21.07.2007

Coates Hire begins bid process

Coates Hire the Australian rental company opened its ‘data room’ this week providing detailed information for prospective buyers.

The process follows the company’s announcement that it is conducting a strategic review to maximize shareholder value. The review has been sparked by a number of approaches from private equity groups.

Archer Capital, Nikko Principal Investments and The Carlyle Group have all been named as possible suitors. There is no guarantee that the company will be sold, at the end of the process Coates, a publicly quoted business may simply decide that shareholders are best served by the status quo.

The following is a letter to shareholders from Coates chairman Bill Cutbush.

Dear Coates Shareholder,

As you may be aware, we announced in May that we were undertaking a Strategic Review, looking at both corporate and operational strategies, with the aim of maximising value for all shareholders. This review followed the receipt of a number of preliminary approaches from interested parties including private equity firms.

The Board announced an update on the Strategic Review on 28 June.
In summary, the Board is encouraged by the strategic work undertaken by its advisers which has led it to believe there are significant improvements which can be made in the on-going business of Coates. As a result the Board is continuing the assessment of these potential initiatives.

At the same time, the Board feels that a formal assessment of indicative proposals from third parties by means of a due diligence process will give it a clearer understanding of the value of available offers. The process will commence on 16 July with the opening of a data room and is expected to run for approximately four weeks.

The decision to open the data room does not signal a preference to sell the Company and the Board cautions that there is no assurance that this process will result in the acquisition of the Company by an external party.

As I am sure you will appreciate, the Board’s primary concern in this process is to ensure we act in the best interests of the shareholders. We are expediting both the due diligence process and the assessment of potential initiatives, so that we will be able to compare the prospective value outcomes from both options before making a formal recommendation.

We will continue to communicate with you in a consistent and timely fashion and advise you of our decision once the process has been concluded. A full copy of the 28 June announcement and all other Coates announcements are available on the Coates website,

Bill Cutbush
Chairman