ecorp announce profit, page-9

I too am a shareholder in ECP at a price considerably higher than the 55c Capital Return offer price. I am going to vote NO to this offer for the following reasons:

1. Packer has NEVER deviated from his policy of selling high and buying distressed assets as low as he can (he almost sold PBL for the second time near the top of the market to Telstra). He is at it again this time re ECP

2. The KPMG report recommending the offer is valueless as it was never going to be truly independent. Packer knows (like every politician) that you never commission a report unless you know the outcome beforehand

3. Using back of an envelope calculations ECP has about $150 million cash surplus to its operating requirements. With 704 million shares on issue, ECP could make a capital return to all shareholders (including Packers PBL) of approx 21c per share to eliminate that surplus cash. At the current price of 54c (elevated due to the proposed capital reduction) a capital return of 21c would reduce the price to 33c which is around the average price that ECP has traded at over the last 6 months before the proposed offer. This means that if shareholders approve the offer, they are giving up any prospect of an upside in ECP's suite of businesses which, with the exception of NineMSN (which is expected to be profitable in 2004), all made a profit this half year.

In summary, Packer is doing ECP's other shareholders no favours in this offer. If he succeeds he will have done again what he has consistently done in the past, buy viable distressed assets at below their true value.

Just my opinion, but I will be voting NO!

Regards