Coles Myer and Macquarie Bank proposal to acquire ALH

13 October 2004

Coles Myer Limited (CML) and Macquarie Bank Limited (MBL) today announced a proposal to acquire all of the issued ordinary shares in Australian Leisure & Hospitality Group Limited (ALH) at $3.35 a share.

The proposal, via a special purpose joint venture vehicle, CMM Hotel & Retail Investments Pty Ltd (CMM), values ALH shares at $1.18 billion and is a 35.1 per cent premium to the $2.48 per share closing price for ALH shares on 30 June 2004, the day before Woolworths’ 1 July 2004 purchase of ALH shares. It is also 20 cents higher than Bruandwo’s revised offer of $3.15 per share and is at the top end of the Independent Expert’s valuation range of $3.125 to $3.355 per share (adjusted for the final dividend) set out in the ALH target statement.

The Board of ALH has unanimously recommended that shareholders accept the CMM proposal in the absence of a more favourable offer. The proposal will be undertaken by an unconditional scheme of arrangement (Scheme) whereby 75 per cent shareholder approval by value (and 50 per cent by number) of those present and voting is required. It is proposed that a meeting be called to approve the Scheme in January 2005.

MBL’s spokesman for CMM, Mr Michael Cook, said: “ALH is a very attractive asset for CMM, as it comprises Australia’s largest hotel group, with Australia’s largest non-casino gaming machine portfolio and one of Australia’s most successful retail liquor businesses.

“The proposal further evidences MBL’s willingness and ability to provide innovative financing solutions in support of its clients and partners.”

If successful, MBL and CML will contribute 60 per cent and 40 per cent respectively of the equity funding of the joint venture vehicle.  MBL’s total investment commitment is approximately $260 million.

Post transaction, and subject to necessary consents, 17 venues and associated detached bottleshops in Queensland, together with development rights in relation to a further 14 Victorian bottleshops will be sold to CML for approximately $255 million.  CMM will run on a stand-alone basis with a view to maximising profitability and growth of the company.

MBL has advised on the establishment of a $440 million senior debt facility underwritten and arranged by Barclays Capital; a bridge facility provided by MBL; and other equity and financing facilities provided by MBL and CML.  Post implementation, Macquarie Equity Capital Markets will underwrite and market a $220 million subordinated retail note issue.

The impact on MBL’s capital position will be a reduction to the Tier 1 capital ratio of no more than 1.8 per cent.

MBL believes the investment in CMM presents an extremely attractive opportunity.  Consistent with its operating philosophy, MBL intends, in the short to medium term, to present the CMM investment opportunity to a range of investors, including the possible establishment of an unlisted managed fund vehicle.

For further information, please contact:

Erica Sibree
Investor Relations
Macquarie Bank Limited
Tel: (612) 8232 5008
Mobile: (614) 1302 6309

Lisa Jamieson
Public Relations
Macquarie Bank Limited
Tel: (612) 8232 6016
Mobile: 0416 237 332