takeover at these prices just not on, page-22

Josette herewith summary:

1. Original issue date was in fact 2006 ( Hence the step up date of June 2011 - 5 years after set up although I think the issue date was a few months earlier than June in 2006)

2. The Issue price was face value of $100 per unit and was initially only for $100million but they were allowed to accept up to 50% above that and did in fact accept $150million.

3. There are trigger events one of which is a takeover bid that is recommended by directors or the directors recommend a scheme of arrangement for the issuer whereby a person(Company ) would obtain a relevant interest great than 50% of the ordinary shares. Another trigger is a breach but that is not relevant.

4. The holder than gets to request that the issuer realise all of the hybrids held by that holder - you have 15 days after the issuer has given notice of a trigger event.

5. The issuer ( Elders) can then either convert or resell the hybrids.

6. In the event of a takeover the the conversion rate is adjusted to what is effectively either 95.5% of the VWAP (over 20 days) or the VWAP plus 50% of the difference between that price and the offer price.

7. The amount you receive per unit is the face value $100 plus the 12 months unpaid distributions.

8. As I see it however they can resell the hybrids which cannot be less than the $100 plus 12 months unpaid distributions.

9. There is this clause which has always bothered me as it has a word that legally is vague - The word may also has a meaning may not have to so here is that clause:

If the Conversion or Resale occurs as a result of a takeover bid for Futuris or as a result of certain schemes of arrangement involving a change of control of Futuris, the
conversion rate or proceeds of Resale may be adjusted to provide Holders with some of the premium (if any) in the takeover or scheme price over the market price for
Ordinary Shares which applied before announcement of the bid or scheme (see clause 7.1 and the adjustment mechanism in clause 7.2 of the Terms).

10. They could however have a merger and as a result of which IMO no shareholder actually gets 51% and then the takeover event is not triggered. So if you had a very large ( I suppose given the nature of Elders a medium size would do)company you could do a reverse takeover and if no-one became an outright controlling company you would have no trigger event but you would then still have to service the hybrids in order to pay distributions to shareholders. They would have to wait until the next remarketing date to resell the hybrids that would be June 2016.

11. I have always been surprised that the company never buys these up on open market as they rarely trade in the 90c in the $1.00 and have ranges that are between 75c in the $1.00 to 88c in the $1.00. they could just be a buyer and keep mopping then up over time.

The document is available on the Elders website.