Ann: OFFER REJECTED, UPDATED GUIDANCE , page-3

Hi All,

I thought I'd give it a couple of days before I started waffling again.

I could probably guess that a few of you are pretty happy with this situation. Offer - Rejection - Strong FY11 Guidance.

I just thought I'd write to you and give you a quick update on today's newspaper articles relating to AEC, I've just pulled out some points.

The West Aust: Vivenne Ryan
"From a Campbell shareholder perspective its is a terrific opportunity, it is going to deliver terrific value for them", Ammtec managing director Rod Smith said "For Ammtec shareholders it is not going to deliver them the value we will deliver them next year if we are operating on our own"

CPB is yet to lodge its bidder's statement with the ASX and could not be contacted yesterday.

Dominic Rose from Fosters stockbroking said "Ammtec's new profit guidance changed the playing field for the bid, as long as it was achievable". "The forecasts do look optimistic as they imply a lot of growth, but that's not to say they cant achieve them, its a very attractive business which has been resilient, it is unique and it makes sense for CPB to own it.


Financial Review:
1st Article:
Ammtec rejected the advance from its larger rival as it believes the cash offer price of $3.35 a share fails to recognise its potential earnings recovery and the strategic value of its business.

Based on AEC's 2010-2011 guidance, the offer price values the company at just over 6 times EBITDA, with the stock trading on a P/E of 7.

2nd Article:
It's difficult to ignore the possibility of another party entering the bidding for metallurgical and mineral testing consultancy Ammtec.

Despite the rejection, CPB proposal is sure to have drawn interest from its main rivals in the global industrial testing arena, SGS and Bureau Veritas. Both SGS and Bureau Veritas own metallurgical testing divisions, but they are not as significant as Ammtec's and neither would be keen for CPB to steal a march on them in that arena.

Ammtec directors believe the more relevant multiple is financial year 2011 forecast EBITDA, as its main markets were depressed for this year and signs of improvement are on the horizon.

Ammtec's share register is made up predominantly of long-term retail shareholders, Perpetual is the company's largest with 6.64% with Milton Corp next with 2.01%, while employees and relatives speak for 12% of the stock.


The Australian: Micahel Bennet
CPB advised by JP Morgan, is understood not to have sought out AEC adviser Azure Capital to find a price the board would accept.

"The proposed CPB offer reflects neither the value of AEC on a standalone basis nor the enormous strategic benefit our business represents for CPB". Mr Macoboy said.

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Well, even if a counter bid doesnt come through, CPB have now made a floor for it, so thankyou.

As for the AEC boys down the road from me who block the road with all the semi trailers, I promise I wont get angry as long as you hit that FY11 target.

Keep smashing the rocks.

Pep