Babcock & Brown > Investor Information

Proposal for BEI

On 14 November 2007 Babcock & Brown announced a proposal to acquire Babcock & Brown Environmental Investments Limited (ASX: BEI) through a wholly owned subsidiary ("Offer"). The form of the proposal will be discussed further with BEI and may involve a BEI scheme of arrangement or an offer for BEI shares.

Babcock & Brown intends that the Offer would provide BEI shareholders with either one Babcock & Brown Subordinated Note for every 200 BEI shares held or a cash alternative of $0.50 for each share in BEI.

Based on $101.55, the closing price of Babcock & Brown Subordinated Notes on 13 November 2007, the Offer is valued at $0.508 per BEI share, which represents a premium of approximately 34% above $0.38, the closing price of BEI on 9 November 2007, the last day of trading prior to the trading halt requested by BEI.

Babcock & Brown Subordinated Notes (ASX: BNBG) are listed on the Australian Securities Exchange, and currently pay an interest rate (on their $100 face value) equal to the Australian six month bank bill swap rate plus a margin of 2.20% per annum. Further information on BNBG can be found by clicking here.

The cash price of $0.50 is a premium of approximately 31% above $0.38, the closing price of BEI on 9 November 2007, the last day ot trading prior to the trading halt requested by BEI, and approximately 6% higher than the $0.47 closing price of BEI on 22 November 2007.

Babcock & Brown declared its bid unconditional on 7 April 2008. The takeover bid is scheduled to close on 18 April 2008.

If BEI shareholders have any questions in relation to the proposal, they should contact Link Market Services on 1800 206 847 or +61 2 8280 7219.

Further information can be found on the ASX announcements accessible below.

Babcock & Brown Offer for Babcock & Brown Environmental Investments - Q&A

What is the Offer?
Babcock & Brown intends to offer BEI shareholders either 1 Babcock & Brown Subordinated Note (BBSN) for every 200 BEI shares held or a cash alternative of $0.50 for each share in BEI.

What is the value of the Offer?
BBSN Alternative
Based on $101.55, the closing price of BBSNs prior to announcement of the Proposal, the value of the consideration is $0.508 for each BEI share. This represents a premium of 33.6% to the closing share price of BEI prior to announcement of the Proposal.

Cash Alternative
The cash price of $0.50 is a premium of approximately 31% above $0.38, the closing price of BEI on 9 November 2007, the last day of trading prior to the trading halt requested by BEI, and approximately 6% higher than the $0.47 closing price of BEI on 22 November 2007.

How many BBSN's are being issued?
The total number of BBSN securities that may be issued to BEI shareholders (other than Babcock & Brown) is approximately 465,000. The offer consideration values all of BEI's shares on issue at approximately $68 million, and the BEI shares not held by Babcock & Brown at $47 million.

What will happen to BEI shareholders who have less than 200 BEI shares or who only receive a handful of BBSN securities?
BEI shareholders who have less than 200 BEI shares or who do not wish to receive BBSN securities can elect to receive cash for their BEI shares

Will the offer be made to overseas BEI shareholders?
The final offer will contain customary procedures for overseas shareholders.