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7th November 2003
Dear Lemvest Shareholder,
On behalf of Lemarne Corporation Limited (Lemarne), the directors are pleased to make the
Offer in the terms announced to ASX on 15 October, 2003 to acquire all of your shares in
Lemvest Limited (Lemvest).
Lemarne’s Offer is 6 fully paid ordinary shares in Lemarne for every 5 fully paid
ordinary shares held by you in Lemvest.
Lemvest is already a controlled entity of Lemarne. The Lemvest board is comprised entirely of
directors who are also on the Lemarne board. Lemarne holds 61.93% of the issued capital of
Lemvest and the directors of Lemarne and their controlled entities hold another 7.3%, bringing
the total to 69.23%. All of the Lemarne directors intend to accept the Offer for their own
Lemvest shareholdings.
The primary reason for making the Offer is to simplify and consolidate the corporate structure
of the Lemarne group. This should result in cost savings and improvements to the equity and
debt raising capacities of the group. A more streamlined group should then be in a better
position to fund future growth opportunities and participate in larger projects.
Apart from the benefits of a more simplified corporate structure, the Lemarne directors
consider there are other advantages for those Lemvest shareholders who accept the Offer and
become Lemarne shareholders, namely:
- The ability to receive fully franked dividends. Lemvest does not have a history of
regular fully franked dividend payments, with the latest dividend only franked to 27%.
Lemvest has presently no franking credits available for distribution and a limited ability
to generate any in the short term. In contrast, Lemarne currently has over $6 million in its
franking account and a long history of paying fully franked dividends.
- The consolidated group will be a more attractive listed entity to new investors due to
its more open share register, lack of a dominant parent entity and the potential for
increased market liquidity.
- The consolidated group will have a broader earnings base. While retaining an indirect
interest in Lemvest, those shareholders who accept the Offer will have access to Pacific
Composites’ earnings and growth prospects.
- If the Offer is successful, Lemvest shareholders may be eligible to receive scrip for
scrip capital gains tax rollover relief on the disposal of their Lemvest shares.
Lemarne directors believe the Offer is attractively priced. Importantly, the independent
expert commissioned by Lemvest to report on the Offer, Pitcher Partners Corporate Pty Ltd, has
concluded that the Offer is fair and reasonable.
I encourage you to read the documentation accompanying this letter for details about the
Offer, its terms and advantages. Lemarne directors believe that the Offer is demonstrably fair
and reasonable and in the best interests of all Lemvest shareholders.
The Offer is scheduled to close at 6:00 pm (Melbourne time) on 12 December, 2003 unless
extended. A summary of the Offer and how to accept is contained in Section 2 of the
Bidder’s Statement. Brief instructions on how to accept are also contained in the
Acceptance Form which accompanies the Bidder’s Statement.
Please promptly sign and return your Acceptance Form.
You should contact Lemarne’s company secretary, Stephen Mason on (03) 9820 2400 or
your
financial adviser, if you have any questions. I look forward to welcoming you as a Lemarne
shareholder.
Yours sincerely,
BRIAN NOXON
Chairman
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