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Australian Wealth Management Acquires a Majority Interest in Ord Minnett

May 12, 2008

Sydney, May 12, 2008 - Australian Wealth Management Limited (AWM) gains control of one of Australia's best known and highly respected wealth management firms and forms a distribution partnership with global financial services leader JPMorgan.

Key Highlights Overview of the Transaction

• AWM has acquired 70 per cent of the Ord Minnett Group in exchange for the issue of 47.6 million new AWM shares. JPMorgan retains its existing 30 per cent holding.
• Ord Minnett is one of Australia's most prestigious wealth management firms, with a high-net-worth private client base and a national advisor network.
• A strategic bolt-on acquisition that is consistent with AWM's stated strategy of expanding its distribution network and providing cross-sell opportunities across existing businesses.
• Ord Minnett delivers to AWM significant further scale in distribution, client advisors and Funds Under Management and Advice.
• Ord Minnett will operate as a stand alone business, with the existing management team and Chairman remaining in place. Chris Kelaher and Ian Griffiths from AWM will join the Ord Minnett board.
• JPMorgan has extended its long-term product distribution and research partnership with Ord Minnett and AWM.
• The acquisition is expected to be EPS accretive for AWM (pre-amortisation of intangibles).
• AWM will continue to grow their existing Bridges Financial Services and broking groups separately.
• The transaction confirms AWM as the leading consolidator in Australia's wealth management industry and fully underlines its model of building diverse distribution streams over its existing owned platforms.

Australian Wealth Management Limited ("AWM") today announced it has agreed to acquire 70 per cent of the Ord Minnett Group from the Ord Minnett Staff Trust and directors of Ord Minnett in exchange for 47.6 million new AWM shares.

The new AWM shares will be escrowed over a three year period, with one third of the shares vesting each year. The holders of these new AWM shares will not be eligible to receive any dividend that may be declared for the 2008 financial year.

The transaction implies a value for 100 per cent of Ord Minnett of approximately $120 million (based on the closing price for AWM shares traded on 9 May of $1.75 per share) and includes approximately $25 million of net cash held by Ord Minnett. This represents a multiple of approximately 11 times expected FY 2008 NPAT inclusive of cash.

The acquisition is expected to be earnings per share (EPS) accretive for AWM (pre amortisation of intangibles). The consideration represents less than eight per cent of AWM's post acquisition issued capital.

The parties are targeting completion of the transaction in early June 2008.

Overview of Ord Minnett

With a history spanning almost 150 years, Ord Minnett is a leading Australian wealth management group incorporating full-service stockbroking, financial planning, portfolio services, funds management and equity capital markets services.

Ord Minnett employs approximately 350 staff, including approximately 170 client advisors in 13 offices located throughout Australia.

Ord Minnett advises on over $15 billion of client funds across its Sponsored CHESS holdings, PARS portfolio services, monies in its cash management trust, Ord Minnett managed funds and external platform.

Strategic Benefits

Ord Minnett represents a strategic bolt on acquisition for AWM that is expected to be EPS accretive (pre amortisation of intangible assets).

AWM is also expected to benefit from:

• Significant further scale in distribution through Ord Minnett's highly regarded national network of approximately 170 private client advisors. This will be complementary to and enhance AWM's existing distribution available through the Bridges business;
• an increase in its client base of high net worth private clients;
• a material increase in FUMA with significant growth potential;
• revenue growth opportunities between Ord Minnett and AWM, including the potential availability of AWM products to Ord Minnett clients;
• the long-term distribution and research partnership with JPMorgan, a global leader in financial services, including access to JPMorgan originated ECM transactions and JPMorgan's leading research and retail structured product capabilities; and
• additional management and staff expertise.

Strategy for Ord Minnett

Ord Minnett will continue to operate as a stand alone business that is 70 per cent owned by AWM and 30 per cent owned by JPMorgan. The Chairman, Russell Aboud, and the current management team of Ord Minnett will remain in place. Two directors of AWM, Chris Kelaher and Ian Griffiths, will join the board of Ord Minnett. JPMorgan has two board representatives.

It is expected that revenue and expense synergies will be developed over time.

JPMorgan and AWM have entered into a shareholders agreement regulating their relationship as shareholders in Ord Minnett. This agreement contains, among other provisions, pre-emptive rights provisions in favour of both shareholders and change of control provisions granting each shareholder the right to acquire shares in Ord Minnett held by the other shareholder upon the occurrence of certain change in control events affecting the other shareholder (including, in the case of AWM, events which result in a competitor of JPMorgan controlling AWM).

Statements

AWM Managing Director, Chris Kelaher said, "We are delighted to announce the acquisition of a majority interest in Ord Minnett. Ord Minnett is one of the best known and highly respected names in the Australian wealth management industry with a strong private client advisor network and growing portfolio of funds under management. We believe this acquisition will offer AWM significant opportunities and is consistent with the ongoing convergence of broking and wealth advisor businesses."

Ord Minnett Managing Director, Karl Morris said, "We are delighted to be joining AWM. Ord Minnett has grown strongly over recent years focusing on our assets under management and building on our long and proud history servicing the wealth management needs of our clients. AWM and JPMorgan are the ideal partners to help us continue this growth and offer all of our clients the best possible wealth management services, investment products and research."

JPMorgan Australia Chief Executive Officer, Rob Priestley said, "Continually expanding and diversifying our distribution capabilities remains a strategic priority for JPMorgan. AWM and Ord Minnett form a powerful combination to distribute our suite of products and services in Australia. We are delighted to be continuing our long-standing and successful relationship with Ord Minnett and taking the first step in a strategic alliance with AWM."

AWM is being advised by Grant Samuel and Blake Dawson.

About Australian Wealth Management

AWM is an integrated financial services company with a suite of products and services designed to accompany clients from the wealth accumulation phase, into retirement and across to the next generation.

Nationally, AWM has 780 staff, servicing clients with their wealth management needs. As at 31 December 2007, AWM had Funds Under Management, Administration, Advice and Supervision of $67.8 billion.

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