS Controlling Participant on your behalf under the sponsorship agreement between you and the CHESS Controlling Participant.
$\left( j\right)$ agreed that, if Section 3.10(c) applies to you, you will provide News at your cost with all information and assistance required in order for News to apply for requisite authorities or clearances from the Reserve Bank of Australia or the Australian Taxation Office: and
agreed that the contract formed by acceptance of this Offer will be governed by the $(k)$ laws of New South Wales and agreed to submit to the non-exclusive jurisdiction of courts exercising jurisdiction there.

$3.11$ Obligations of News

$(a)$ If you accept this Offer and the conditions of the Offer and of the contract resulting from the acceptance of the Offer are satisfied or are waived, then News will arrange for a cheque to be drawn in Australian currency in your favour for the arnount of cash payable to you in accordance with this Offer and send the cheque to you at the address shown in the Acceptance Form by the end of whichever of the following periods ends earlier:
- $(i)$ 1 month after the date this Offer is validly accepted by you under Section 3.4 or, if at the time of your acceptance this Offer is subject to a defeating condition in Section 3.6, within 1 month after the contract formed by your acceptance of this Offer becomes unconditional; or
- $(ii)$ 21 days after the end of the Offer Period.
$(b)$ All costs and expenses of the preparation of this Bidder's Statement and of the preparation and circulation of the Offer, and any stamp duty payable on transfers of Accepted Shares, will be paid by News.
$(c)$ If, at the time of acceptance of this Offer, any authority or clearance of the Reserve Bank of Australia or of the Australian Taxation Office is required for you to receive any consideration under this Offer or you are a resident in or a resident of a place to which, or you are a person to whom:
- $(i)$ the Banking (Foreign Exchange) Regulations 1959 (Cth);
- $(ii)$ the Charter of the United Nations (Terrorism and Dealing with Assets) Regulations 2002 (Cth);
- $(iii)$ the Charter of the United Nations (Sanctions - Afghanistan) Regulations 2001 (Cth),
- the Iraq (Reconstruction and Repeal of Sanctions) Regulations 2003 (Cth); $(iv)$ OF
- $(v)$ any other law of Australia that would make it unlawful for News to provide consideration for your REA Shares,

applies then acceptance of this Offer will not create or transfer to you any right (contractual) or contingent unless and until the requisite authorities or clearances are in place. See Section 9.3 for information as to whether this restriction applies to you.

$3.12$ Variation

News may vary this Offer as permitted by Part 6.6 Division 2 of the Corporations Act.

$3.13$ Withdrawal

This Offer may be withdrawn with the consent in writing of ASIC, which consent $(a)$ may be given subject to such conditions (if any) as are specified in the consent. If so, News will give notice of the withdrawal to ASX and to REA and will comply with any other conditions imposed by ASIC.
If News withdraws this Offer, all contracts arising from its acceptance will $(b)$ automatically be void.

$\mathbf{4}$ BIDDER'S PROFILE

4.1 Overview of News Corporation

News is a wholly-owned subsidiary of News Corporation, a company incorporated in the US State of Delaware. News is the principal operating subsidiary of News Corporation in Australia.

News Corporation (NYSE: NWS, NWS.A; ASX: NWS, NWSLV) had total assets as of 31 March 2005 of approximately US$56 billion and total annual revenues of approximately US$23 billion. News Corporation is a diversified international media and entertainment company with operations in eight industry segments: filmed entertainment; television; cable network programming; direct broadcast satellite television; magazines and inserts; newspapers; book publishing; and other. The activities of News Corporation are conducted principally in the United States, Continental Europe, the United Kingdom, Australia, Asia and the Pacific Basin.

$4.2$ Website access

Further information in relation to News Corporation can be found at www.newscorp.com.

$4,3$ Current arrangements between News and REA

Members of the News Group and the REA Group provide each other with services relating to branding and advertising for the benefit of both groups. Those arrangements are revised from time to time as particular agreements relating to the services expire, and News expects that practice will continue in the ordinary course. Set out below is a summary of the current arrangements between the two groups.

$(a)$ News provides branding services to Netwide Solutions Pty Ltd (NSPL) (an REA subsidiary) under which News displays the realestate.com.au brand in the header of editorial pages in the real estate section of selected community newspapers published by the News Group (Selected Publications), which change from time to time. In return, NSPL displays the branding of the Selected Publications in all search results pages on the realestate.com.au website where searches are conducted on properties for sale or rent in the suburbs covered by the Selected Publications. The branding of the Selected Publications is exclusive in search results pages on the realestate.com.au website where searches are conducted on properties for sale or rent in suburbs where there is a News community newspaper.
NSPL purchases advertising in the Selected Publications and in certain $(b)$ metropolitan newspapers on the basis of a minimum spending obligation and rates which are discounted from the relevant rate cards for spending above the agreed minimum.
$(c)$ News Interactive Pty Limited (a News subsidiary) and NSPL exchange online advertising and branding services on the NI network of websites, and realestate.com.au websites.

INFORMATION ON REA SECURITIES 5.

$5.1$ Disclaimer

The following information on REA securities has been prepared by News using publicly available information, and has not been independently verified. Accordingly, News does not, subject to the Corporations Act, make any representation or warranty, express or implied, as to the accuracy or completeness of such information. In particular, the details in Section 5.2 are based on publicly available information which may not be complete.

Further information relating to the securities of REA may be included in the Target's Statement.

$5.2$ REA securities on issue

According to documents lodged by REA with ASX, the total number of securities in each class of REA securities on issue as at the date of this Bidder's Statement is as follows.

29 S
REA Shares	107,374,365
REA General Options	10,000,000
REA Employee Options	1,542,000

REA Shares are quoted on ASX.

REA General Options and REA Employee Options are not quoted on ASX. The Offer extends to any Shares that are issued on the exercise of REA Options during the period from the Register Date until the end of the Offer Period.

5.3 REA General Options

REA General Options to subscribe for ordinary shares of REA were issued to News on 8 February 2001 as part of News' agreement with REA to invest $10.75 million in cash and kind in return for a 44.2 per cent stake in REA. The exercise price is $0.20 per option. The options may be exercised in whole or in part at any time until the expiry date of 8 February 2006. The REA General Options represent 8,4% of REA's share capital on a fully diluted basis.

The option terms also give the optionholder rights regarding the following matters.

$(a)$ Reorganisation of Capital and Adjustments

In the event of any reorganisation of capital (including any consolidation, subdivision, return or reduction of capital), the number of options or the exercise price will be adjusted in the manner specified in ASX Listing Rule 7.22 as amended from time to time.

If there is a pro rata issue (other than a bonus issue) to holders of ordinary shares, the exercise price will be adjusted in the manner specified in ASX Listing Rule 6.22 as amended from time to time.

If there is a bonus issue to holders of ordinary shares, the number of ordinary shares over which the options are exercisable will be increased by the number of ordinary shares and/or other securities that the optionholder would have received if the options had been exercised before the date of entitlement for the bonus issue.

$(b)$ New Issues

The optionholder may participate in any new issues to the holders of the underlying securities at the same time and price as the holders of the underlying securities without exercising the option.

$(c)$ Listing of Options

Upon the options being exercised, REA must apply to the ASX for the quotation of the shares issued as a result.

$(d)$ Transfer

The options may be transferred by the optionholder with the approval of REA, such approval not to be unreasonably withheld.

$(\circ)$ Ranking of Shares

REA Shares issued on exercise of the options will rank equally in all respects with the ordinary shares on issue as at the date of exercise.

$5,4$ Recent REA Share Price

The last recorded sale price of REA Shares on ASX before 1 August 2005, being the Announcement Date, was $1.68 as at the close of trading on the ASX.

5.5 Interests in REA securities

Relevant interest in REA Shares and voting power in REA Shares as at the $(a)$ date of the Bidder's Statement

As at the date of this Bidder's Statement, News had:

a relevant interest in 46,915,811 REA Shares, representing 43.69% of the $(i)$ total number of REA Shares (and voting power in REA of 43.69%);
a relevant interest in 10,000,000 REA General Options which confer no (ii) voting power; and
no relevant interest in any REA Employee Options. (iii)

$(b)$ Relevant interest in REA Shares and voting power in REA as at the date of the Offer

As at the date immediately before the first Offer was sent, News had

a relevant interest in 46,915,811 REA Shares, representing 43.69% of the $(i)$ total number of REA Shares (and voting power in REA of 43.69%);
$(i)$ a relevant interest in 10,000,000 REA General Options which confer no voting power; and
$(iii)$ no relevant interest in any REA Employee Options.

$(c)$ Acquisitions of REA Shares

$(i)$ In the 4 months before the date of this Bidder's Statement, neither News nor any of its associates provided (or agreed to provide) or received (or agreed to receive) consideration for an REA Share under a purchase or agreement to purchase or a sale or agreement to sell, other than the purchase by News of 3,221,230 REA Shares from ninemsn Pty Limited (ABN 33 077 753 461) at $2.00 per REA Share on 1 August 2005.
$(ii)$ In the period between the date of this Bidder's Statement and the Offer. neither News nor any of its associates has provided (or agreed to provide) or has received (or agreed to receive) consideration for an REA Share under a purchase or agreement to purchase or a sale or agreement to sell.

5.6 Benefits to REA shareholders in the last 4 months

$(a)$ In the 4 months before the date of this Bidder's Statement, neither News nor any of its associates gave, offered to give or agreed to give a benefit to another person which was likely to induce the other person or an associate to:
- $(i)$ accept an offer under the Offer; or
- $(i)$ dispose of securities in the bid class,

which benefit was not offered to all holders of securities in the bid class for the Offer.

$(b)$ In the period between the date of this Bidder's Statement and the date of the Offer, neither News nor any of its associates gave, offered to give or agreed to give a benefit to another person which was likely to induce the other person or an associate to:
- $(i)$ accept an offer under the Offer; or
- $(ii)$ dispose of securities in the bid class,

which benefit was not offered to all holders of securities in the bid class for the Offer.

57 Escalation agreements

Neither News nor any of its associates has entered into any escalation agreement that is prohibited by section 622 of the Corporations Act.

5.8 Date for determining holders of securities

For the purposes of section 633 of the Corporations Act, the date for determining the people to whom information is to be sent under items 6 and 12 of section 633(1) is the Register Date.

5.9 Regulatory matters and application of conditions -

As at the date of this Bidder's Statement, News is not aware of any matter which would constitute a breach of the conditions in Section 3.6.

News has filed the necessary application with the Foreign Investment Review Board for the approval referred to in Section 3.6(a). News does not believe that the acquisition of REA Shares, either under the Offer or as a result of the exercise of REA Options, will be contrary to the national interest for the purposes of the Foreign Takeovers Act.

$5.10$ Effect of breach of conditions

You should note that if there is a breach of any of the conditions of the Offer and News decides to rely on that breach, then the contract formed by acceptance of the Offer will become void at the end of the Offer Period. Your REA Shares will be returned to you at that time.

6. INTENTIONS

$6.1$ Intentions generally

This section sets out News' present intentions on the basis of facts and information concerning REA and the general business environment which are known to it at the time of preparation of the Bidder's Statement.

Final decisions regarding matters covered by News' current intentions will only be made once News undertakes a detailed review of REA's operations and activities to evaluate their long-term profitability and prospects. Accordingly, the statements set out in this Section 6 are statements of present intention only which may change as new information becomes available or circumstances change.

6.2 Compulsory acquisition

If News becomes entitled to acquire REA Shares compulsorily under Part 6A.1 of the Corporations Act, it intends to exercise those rights. You should be aware that, if News acquires sufficient shares under the Offer (or otherwise as permitted by the Corporations Act) and then exercises the REA General Options during the Offer Period, the effect may be to take News' aggregate relevant interest to 90% or more of REA Shares. In that situation, News could then exercise compulsory acquisition rights regarding the balance of REA Shares.

If News does not become entitled to exercise compulsory acquisition rights in respect of REA Shares under Part 6A.1 of the Corporations Act, it may nevertheless subsequently become entitled to exercise general compulsory acquisition rights under Part 6A.2 of the Corporations Act, including as a result of acquisitions described in Section 6.6. News intends to exercise such rights if they become available.

$6,3$ REA General Options

News intends to exercise the REA General Options prior to their expiry on 8 February 2006. News intends to make a decision as to when it will exercise the REA General Options once the outcome of the Offer is clear.

$6.4$ REA Employee Options

News may make a separate offer to acquire (or procure the cancellation of) any or all REA Employee Options, but it has not made a decision on the matter and does not intend to do so until it is clear whether or not News will achieve compulsory acquisition rights in respect of REA Shares. If News acquires 100% of REA Shares, then it will become entitled to exercise compulsory acquisition rights in respect of REA Employee Options under Part 6A.2 of the Corporations Act. News is likely to exercise its rights in those circumstances.

$6.5$ Intentions for REA as a wholly owned subsidiary

Strategic direction of REA $(a)$

News does not propose to change REA's strategic direction regarding development of its business relating to online real estate classified advertising. News intends that REA will operate as a stand alone business unit within the News Group.

$(b)$ Restructure of existing arrangements between News and REA

The arrangements described in Section 4.3 will be replaced by agreements for the provision of services between REA and members of the News Group on standard intragroup terms...

Review of operations $(c)$

News will undertake a detailed review of the markets in which REA carries on business and the activities it carries on to evaluate their performance, profitability, prospects and strategic relevance to News.

News will investigate whether there are any opportunities to expand the REA business through advertising in newspapers, magazines and other News publications which are not currently available to REA. News will also review whether the REA product and the skills of REA employees can be applied to establish or develop equivalent businesses elsewhere in the News Corporation Group.

News will review management, capital and financing requirements of REA as a business unit within the News Corporation Group and establish the most efficient and appropriate management, capital and debt platform. To the extent that the internal policies and processes currently operated by REA differ from those of the News Corporation Group, they will be conformed to the policies and procedures which apply to News.

As part of this review, it may become apparent that some of the assets and/or businesses of REA, or markets within which REA operates, may not be regarded as having strategic relevance to News. The review will also consider the merits of and opportunities for divestiture of non-strategic assets, and the withdrawal from markets which are not considered to have strategic relevance. News has not identified any non-strategic assets, or any markets from which it proposes to withdraw. Those matters are not likely to be addressed until the review described above has been completed.

$(d)$ Corporate and management functions

$(i)$ Corporate Head Office

The functions currently performed by the corporate head office of REA (such as company secretarial, treasury and finance services) will be performed by personnel employed by members of the News Group.

$(ii)$ Board and Management

News will review the current management structure (including current management reporting lines) of REA following the conclusion of the Offer. As part of this process, it is proposed that John Hartigan take on the role of Chairman of REA. News intends to replace the members of the board of directors of REA with nominees of News, and to retain Simon Baker as the chief executive officer of REA.

$(iii)$ Employees

News will consider how many employees are required to support REA's business as a wholly owned subsidiary of News and (having made that assessment) whether the roles should be filled by existing News or REA employees. To the extent News decides that those roles should be filled by existing News employees, News will consider whether there are opportunities elsewhere in the News Group for the relevant REA employees. To the extent that News is able to identify opportunities to allocate alternative responsibilities to those employees within the News Group, News will offer employment to those current employees. There are likely to be redundancies of REA employees if such opportunities are not identified. News is not in a position to determine how many employees these intentions may affect as it has not made a decision as to how many employees are required to support the REA business within the News Group. However, News does not expect that there will be any redundancies amongst employees involved in REA's current sales and marketing activities.

$(e)$ General business integration

In addition to the general evaluation and review process described above, News intends to pursue efficiencies which may be available to the REA business as part of the News Group, including seeking to renegotiate contracts for the supply of goods and services to REA to take advantage of News Group purchasing arrangements, and consolidating the financing arrangements of REA with those of News.

Pending News' review of REA described above, News intends that the REA business will continue in the manner in which it is currently conducted.

Intentions for REA as a partly owned subsidiary 6.6

$(a)$ General intentions

If, following the close of the Offer, REA becomes a controlled entity but not a wholly owned subsidiary of News, it is News' present intention leave the arrangements between News and REA described in Section 4.3 in place, and for REA to continue to operate as a separate business. Some head office functions and other services currently provided by REA employees or third parties could, in the interests of both groups, be made available to REA under arrangements with the News Group. (News has not decided which functions would be likely to be the subject of such arrangements and does not intend to make a decision on those matters until after the close of the Offer Period.) Any future transactions between News and REA required to effect those steps will be entered into on arm's length terms. In addition, if required by law, News will seek any necessary approval of the remaining shareholders of REA to enter into those transactions.

In addition, it is News' present intention to:

$(i)$ maintain REA's listing on the ASX for so long as REA continues to maintain a spread of shareholders which is sufficient for the purposes of the ASX Listing Rules and it remains in the interests of REA as a whole to maintain a listing;
$(i)$ ensure that a majority of the Board of Directors of REA are nominees of News:
$(iii)$ review all aspects of REA's business to consider opportunities for News to introduce efficiencies to REA's operations; and
(iv) review the level of any future dividends payable by REA to ensure that these dividends are appropriate, having regard to any capital funding requirements of REA identified in News' strategic review.

$(b)$ Governance issues

The extent to which News' intentions for REA described in this Section may be realised, if REA is a partly-owned subsidiary, will be subject to:

the law and the ASX Listing Rules (for so long as REA remains listed on $(i)$ the ASX), in particular about related party transactions and conflicts of interest (in which regard, the role of independent directors of REA will be important);
$(ii)$ the legal obligation of the then REA board of directors to act in good faith in the best interests of REA and for proper purposes (in which regard, the role of independent directors of REA will also be important); and
$(iii)$ the outcome of the review referred to in Section 6.5(c).

$(c)$ Other issues

If, and for so long as, REA is a partly owned subsidiary of News, News expects that it will be appropriate for REA to retain separate corporate and operational management, whose functions will be likely to include strategic analysis, planning and marketing capability.

Implementation of News' objectives with respect to the strategic direction of REA may impact on the range of corporate or business opportunities which are presented to or identified by REA. However, to the extent that such opportunities are presented to REA on the one hand or News on the other, the opportunity would initially be pursued by the party to whom it was presented. If it is appropriate for the opportunities to be pursued by the other, the transfer of each opportunity would be negotiated on arm's length terms.

Further acquisitions of REA Shares 6.7

If News does not become entitled to compulsory acquisition of REA Shares, it may consider exercising some or all of the REA General Options, and/or acquiring additional REA Shares under the 'creep' provisions of Item 9 in section 611 of the Corporations Act. In summary, the 'creep' provisions permit News (and its associates) to acquire up to 3% of REA Shares every 6 months. Shareholder approval has already been obtained to permit News to exercise the REA General Options, and therefore it is possible that a combination of acquisitions under the 'creep' provisions and acquisitions through the exercise of REA General Options will (in aggregate) result in an increase in News' shareholding in excess of 3%. News has not yet decided whether it would acquire further REA Shares in the circumstances described above, as that will depend upon the extent to which News has capacity to acquire further REA Shares and market conditions prevailing at the time.

6.8 Other intentions

Other than as set out in this Section, it is the present intention of News:

$(a)$ to continue the business of REA;
not to make any major changes to the business of REA; and $(b)$
$\left( \mathrm{c}\right)$ to continue the employment of REA's present employees.

$7.$ FUNDING ARRANGEMENTS

$7.1$ Maximum cash consideration

The consideration for the acquisition of the REA Shares to which the Offer relates will be satisfied wholly in cash.

Based on the number of REA Shares, REA General Options and REA Employee Options on issue as at the date of this Bidder's Statement, assuming that News exercises all of the REA General Options, all the REA Employee Options are exercised and News acquires all of the REA Shares issued as a result, the maximum amount of cash that would be payable by News under the Offer will be approximately $126.0 million (the Offer Consideration).

$7.2$ Funding Arrangements

ŀ,

News will fund the Offer Consideration using uncommitted funds from its existing cash reserves which are held on short term deposit with several Australian banking institutions. These uncommitted funds are considerably in excess of the funds required to pay the Offer Consideration, although no particular funds have been reserved to pay the Offer Consideration.

8. AUSTRALIAN TAX CONSEQUENCES

$8.1$ Introduction

The following description is based upon Australian taxation laws in effect as at the date of this Bidder's Statement. It is not intended to be an authoritative or complete statement of the laws applicable to the particular circumstances of every REA Shareholder, nor is it intended to be advice. REA shareholders should obtain independent professional advice about the tax consequences of the Offer in relation to their own particular circumstances.

The following is a general description of the Australian income and capital gains tax consequences of the sale of REA Shares by REA Shareholders who hold their REA Shares on capital account, for the purpose of investment, and not in connection with the conduct of a business.

Certain REA Shareholders, such as those engaged in a business of trading or investment, those who acquired their REA Shares for the purpose of resale at a profit and those which are banks, insurance companies, tax exempt organisations or superannuation funds or persons who acquired their REA Shares in respect of their employment at REA (or an associated company), will or may be subject to special or different tax consequences that are peculiar to their circumstances.

REA Shareholders who are not resident in Australia for tax purposes should also take into account the tax consequences, under the laws of their country of residence, as well as under Australian law, of acceptance of the Offer.

The summary reflects the current provisions of the Incorne Tax Assessment Act 1936 (Cth) and the Income Tax Assessment Act 1997 (Cth) and the regulations made under those acts (collectively the Tax Laws).

$8.2$ Capital gains tax

Acceptance of the Offer will involve the disposal by REA Shareholders of their REA Shares, by way of transfer to News. This change in the ownership of the REA Shares will constitute a capital gains tax (CGT) event for Australian CGT purposes.

Australian resident REA Shareholders may make a capital gain or a capital loss from this CGT event, depending on whether their capital proceeds from the event are more than their cost bases (or, in some cases, indexed cost bases) of their REA Shares (in the case of a capital gain), or whether those capital proceeds are less than their reduced cost bases of those shares (in the case of a capital loss).

The capital proceeds of the CGT event will be the total amount of money received by an REA Shareholder in respect of the disposal of their REA Shares pursuant to the Offer.

The cost base of an REA Share will generally be the cost of its acquisition. Certain other expenses associated with acquisition and disposal, such as brokerage or stamp duty, may also be included in the cost base.

A taxpayer's capital gains and capital losses for a relevant year of income are aggregated and netted off to determine whether the taxpayer has a net capital gain. Any resultant net capital gain is included in the taxpayer's assessable income and is subject to income tax.

Capital losses may not be deducted against other income for income tax purposes, but if a taxpayer's capital losses exceed the taxpayer's capital gains, the net capital loss for the year may be carried forward to be offset against future capital gains.

If an REA Shareholder is an individual, complying superannuation entity or trust and held their REA Shares for 12 months or more before accepting the Offer, they will generally be entitled to a 'CGT Discount'. The CGT Discount entitles such shareholders to reduce their net capital gain from the sale of those shares (after deducting available capital losses of the shareholder) by half, in the case of individuals and trusts, or by one-third in the case of complying superannuation entities. Trustees should seek specific advice regarding the tax consequences of distributions attributable to discounted capital gains.

Alternatively, if an REA Shareholder acquired their REA Shares before 11.45am on 21 September 1999, the REA Shareholder could choose to be taxed on 100% of any capital gain that is calculated by reference to the REA Shareholder's indexed cost bases for the REA Shares (ie the cost bases, increased for inflation, but only up to 30 September 1999) if that method produces a lower taxable capital gain.

The CGT Discount is not available to companies.

Special rules apply under the Tax Laws to determine if shares have been held for the requisite 12 month period for the CGT discount to be available. REA Shareholders should seek their own advice in relation to this.

Under current law, REA Shareholders who are not resident in Australia for income tax purposes will only be subject to Australian CGT on the disposal of their REA Shares if they, together with their associates have beneficially owned 10% or more (by value) of the shares in REA at any time during the five years preceding the disposal of the REA Shares. Even then, non-resident REA Shareholders may be entitled to claim relief from Australian taxation under a double tax treaty, depending upon their particular circumstances.

The Australian Government recently announced changes to the current CGT rules that apply to non-residents that will narrow the range of assets to which those rules apply. The new rules will only apply if the relevant CGT event occurs on or after the amending bill receives Royal Assent and an amending bill is not expected to be released in the near future. At this stage, it appears unlikely that these new rules will be introduced in time to apply to non-resident REA Shareholders who accept the Offer but, if they do apply, they should be concessionary in nature.

Stamp duty and the Goods and Services Tax (GST) 8.3

No stamp duty or GST is payable on the transfer of REA Shares under the Offer.

9. ADDITIONAL INFORMATION

$9.1$ Statements made on the basis of ASX announcements

Where statements in this Bidder's Statement refer to or are based on statements made in or announcements made by REA to the ASX, News will provide a copy of those announcements free of charge to any person who asks for it during the Offer Period. Any requests for copies of those announcements may be made by writing to Computershare Investor Services at GPO Box 1903, Adelaide, South Australia, 5001.

$9.2$ Consents to be named

Each of Computershare and Allens Arthur Robinson have consented to statements in this Bidder's Statement being made based on statements by them in the form and context in which those statements have been included, and have not withdrawn that consent.

$9.3$ Approvals for payment of consideration

News is not aware of any REA Shareholders who require any approval referred to in Section 3.11(c) in order to be entitled to receive any consideration under the Offer.

So far as News is aware, unless the Reserve Bank of Australia has given specific approval under the Banking (Foreign Exchange) Regulations 1959 (Cth), payments or transfers to or for the order of prescribed governments (and their statutory authorities, agencies and entities) and, in certain cases, nationals of prescribed countries are subject to certain limited exceptions, restrictions or prohibitions. Based on searches by News, the prescribed governments, countries and entities are as follows:

supporters of the former government of Federal Republic of Yugoslavia; and
ministers and senior officials of the Government of Zimbabwe.

The places to which, and persons to whom, the Charter of the United Nations (Terrorism and Dealing with Assets) Regulations 2002 (Cth) currently apply include the Taliban, Usama bin Laden (also known as Osama bin Laden), a member of the Al-Qaida organisation (also known as the Al-Qaeda organisation), and any person named on the list maintained pursuant to United Nations Resolution 1390 (2002) by the Committee of the United Nations Security Council established pursuant to United Nations Resolution 1267 $(1999)$ .

The places to which and persons to whom the Charter of the United Nations (Sanctions -Afghanistan) Regulations 2001 (Cth) currently apply include a bin Laden Entity and a Taliban Entity (as those terms are defined in those regulations).

The Iraq (Reconstruction and Repeal of Sanctions) Regulations 2003 (Cth) apply in respect of assets of the previous government of Iraq, and assets removed from Iraq or acquired by a senior official of the previous government of Iraq or their immediate families. Transactions with such assets (including, if relevant, REA Shares) require Ministerial approval.

$9.4$ Other material information

There is no other information which:

is material to the making of the decision by a person to whom these Offers are $(a)$ made whether or not to accept an Offer:
$(b)$ is known to News; and
has not previously been disclosed to the holders of REA Shares other than: $\langle c \rangle$
- as disclosed in this Bidder's Statement; and $(i)$
- $(ii)$ as set out in the Annexures to this Bidder's Statement.

$\bar{\gamma}$

$\epsilon$

DEFINED TERMS AND INTERPRETATION $10.$

$10.1$ Defined Terms

in this Bidder's Statement the following words have these meanings unless the contrary intention appears or the context otherwise requires:

Acceptance Form means the acceptance form which accompanies this Bidder's Statement.

Accepted Shares has the meaning set out in Section 3.10(a).

Announcement Date means 1 August 2005.

Approval means an approval or consent which is required by law or by any Public Authority.

ASIC means the Australian Securities and Investments Commission.

ASTC means ASX Settlement and Transfer Corporation Pty Ltd (ABN 49 008 504 532).

ASTC Settlement Rules means the operating rules of the settlement facility provided by ASTC.

ASX means Australian Stock Exchange Limited (ABN 98 008 624 691).

ASX Listing Rules means the official listing rules of ASX.

Bidder's Statement means this document.

Broker means a person who is a share broker and a Market Participant in CHESS.

business day means a day that is not a Saturday, a Sunday or a public holiday or bank holiday in Sydney.

CGT means capital gains tax.

CHESS means Clearing House Electronic Subregister System, which provides for the electronic transfer of securities in Australia.

CHESS Holding means a holding of REA Shares on the CHESS subregister of REA.

CHESS Participant means a participant of ASX admitted to participate in the settlement facility operated by ASTC in accordance with the ASTC Settlement Rules.

Controlling Participant means the CHESS Participant who is designated as the controlling participant for shares in a CHESS Holding in accordance with the ASTC Settlement Rules.

Corporations Act means the Corporations Act 2001 (Cth).

Foreign Takeovers Act means the Foreign Acquisitions and Takeovers Act 1975 (Cth).

Issuer Sponsored Holding means a holding of REA Shares on the issuer sponsored subregister of REA.

Market Participant means a market participant under the ASTC Settlement Rules.

News means News Limited (ABN 47 007 871 178).

News Corporation means News Corporation (ARBN 111 480 561) of 1211 Avenue of the Americas, New York, New York, USA

News Corporation Group means News Corporation and its subsidiaries.

News Group means News and its subsidiaries.

Offer means the offer for REA Shares contained in Section 3.

Offer Period means the period during which the Offer is to remain open in accordance with Section 3.3.

Prescribed Occurrence has the meaning given in Section 3.6(c).

Public Authority includes:

any government in any jurisdiction, whether federal, state, territorial or local; $(a)$
any minister, department, office, commission, delegate, instrumentality, agency, $(b)$ board, authority or organisation of any government or in which any government is interested;
$\left( c\right)$ any non-government regulatory authority; and
any provider of public utility services, whether or not government owned or (d) controlled.

REA means realestate.com.au Limited (ABN 54 068 349 066).

REA Directors means the directors of REA from time to time.

REA Employee Option means an option issued under the REA employee option scheme which provides the holder with a right to subscribe for one REA Share.

REA General Option means an option to subscribe for one REA Share.

REA Group means REA and its subsidiaries.

REA Options means the REA General Options and REA Employee Options.

REA Shareholder means a person registered as a holder of REA Shares.

REA Shares means fully paid ordinary shares in REA and all Rights attaching to them.

Rights means, in the case of REA Shares, all accretions and rights attaching to or arising from the REA Shares after the date this Bidder's Statement is given to REA (including, without limiting the generality of the foregoing, all rights to receive dividends and to receive or subscribe for shares, stock units, notes or options and all other distributions or entitlements declared, paid or issued by REA).

Target's Statement means the Target's Statement to be issued by REA in response to this Bidder's Statement, as required by the Corporations Act.

$10.21$ Interpretation

In this Bidder's Statement, the following rules of interpretation apply unless the context requires otherwise.

$(a)$ A reference to time is a reference to Sydney time.
Headings are for convenience only and do not affect interpretation. $(b)$
$(c)$ The singular includes the plural and conversely.
A reference to a Section is to a section of this Bidder's Statement. $(d)$
$(e)$ A gender includes all genders.
Where a word or phrase is defined, its other grammatical forms have a $(f)$ corresponding meaning.
$ or A$ or ¢ is a reference to the lawful currency in Australia, unless otherwise $\left( 0\right)$ stated.
US$ is a reference to the lawful currency in the United States of America. $(h)$
A reference to a person includes a body corporate, an unincorporated body or $(i)$ associations, another entity as well as a natural person.
A reference to a person includes a reference to the person's executors, $($ i) administrators, successors, substitutes (including, but not limited to, persons taking by novation) and assigns.
A reference to any legislation or to any provision of any legislation includes any $(k)$ modification or re-enactment of it, any legislative provision substituted for it and all regulations and statutory instruments issued under it.
A reference to any instrument or document includes any variation or replacement $\langle 0 \rangle$ of it.
$(m)$ Mentioning anything after includes, including, for example or similar expressions, does not limit what else might be included.
A term not specifically defined in this Bidder's Statement has the meaning given to $(n)$ it in the Corporations Act or the ASTC Settlement Rules, as the case may be.
A reference to a right or obligation of any two or more persons confers that right, $(o)$ or imposes that obligation, as the case may be, jointly and severally.
A reference to you is to a person to whom the Offer is made under Section 3.5. $(p)$
A reference to your REA Shares is to REA Shares in respect of which you were $(q)$ registered as a holder on the Register Date.
A reference to an obligation is to an obligation whether or not enforceable $(r)$ presently or in the future and whether on the fulfilment of a condition or by reason of the act of a third party or not.
A reference to an arrangement includes a relevant agreement as defined in the $($ = $)$ Corporations Act.
A reference to an associate, subsidiary, related body corporate, relevant interest $(t)$ and voting power are references to those terms as defined in the Corporations Act.

APPROVAL OF THE BIDDER'S STATEMENT $11.$

$11.1$ Approval

This Bidder's Statement has been approved by a resolution of the directors of News.

$11.2$ Dated

1 August 2005

11.3 Signed

For and on behalf of News Limited.

Stephonkie

Director

Annexure A - News' announcement of Offer

News Limited

MEDIA RELEASE

Takeover offer for realestate.com.au at $2 per share

Monday August 1, 2005

News Limited (News) today announced its intention to make a takeover offer (the Offer) to acquire all of the shares of realestate.com.au Limited (REA) which News does not already own. News intends to offer $2.00 cash per share. The Offer will permit shareholders to accept for all or part of their holdings.

News has acquired a further 3% of REA shares today from ninemsn Pty Limited at the Offer price, which takes holding in REA to 43.69%.

News expects to lodge and serve its bidder's statement later today. News expects that the Offer will be open for acceptance in approximately 2 weeks' time.

The Offer price represents a significant premium to the price of REA shares on the ASX up to 29 July 2005 (being the last trading day prior to announcement of the Offer):

a 19% premium to the last price at which REA shares traded on the ASX of $1.68.
a 26% premium to the 1 month volume weighted average share price of $1.59; and
a 33% premium to the 3 month volume weighted average share price of $1.50.

News Limited chief executive officer, Mr John Hartigan, said: "We believe this offer represents fair value. It is a straightforward full cash offer with limited conditions, and no minimum acceptance condition. The Offer will provide REA shareholders with the opportunity to exit an illiquid investment at an attractive price, or to retain part of their investment if they wish."

The Offer will be subject to conditions relating to:

approval under the Foreign Acquisitions and Takeovers Act;
no material adverse change; and
no prescribed occurrences.

These conditions are described further in Annexure A.

more...

NEWS LIMITED .ABN 47 007 871 178 .2 HOLT STREET . SURRY HILLS . 2010 . NSW . AUSTRALIA

NEWS LIMITED

Annexure A

Offer Conditions

The Offer will be subject to the following conditions.

$(a)$ FIRB

One of the following occurs before the end of the Offer Period:

News receives a notice from the Treasurer of the Commonwealth of $\left( i \right)$ Australia (the Treasurer) or his agent to the effect that there is no objection to the acquisition of REA Shares by News (by any means permitted by the Corporations Act) under the Commonwealth Government's foreign investment policy, such notice being unconditional;
$(ii)$ the period provided under the Foreign Takeovers Act during which the Treasurer may make an order under section 18 or an interim order under section 22 of the Foreign Takeovers Act prohibiting the acquisition of REA Shares by News (by any means permitted by the Corporations Act) has elapsed, without such an order being made; or
if an interim order prohibiting such acquisition is made, the subsequent $(iii)$ period for making a final order prohibiting the acquisition of REA Shares by News has elapsed, without such final order being made.

$(b)$ No material adverse change

Save as publicly announced to ASX prior to the Announcement Date, none of the following events has happened since 30 June 2004, and none of the following events happens or is disclosed between the Announcement Date and the end of the Offer period (other than as a result of the actions of News):

any change in the business, assets, liabilities, financial or trading position, $(i)$ profitability or prospects, the status or terms of arrangements entered into with REA or any of its subsidiaries or the status or terms of any approvals from any public authority which are applicable to REA or any of its subsidiaries, which has a material adverse effect on REA; or
$(ii)$ any event, action, proceeding, circumstance or change in circumstance which is reasonably likely to result in a material adverse effect of the kind mentioned in paragraph (i) above.

more...

NEWS LIMITED .ABN 47 007 871 178 . 2 HOLT STREET . SURRY HILLS . 2010 . NSW . AUSTRALIA

NEWS LIMITED

$(c)$ No prescribed occurrences

None of the occurrences specified in s652C of the Corporations Act happens either:

between the Announcement Date and the time News's bidder's statement $(0)$ is given to REA; or
between the time News's bidder's statement is given to REA and the end $(i)$ of the Offer Period, other than the issue of REA shares as a result of exercise of options to subscribe for REA shares which are on issue as at the Announcement Date.

For further information contact: Greg Baxter, director corporate affairs News Limited Tel: +61 2 9288 3242 Mobile: 0419 461 368 Fax: +61 2 9211 1480 Email: [email protected]

NEWS LIMITED .ABN 47 007 871 178 . 2 HOLT STREET . SURRY HILLS . 2010 . NSW . AUSTRALIA

Annexure B - REA announcements since 30 June 2004

$\hat{\mathcal{A}}$

ASX Announcement	Dato
Online market booming as REA records biggest day ever	16/07/2004
Preliminary Final Report	25/08/2004
Annual Report	29/09/2004
Change in substantial holding	30/09/2004
Becoming a substantial holder	07/10/2004
Real Estate Booming Online	13/10/2004
Appendix 3B - Exercise of employee options	14/10/2004
Annual Report & Notice of AGM	18/10/2004
Appendix 3B - Exercise of employee options	05/11/2004
Results of AGM	18/11/2004
Change in substantial holding	21/12/2004
Appointment of New CFO	31/01/2005
Appendix 3B - Exercise of employee options	01/02/2005
January – A Soaring Month for Online Real Estate	02/02/2005
Half Yearly Report	10/02/2005
Half Year Audit Review	10/02/2005
Commences Print Publishing Trial	15/02/2005
Appendix 3B - Exercise of employee options	16/02/2005
Launch of Inner West Edition of REA Property Guide	21/04/2005
Appendix 3B - Exercise of employee options	09/05/2005
Appendix 3B - Exercise of employee options	26/05/2005
Launches New Zealand Listings	31/05/2005
On Track to Double Profit	08/06/2005
Appendix 3B - Exercise of employee options	05/07/2005

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Transfer and Acceptance Form - Cash Offer

This is an important document and requires your immadiate attention. If you are in doubt about how to deal with it, please consult your financial or other

Use this form to accept News Limited's Offer for your realestate.com.au Limited shares

El Consideration

The consideration applicable under the terms of this Offer

Issuer Sponsored Holdings

If you hold your realestate.com.au Limited shares in an Issues Sponsored Holding (see "Subregister" above), to accept the Offer you will need to sign and return this form. If you wish to accept the Offer for less than your entire holding, please specify below the number of realestate com au Limited shares the subject of your acceptance:

			realestate.com.au Limited shares

You will be deemed to have accepted the Offer for your entire holding if you do not specify a lesser number.

CHESS Holdings

If you hold your realestate com au Limited shares in a CHESS Holding (see "subregister" above), to accept the Offer you can either:

Instruct your Controlling Participant directly - normally your stockbroker

оr

Authorise News Limited to inform your Controlling Participant of your instructions for the Controlling Participant to accept on your behalf, which you can do by signing and returning the form. By signing and returning the form you will be deemed to have authorised News Limited to inform your Controlling Participant of your instructions

In either case, you will be deemed to have accepted the Offer for your entire holding if you do not specify a lesser number in instructions received from your Controlling Participant.

D Contact details

Please provide your contact details in case we need to speak to you

Name of contact person

Contact person's daytime telephone number

Sign here - this section must be signed before we can process this form.

i/We accept the Offer made by News Limited in respect of ordinary shares in realestate.com.au Limited. I/We hold and I/we agree to be bound by the terms and conditions of the Offer (including the instructions as to acceptance of the Offer on the back of this form) and transfer those of my/our realestate.com.au Limited shares to News Limited for which tiwe have accepted the Offer for the consideration specified in the Offer.

Individual or Securityholder 1

Individual or Securityholder 2

Individual or Securityholder 3

Sole Director and Sole Company Secretary

Director

Director/Company Secretary

The directors reserve the right to make amendments to this form where appropriate. Please refer to the lodgement instructions overleaf.

Dated

See back of form for completion guidelines

How to complete this form

Acceptance of the takeover offer

Lodgement of Transfer and Acceptance Form

This Transfer and Acceptance Form must be received at the Adelaide office of Computershare Investor Services Ply Limited by no later than 7.00pm (Sydney time) on 15 September 2005, Return this Transfor and Acceptance Form to:

Postal AddressComputershare Investor Services Pty LimitedGPQ Box 1903Adelaide SA 5001	ŌR.	Hand DaliveryComputershare Investor Services Pty LimitedLevel 5115 Gren ell StreetAdelaide SA 5000
---------------------------------------------------------------------------------------------------	-----	--------------------------------------------------------------------------------------------------------------------

Privacy Statement

Personal information is collected on this form by Computershare Investor Services Pty Limited ("CIS"), as registrar for securities issuers ("the issuer"), for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. Your personal information may be disclosed to our related bodies corporate, to external service companies such as print or mail service providers, or as otherwise required or permitted by law. If you would like details of your personal information held by CiS, or you would like to correct information that is inaccurate, incorrect or out of date, please contact CiS. In accordance with the Corporations Act 2001, you may be sent material (including matkeling material) approved by the issuer in addition to general corporate communications. You may elect not to receive markeling material by contacting CIS. You can contact CIS using the details provided on the front of this form or E-mail [email protected]. Please note this form may not be used to change your address.

Please return the completed form in the envelope provided or to the address opposite:

Computershare Investor Services Pty Limited GPO Box 1903 Adelaide SA 5001

lews Limited

This is a Supplementary Bidder's Statement of News Limited dated 15 August 2005 under s643 of the Corporations Act. This Supplementary Bidder's Statement supplements, and should be read together with, the Bidder's Statement dated 1 August 2005 given by News Limited to REA and lodged with the Australian Securities & Investments Commission (ASIC) on 1 August 2005 (Bidder's Statement). No other supplementary bidder's statement has been filed by News Limited in relation to the Bidder's Statement. A copy of this Supplementary Bidder's Statement was lodged with ASIC on 15 August 2005. Neither ASIC nor any of its officers take any responsibility for the contents of this Supplementary Bidder's Statement. This Supplementary Bidder's Statement has been approved by a resolution passed by the directors of News Limited, and has been signed by John Hartigan as a director of News Limited

15 August 2005

Dear realestate.com.au shareholder

UPDATE ON NEWS LIMITED'S OFFER FOR YOUR REALESTATE.COM.AU LIMITED SHARES

On behalf of News Limited, I am pleased to enclose a Bidder's Statement containing an offer (the Offer) to acquire up to all of your ordinary shares in realestate.com.au Limited (REA). Also enclosed is an Acceptance Form to enable you to accept the Offer.

News is offering $2.00 cash for each REA share that you hold. The Offer is now open for acceptance and is scheduled to close on Thursday 15 September 2005. To accept the Offer, you should follow the instructions set out in the bidder's statement.

The purpose of this letter is to update you on certain events that have occurred since the Bidder's Statement was lodged.

FIRB approval condition satisfied

On Monday 15 August 2005, the Foreign Investment Review Board informed News that there were no objections under Australia's foreign investment policy to News Limited acquiring REA shares under the Offer or by any other means permitted by the Corporations Act. As a result, the condition in Section 3.6(a) of the Bidder's Statement has been satisfied.

Revised revenue and profit forecasts from REA

On Thursday 11 August 2005, REA announced revised revenue and profit forecasts for the 2005 financial year. On Friday 12 August 2005, REA filed a letter to shareholders which stated that a copy of the 11 August announcement had been included with the letter, and informed shareholders that the sub-committee of the REA board established to consider and respond to the Offer intended to recommend that you reject the Offer. News remains of the view that the Offer represents a fair price for REA.

SIGNED for and on behalf of News Limited.

John Hartigan Chief Executive Officer

# News Limited

15 August 2005

Dear realestate.com.au optionholder

I am pleased to enclose a Bidder's Statement of News Limited in relation to a takeover bid (the Offer) for all of the ordinary shares in realestate.com.au Limited (REA) which News Limited does not already own. Also enclosed is a Transfer and Acceptance Form.

News Limited is offering A$2.00 cash for each REA ordinary share. The Offer permits REA shareholders to accept for all or part of their holdings.

The Bidder's Statement is being sent to you because you are the holder of options to subscribe for ordinary shares in REA (REA Options). The Offer extends to any REA ordinary shares that are issued during the period from 8 August 2005 to the expiry of the Offer, as a result of the exercise of REA Options. The Offer is scheduled to close on 15 September 2005.

You may be entitled, or may become entitled prior to the expiry of the Offer, to exercise some or all of your REA Options. If you exercise REA Options and are issued REA ordinary shares before the expiry of the Offer, you will be able to accept the Offer in respect of those REA ordinary shares.

If you wish to accept the Offer in respect of those REA ordinary shares, simply complete the enclosed Transfer and Acceptance Form and return it in the envelope provided (prepaid in Australia). When completing the Form, you must insert in the box titled "Your holding in realestate.com.au Limited" the number of REA ordinary shares you hold. Your completed Form must be received at the Adelaide office of Computershare Investor Services Pty Limited by no later than the close of the Offer, currently 7.00pm (Sydney time) on 15 September 2005.

Should you have questions about the Offer, please consult your financial or other professional adviser.

Yours sincerely,

John Hartigan Chief Executive Officer

AI assistant

REA GROUP LTD — M&A Activity 2005

65679_rns_2005-08-14_0213ae10-6784-4ceb-8dff-85eafb94756b.pdf

Allens Arthur Robinsor

News Limited - Takeover Offer for realestate.com.au Limited

# NEWS LIMITED

CASH OFFER

FOR REALESTATE.COM.AU LIMITED

News Limited

CORPORATE DIRECTORY

Share Registry

Legal Adviser to News Limited

Important Dates

Important Information

ASIC

Privacy Collection Statement

Investment Decisions

Table of Contents

# NEWS LIMITED

This page has been left intentionally blank.

SUMMARY OF THE OFFER 1.

$2.$ HOW TO ACCEPT THE OFFER

3. THE OFFER TERMS

$3.1$ The Offer

$3.2$ Consideration

$3.3$ Offer Period

$3.4$ How to accept the Offer

$(a)$ Issuer Sponsored Holdings

$(b)$ CHESS Holdings

$(c)$ Nominee holdings

$(d)$ Status of Acceptance Form

$(e)$ News' discretion

$3.5$ Persons to whom the Offer is made

$3.6$ Conditions

$(a)$ FIRB approval

$(b)$ No material adverse change

Prescribed Occurrences $(c)$

$3.7$ Nature of conditions

$3.8$ Waiver of conditions

3.9 Notice of status of conditions

$3.10$ Effect of acceptance

$3.11$ Obligations of News

$3.12$ Variation

$3.13$ Withdrawal

$\mathbf{4}$ BIDDER'S PROFILE

4.1 Overview of News Corporation

$4.2$ Website access

$4,3$ Current arrangements between News and REA

INFORMATION ON REA SECURITIES 5.

$5.1$ Disclaimer

$5.2$ REA securities on issue

REA Shares are quoted on ASX.

5.3 REA General Options

$(a)$ Reorganisation of Capital and Adjustments

$(b)$ New Issues

$(c)$ Listing of Options

$(d)$ Transfer

$(\circ)$ Ranking of Shares

$5,4$ Recent REA Share Price

5.5 Interests in REA securities

Relevant interest in REA Shares and voting power in REA Shares as at the $(a)$ date of the Bidder's Statement

$(b)$ Relevant interest in REA Shares and voting power in REA as at the date of the Offer

$(c)$ Acquisitions of REA Shares

5.6 Benefits to REA shareholders in the last 4 months

57 Escalation agreements

5.8 Date for determining holders of securities

5.9 Regulatory matters and application of conditions -

$5.10$ Effect of breach of conditions

6. INTENTIONS

$6.1$ Intentions generally

6.2 Compulsory acquisition

$6,3$ REA General Options

$6.4$ REA Employee Options

$6.5$ Intentions for REA as a wholly owned subsidiary

Strategic direction of REA $(a)$

$(b)$ Restructure of existing arrangements between News and REA

Review of operations $(c)$

$(d)$ Corporate and management functions

$(i)$ Corporate Head Office

$(ii)$ Board and Management

REA GROUP LTD M&A Activity 2005