Tranz Rail Board Gives Recommendation

Tranz Rail Board Gives Recommendation

Auckland, New Zealand - Tranz Rail Holdings Limited [NZX: TRH]

The board of Tranz Rail today confirmed they have received the Grant Samuel and Associates appraisal of the Toll Group (NZ) Limited offer.

The full underlying value of Tranz Rails shares, as the company currently stands without the Crown proposal in place, according to the Grant Samuel's report is in the range of $0.67 to $0.86 per share. This value is for 100% of Tranz Rail and includes a premium for control.

Grant Samuel has determined that Tolls offer at 95 cents a share is fair.

They assess that if the Crown proposal were to be accepted by shareholders the value of Tranz Rails shares would be in the range of $0.97 to $1.03 per share. However Grant Samuel goes on to say that, "Given the significant negotiations that are yet to be concluded between Tranz Rail and the Crown, and the uncertain financial outcomes of the Track Access Charge, it is not possible at this time to say the Crown Proposal will provide a better outcome than selling to Toll."

The directors of Tranz Rail recommend that Tranz Rail shareholders do not accept the Offer from Toll Group (NZ) until certain conditions to the Offer are waived. These conditions are:

1. The condition relating to Toll's financiers (condition 6.1.2(a)).

2. The condition relating to certification by directors of Tranz Rail's "Interim Report 2002/2003" for the six months ended 31 December 2002 (condition 6.1.4). The directors have previously made it clear that they will not provide the certification required to satisfy this condition.

3. The condition relating to trading (condition 6.1.2(l)).

Until these conditions are waived, the Offer remains highly conditional and uncertain. However, the directors of Tranz Rail recommend to Tranz Rail shareholders that once these conditions have been waived they accept the Offer

For more details on this recommendation, you should read paragraph 14 of the Target Company Statement.

The Grant Samuel appraisal report of the Toll offer will be mailed to shareholders today and the report will be available after being released to the New Zealand Exchange (NZX) on Tranz Rail's Website (www.tranzrail.co.nz).

In the week commencing 14 July, a further detailed independent report on the Crown offer from Grant Samuel together with the notice of the Special Meeting to be held late in July will be mailed to shareholders .

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