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Smorgon fronts up with A$3.00 for Email shares

By Phil Boeyen, ShareChat Business News Editor

Thursday 28th September 2000

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Smorgon Steel is back in the market for Email shares, this time offering A$3.00 cash for all the ordinary shares in the industrial metals and white goods company.

Conditions of the offer include Smorgon acquiring at least 50.1% of ordinary shares, and Email proceeding with a sale of its major appliances business for A$500 million.

Earlier this week Smorgon withdrew an offer which had been rejected by Email and its shareholders, with chairman Graham Smorgon saying his company remained interested but believed fair value to be below A$3.00.

Mr Smorgon says the new cash offer is a 12% premium to Email's weighted average share price since the withdrawal of its previous offer.

"This is a fair offer to Email shareholders. It represents a generous premium to Email's share price prior to the announcement of Smorgon's original offer and its appeal is confirmed by the fall in Email's share price since that offer was withdrawn."

"This proposal effectively allows Email shareholders to benefit from the break-up of the Email conglomerate and provides them with an all-cash payment."

Mr Smorgon says the offer recognises that Email's metals business faces a much tougher outlook due to market conditions and that previous valuations attributed to the major appliances division are clearly unachievable.

Smorgon says it will fund the acquisition using debt facilities.

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