31.08.2007

Coates abandons sale

Coates Hire has announced that it will not be selling the company after closing its strategic review. It says that all of the bids it received undervalued the company and failed to offer any significant synergy opportunities.

As a result it will continue to trade as a publicly quoted company. Its 2007 results show revenues up 7.7 percent to A$770 million ($630/£312 million) while gross margins edged up 3.6 percent while Net profit after tax climbed over nine percent to A$102 million ($83/£41 million)

Bill Cutbush, Coates chairman in a letter to shareholders said:
“The Board has unanimously determined that the proposals received from interested third parties are not of an appropriate value to justify recommendation by the Board. Accordingly, they have failed on price.

Similarly they do not reflect any appropriate synergy benefits that would be available, particularly
considering Coates’ leading market position and strong geographical footprint.

The Board considers that shareholder value will be better served by the Company turning its full attention to value enhancing strategies and the pursuit of a number of strategic initiatives building on the successful re-structuring of the business in fiscal 2007.

The Review has reaffirmed the Board’s positive outlook for the Company due to the macroeconomic outlook, Coates’ strong competitive position and opportunities identified to further enhance the business.

The Board is conscious of the fact that the offers received were reflective of the deterioration in the global debt markets and uncertainty in the equity markets. The Strategic Review has now concluded.

However, as always, should the Board receive any future credible offers, they will be given due and thorough consideration if that is in the best interest of shareholders.”