Melrose PLC to buy Elster Group SE

The transaction is expected to close in the third quarter of 2012

Essen, Germany, June 30, 2012 — Elster Group SE entered into an agreement in which a unit of Melrose PLC would acquire all outstanding shares of Elster, representing an aggregate value of about $2.3 billion.

The Elster board has unanimously approved the transaction. Elster has been informed by its largest shareholder, Rembrandt Holdings S.A., that Rembrandt has agreed to tender the 17,412,069 shares owned by it and the 531,025 ADSs owned by its unit (collectively representing about 62 percent of the outstanding share capital of Elster) into the offer.

The transaction is expected to close in the third quarter of 2012.

The ADS offer price represents a 48.6 percent premium over the closing price on June 11, the last day prior to press speculation that Rembrandt was considering a sale of its Elster holding, and a 45.6 percent premium over the one-month volume weighted average price per ADS as of the same date.

The transaction will be funded by a fully underwritten rights issue by Melrose that is expected to raise about $1.8 billion as well as by an acquisition tranche of $0.39 billion under a new term and revolving credit facility of Melrose.

The closing of the tender offer is conditional, among other things, on holders of Shares and ADSs tendering at least 75 percent of the outstanding share capital of Elster, approval of the acquisition of Elster by the shareholders of Melrose at a general meeting, admission of the Melrose rights issue shares to the premium segment of the UK Financial Services Authority's Official List and to trading on the main market of the London Stock Exchange, and clearances by relevant regulatory authorities.

Following the closing of the tender offer, Elster expects to continue operating as an independent business with an administrative board that reflects the new ownership structure post completion of the tender offer and with Melrose chief executive Simon Peckham and current Elster chief legal officer Thomas Preute as managing directors. Following the closing of the tender offer, Beresford-Wylie and Elster chief financial officer Rainer Beaujean plan to pursue other opportunities outside of the company, and Melrose CFO Geoff Martin will serve as CFO of Elster.

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