Orica increases its offer for Incitec

10th February, 1999

Incitec Independent Directors Conclude Offer is Fair and Reasonable and Intend to Unanimously Recommend Acceptance.

Orica Limited ("Orica") announced that, following discussions today with the Independent Directors of Incitec Ltd ("Incitec"), it will increase its offer for the outstanding shares in Incitec to $6.20 per share.

Orica has declared its offer final. The offer is scheduled to close on Tuesday, 2 March 1999.

Orica has also declared its offer free from all conditions. This means that shareholders who accept Orica’s revised offer, including those who have already accepted, will be guaranteed payment of $6.20 per share. Shareholders accepting Orica’s offer will not incur any stamp duty or brokerage fees.

The revised offer of $6.20 per share represents:

• a multiple of approximately 21 times Incitec’s 1998 earnings per share ("EPS") and 18 times Incitec’s 1999 forecast EPS;
• a premium of approximately 39% over Incitec’s share price one week prior to the announcement of Orica’s offer; and
• a significant premium over the highest price at which Incitec shares have traded since the announcement of Orica’s bid.

Orica has been informed by the Independent Directors of Incitec that they have concluded that the revised offer is fair and reasonable and intend to unanimously recommend that shareholders accept. Mr David Trebeck, the only Independent Director who owns Incitec shares, has advised Orica that he intends to accept Orica’s revised offer in respect of his Incitec shares.

Orica’s Managing Director and CEO Philip Weickhardt said:

"I am pleased that we have been able to arrive at an offer price acceptable to both Incitec and Orica and encourage shareholders to accept before the scheduled closing date of 2 March."

"We have removed all conditions from our offer and, as a result, shareholders are now certain of receiving $6.20 without stamp duty or brokerage if they accept before the close. We can now look forward to being able to fully integrate the Incitec and Orica organisations. "

"Moving to 100% ownership of Incitec is in the interests of both companies and will enable us to totally focus both Incitec and Orica on pursuing our agreed strategy. The acquisition is expected to be EPS neutral pre-abnormals in 1999 and EPS positive in 2000. "

"This outcome now provides clarity and certainty to shareholders and employees of both Incitec and Orica. The strong working relationship we already enjoy gives us an excellent foundation on which to build."

Orica’s offer is scheduled to close on Tuesday, 2 March.