news : merger talks confirmed

The following article was released today on the NZ Stock Exchange:

PMN
12/10/2006
MERGER

REL: 0954 HRS Promina Group Limited

MERGER: PMN: Promina confirms proposal from Suncorp

Promina confirms proposal from Suncorp

Promina confirms proposal from SuncorpPromina Group Limited (Promina) has
been asked by the Australian Stock Exchange to
respond to market speculation yesterday regarding a potential merger proposal
fromSuncorp Metway Limited (Suncorp) for the company.

Promina confirms that it has received a proposal from Suncorp to acquire all
the ordinary shares of the company. The proposal offers 0.2618 Suncorp shares
and A$1.80 cash per Promina share. The proposal is conditional and would be
intended to be implemented via a Promina Board-recommended scheme of
arrangement.Promina's Board of Directors has indicated to Suncorp that it is
favourably disposed to the proposal, is further evaluating the overall
transaction and has agreed with Suncorp to engage in order to reach a
conclusion on whether the proposal would be in the best interests of Promina
shareholders. This evaluation process will include undertakingsatisfactory
completion of commercial mutual due diligence and the negotiation of an
acceptable Merger Implementation Agreement (MIA). Completion of any merger
will be subject to a number of conditions, including ACCC, APRA and other
regulatory considerations in Australia and New Zealand.

Promina is not planning to make a further public announcement until the
discussions and evaluations are completed and announcement of a formal merger
can occur, or alternatively, until discussions have been terminated between
the two parties.
Promina has retained Goldman Sachs JBWere and Macquarie Bank Limited as
financialadvisers and Freehills as legal adviser.

For further information Media and Investors contact:
Luke Oxenham Alexander Drake
General Manager, Corporate Affairs Manager
Investor Relations and Corporate Affairs
Phone: +61 (0)2 9978 2776 Phone: +61 (0)2 9978 9177
Mobile: +61 (0)413 871 056 Mobile: +61 (0)407 701 495

About Promina Group
Promina Group is a portfolio of specialised and focused general insurance and
selected financial services businesses featuring well-known brands such as
AAMI, Vero, Shannons, Tyndall, Asteron, AA Insurance andAustralian Pensioners
Insurance Agency (APIA).

Promina Group Limited is listed on the Australian and New Zealand Stock
Exchanges. It employs over 7,200 people in 210 offices across Australia and
New Zealand, and traces its operations back to 1833 in Australia and 1878 in
New Zealand.
www.promina.com.au / www.promina.co.nzUnless otherwise stated, all references
to "$" are to Australian dollars. The information in this Release is for
general information only. To the extent that the information may
constituteforward-looking statements, the information reflects Promina's
current views at the date of this Release and issubject to known and unknown
risks and uncertainties, many of which are beyond Promina's control, that
maycause actual results to differ materially from those expressed or implied.
Promina undertakes no obligation to
update any forward-looking statement to reflect events or circumstances after
the date of this Release (subject to
stock exchange disclosure requirements). The information is also not
financial product advice. Investors should seek appropriate advice based on
their own objectives, financial situation and needs.
Promina Group Limited ABN 79 000 746 092


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