auselect buying lsg holding of sed shares, page-3

lsg running hard on sed takeover ASX ANNOUNCEMENT
14 JULY 2006
Proposed Acquisition of Sedimentary
AuSelect Limited (AuSelect) today announced that it intends to acquire Sedimentary
Holdings Limited (Sedimentary) by way of a scrip takeover offer (the Offer) for all the
issued shares in Sedimentary.
The merger of AuSelect and Sedimentary will create a mining company with the
critical mass to target high quality, value investments in the resource sector.
Key Points
􀂾 AuSelect is offering 2 AuSelect shares for every 9 Sedimentary shares,
equivalent to $0.30 per ordinary Sedimentary share (1).
􀂾 The Offer represents a premium to Sedimentary’s closing share price and
volume weighted average price (VWAP) (2) of:
Latest closing on 13 July $0.210 42%
- 5-day VWAP $0.206 45%
- 30-day VWAP $0.189 57%
- 90-day VWAP $0.212 41%
􀂾 AuSelect’s share price is supported by its Net Tangible Asset (NTA) backing.
Based on AuSelect’s NTA per share(3), the Offer represents a premium to
Sedimentary’s closing share price(2) of 61% (pre-tax NTA) and 51% (post tax
NTA).
􀂾 Sedimentary’s largest shareholder, Lion Selection Group Limited (Lion),
supports the Offer and, in the absence of a higher offer, has agreed to accept
in respect of 17.8% of Sedimentary. These shares are in addition to the 2.1%
of Sedimentary AuSelect already holds. Details of the agreement with Lion
are attached as Appendix B.
􀂾 A successful Offer will create a larger, more liquid company with a market
value of $164 million (4) which is expected to be attractive to institutional
investors and provide potential for re-rating.
􀂾 The Offer is subject to a 50.1% minimum acceptance condition and certain
other conditions. The conditions are set out in Appendix A.
Notes:
(1) Based on a value of $1.34 for an AuSelect share (being the closing trade on 13 July 2006).
(2) Based on closing share prices and VWAPs at 13 July 2006.
(3) AuSelect’s NTA is 152.2¢ per share before tax and 142.5¢ per share after tax. See details of AuSelect’s NTA on
page 4 of this announcement.
(4) Based on AuSelect’s pre tax NTA plus Sedimentary valued on the basis of the Offer terms, as at 13 July 2006.