Macquarie Media Group Initial Public Offer

04 October 2005

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Macquarie Bank Group⁽²⁾ (Macquarie) today launched Macquarie Media Group (MMG)^TM(1), a new fund which is seeking to raise between A$927 million and A$996 million in an initial public offering (IPO) of stapled securities and applying to list on the Australian Stock Exchange (ASX).

MMG has been established to acquire, own and manage a broad portfolio of media assets. Details of MMG’s IPO are contained in a combined prospectus and product disclosure statement which was lodged with the Australian Securities and Investment Commission today.

MMG will have a mandate to acquire media assets globally, and will target assets which have stable earnings and cash flows, strong market positions, barriers to entry and the potential for further earnings improvement through market growth, technological change and leveraging economies of scale.

MMG’s initial asset is a 100% shareholding in Macquarie Regional Radioworks Pty Limited (Macquarie Regional Radioworks), which combines the assets of RG Capital Radio Limited and DMG Regional Radio Pty Limited that were separately acquired by Macquarie in September 2004. Macquarie Regional Radioworks is a portfolio of 85 commercial radio broadcasting licences with exposure to 44 Licence Areas across six States.

MMG Executive Chairman is Tim Hughes, who has over 20 years’ experience managing media businesses.

“We are delighted to offer investors the opportunity to participate in MMG. This exciting new fund managed by the Macquarie will provide investors with a combination of exposure to the attractive investment characteristics of the media sector as well as the stable underlying cash flow of Macquarie Regional Radioworks.”

“The combination of the partly paid securities and the fact that MMG will be ungeared at listing, means that MMG is well positioned to capitalise on opportunities that meet its investment criteria,” Mr Hughes said.

MMG Managing Director, Alex Harvey said, "The development of MMG is a logical extension of Macquarie's existing specialist funds management platform and will combine management expertise from quality media operators with the Macquarie’s fund and asset management expertise and deal origination and execution capabilities.”

Overview of Offer

MMG is seeking to raise A$927 – A$996 million through the issue of 195.25 million stapled securities (including the issue of 40 million stapled securities to Macquarie)(Offer), with each stapled security comprising one unit in Macquarie Media Trust⁽³⁾, issued by Macquarie Media Management Limited (MMML, a wholly-owned subsidiary of Macquarie) as responsible entity, and one share in Macquarie Media Holdings Limited (MMHL) stapled together.

The Offer price per stapled security will be payable in two instalments. The final price of the first instalment will be set by way of a bookbuild, which will have an indicative price range of A$2.70 – A$3.05 per stapled security. The second instalment price will be A$2.00 per stapled security and will be payable on the first anniversary of the allotment date of stapled securities under the Offer. Proceeds from the first instalment will be used to acquire a 100% interest in Macquarie Regional Radioworks from Macquarie, repay the existing borrowings of Macquarie Regional Radioworks and its holding company, Macquarie Media Group Pty Limited, and fund the costs of the capital raising. The proceeds of the second instalment will be used to make further acquisitions in the media sector.

The Offer has both retail and institutional components, and comprises:

• a Broker Firm Offer open to Australian and New Zealand resident retail investors who have received a firm allocation from their Broker;
• a Priority Offer available to Australian and New Zealand eligible ordinary shareholders of Macquarie Bank Limited and eligible ordinary stapled security holders of Macquarie Airports, Macquarie Infrastructure Group, Macquarie Communications Infrastructure Group, Diversified Utility and Energy Trusts and Macquarie Capital Alliance Group (all as at 21 September 2005);
• an Employee Offer to Australian and New Zealand eligible employees of Macquarie Regional Radioworks and personnel seconded from Macquarie to Macquarie Regional Radioworks;
• a General Offer to Australian and New Zealand resident retail investors (the Broker Firm Offer, the Priority Offer, the Employee Offer and the General Offer collectively form the Retail Offer); and
• an Institutional Offer available to certain Australian, New Zealand and offshore institutional investors.

Macquarie will reinvest part of the proceeds its receives on the sale of its interest in Macquarie Regional Radioworks and/or part of the monies received from repayment of certain loans it has made to the holding company of Macquarie Regional Radioworks to purchase 40 million stapled securities in MMG at the first instalment final price. Macquarie will therefore hold 20% of the issued capital of MMG at listing. Macquarie expects that it or a Macquarie-managed fund will continue to hold the stapled securities for the foreseeable future. The second instalment will be payable on these stapled securities.

The Bookrunner and sole Lead Manager for the Offer is Macquarie Equity Capital Markets Limited. ABN AMRO Rothschild, J.P. Morgan Australia Limited and UBS AG, Australia Branch are Co-Lead Managers to the Offer.

The key dates for the Offer are set out below. The dates and times are indicative only and MMG, in consultation with the Lead Manager, reserves the right to vary the dates and times of the Offer.

A copy of the combined prospectus and product disclosure statement for the MMG stapled securities is available at www.macquarie.com.au/au/mmg to Australian and New Zealand residents only (accessing the website from within Australia or New Zealand as the case may be). That document should be considered before making any decision to acquire the stapled securities. The offer of stapled securities will be made in, or accompanied by, a copy of that document (and, where relevant, the New Zealand Investment Statement) and persons investing in MMG will need to complete the application form accompanying that document.

Board of Directors

The boards of both MMHL and MMML have a majority of independent directors. Mr Tim Hughes will be Executive Chairman of MMHL and MMML and will act as Macquarie’s representative on both boards. Mr Nicholas Moore, head of Macquarie’s Investment Banking Group, will also be appointed to MMML’s board.

Management

MMG will be managed by MMML, a wholly-owned subsidiary of Macquarie.

Impact on Macquarie

Macquarie advises that if the Offer is successfully completed, it may receive profits from the sale of Macquarie Regional Radioworks to MMG. The amount of any profits will depend on the final first instalment price per stapled security achieved by the bookbuild process.

MMML, as manager of MMHL and responsible entity of MMT, will be entitled to receive both a base management fee and a performance management fee (depending on performance) going forward with respect to MMG, with fees payable as disclosed in the combined prospectus and product disclosure statement.

In addition, Macquarie will also receive fees as Lead Manager of the initial public offering. These fees are disclosed in the combined prospectus and product disclosure statement.

There is no guarantee that any profits will be realised from the Offer and MMG reserves the right to decide not to proceed with the Offer at any time prior to allotment.

As noted above, Macquarie will reinvest part of any proceeds its receives on the sale of its interest in Macquarie Regional Radioworks and/or part of the monies received from repayment of loans from Macquarie to the holding company of Macquarie Regional Radioworks to purchase 40 million stapled securities in MMG, which is equal, based on the first instalment only, to a total investment of approximately A$115 million at the mid-point of the first instalment indicative price range. The second instalment will be payable on these stapled securities.

The Group’s Tier 1 Capital Ratio is expected to increase by up to 1 per cent as a result of the IPO of MMG.

⁽¹⁾ Trade mark of Macquarie Bank Limited.

⁽²⁾ This statement does not constitute an offer of securities or a recommendation to acquire or subscribe for securities. Investments in MMG are not deposits with or other liabilities of Macquarie Bank Limited or of any other entity in the Macquarie Bank Group and are subject to investment risk, including possible delays in repayment and loss of income and capital invested.  None of the members of Macquarie Bank Group, including Macquarie Media Management Limited (MMML), guarantees any particular rate of return on MMG stapled securities or the performance of MMG, nor do they guarantee the repayment of capital from MMG. No particular investor’s investment objectives, financial situation or particular needs have been taken into consideration.  Investors should obtain the prospectus and consult their own legal, tax, business or other financial advisers in connection with any acquisition of Macquarie Media Group (MMG) stapled securities.

⁽³⁾ (ARSN 116 151 467).

For further information, please telephone:

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

Media enquiries
Julie Sheather
Public Affairs Manager
Tel: (612) 8232 6842
Email: julie.sheather@macquarie.com

Matthew Russell
Public Relations
Macquarie Bank Limited
Tel: (612) 8232 4102
Mobile: (614) 1069 9532

This notice does not constitute an offer or invitation in any jurisdiction where, or to any person to whom, such an offer or invitation would be unlawful. This notice does not constitute an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended, or an exemption from registration.