OPTUS ANNOUNCES RECOMMENDED CASH OFFER FOR UECOMM

Optus announced today an off-market cash bid for all of the ordinary shares in Uecomm. Optus is offering 40 cents cash per share to shareholders.

The transaction would involve total net consideration offered by Optus of $226.8 million.

Optus has signed an agreement with Alinta under which it has options to acquire up to 20 per cent of Uecomm from Alinta at 32.5 cents per share. Alinta also intends (subject to no higher offer being publicly announced or made to Alinta) to accept Optus' offer for its remaining 46 per cent shareholding.

Peter Shore, Independent Chairman of Uecomm said the Optus offer delivers a substantial premium to Uecomm's current and recently traded share price.

"It is the opinion of the Independent Directors that the Optus offer represents good value for all shareholders. Uecomm's Independent Directors unanimously recommend that Uecomm shareholders accept the Optus offer of 40 cents per share (in the absence of a superior offer)."

Paul O'Sullivan, incoming Optus Chief Executive, said Uecomm is a strong growth company and is a natural complement to Optus' existing businesses.

"We recently announced our intention to drive continued growth and improvement across all lines of business and our bid to acquire Uecomm is another move in that direction.

"Uecomm's network footprint in Sydney, Melbourne, Brisbane and the Gold Coast, its provision of high bandwidth data services, its focus on ethernet technology and its emphasis on serving the corporate mid-market will strengthen Optus' offerings to corporate customers," Mr O'Sullivan said.

"Customers of both companies will benefit from the acquisition through greater focus and an improved range of services at competitive prices. Uecomm's customers are important to us and their services will not be interrupted.

"In the event we are successful in acquiring 100 per cent of Uecomm, we intend to retain Uecomm as a stand-alone channel to focus on mid-sized corporates with 50 to 500 employees.

"We believe the offer represents excellent value to all Uecomm shareholders. And I am pleased that Uecomm's Independent Directors have unanimously recommended that shareholders accept the Optus offer," Mr O'Sullivan said.

For Uecomm's minority shareholders, the Offer Price of 40 cents per share is equivalent to:

• An implied enterprise value to EBITDA multiple of 12.9 times Uecomm's actual reported EBITDA for the year ended 31 December 2003¹; and
• An implied enterprise value to EBITDA multiple of 8.7 times Uecomm's forecast EBITDA for the year ended 31 December 2004².

The bid is subject to a number of conditions including Foreign Investment Review Board approval and the ACCC having no objection.

If all of the conditions of the offer have been fulfilled, Optus will also acquire from Alinta the debt facilities outstanding to Uecomm, drawn to $54 million as at 31 March 2004 at a 15 per cent discount to face value.

Detailed information on Optus' offer will be set out in its bidder's statement which will be lodged with ASIC and the Australian and Singaporean stock exchanges.

Uecomm shareholders should receive a combined bidder's and target's statement within five weeks. The offer will remain open for one month.

Optus will fund the bid from free cash flow.

For more information:
Melissa Favero
Optus Corporate Affairs
Tel: +61 2 9342 5030

¹ Based on actual 2003 EBITDA of $20.2 million sourced from Uecomm 2003 full year results presentation, 521.3 million shares outstanding (includes 509.5 million issued shares, 10.3 million options and 1.5 million performance rights) and net debt of $52.4 million (being the debt outstanding of $54.0 million, accrued interest to 19 May 2004 of $1.7 million and cash at bank of $3.3 million as at 31 March 2004.

² Based on forecast 2004 EBITDA of approx. $30 million sourced from Uecomm 2003 full year results presentation, 521.3 million shares outstanding (includes 509.5 million issued shares, 10.3 million options and 1.5 million performance rights) and net debt of $52.4 million (being the debt outstanding of $54.0 million, accrued interest to 19 May 2004 of $1.7 million and cash at bank of $3.3 million as at 31 March 2004).