Methven Shareholders Approve UK Acquisition

Media Release 26 July 2007

Methven Shareholders Approve UK Acquisition

Methven shareholders have voted overwhelmingly to approve the company’s plan to purchase one of the UK’s largest independent tap and showerware suppliers in a move that will see the New Zealand designer, manufacturer and marketer of eco-friendly shower and bathroom products treble its worldwide distribution reach.

The purchase of privately owned Deva Tap Company Ltd (Deva), for an enterprise value of $59 million, and associated funding arrangements were conditional on 75% shareholder support at today’s (26 July) annual meeting in Auckland.

“The acquisition represents a major milestone in enabling us to further leverage our strategic capabilities in design and branding to achieve international scale and increase shareholder value,” Chairman Richard Cutfield told shareholders.

“Deva is a good quality, well managed business and a business we understand well. We are very pleased to have been able to secure a deal and thank you for your support and confidence in our future. The acquisition and fund raising can now proceed.”

The acquisition of Deva which has 6% of the UK brassware market and established trade, merchant and DIY distribution, is to be funded through a combination of a $15 million institutional placement, $12.7 million rights issue, approximately $2.4 million in shares to key senior management of Deva and up to $30 million of long term debt, including existing Deva borrowings.

The institutional placement was successfully completed on 6 July and was close to three times subscribed. In total, 6,818,182 million shares are to be issued in the placement at a price of $2.20 per share.

Rights trading in respect of the 1 for 8 renounceable rights issue will open on 30 July when the investment statement and prospectus is scheduled to be issued and will remain open through to 24 August. The transaction is expected to be completed by 31 August 2007.

Methven which reported another consecutive year of growth in sales, profitability and dividends in 2006-07 expected to achieve a lift in full year earnings in 2007-08 after a softer first half and was determined to maintain its financial track record. Mr Cutfield said.

“My comments on the 2007-08 outlook do not take into account the impact of the acquisition of Deva in the UK which we see as contributing positively to Group earnings in the current year,” he said.

Pro form financial information for shareholders on the acquisition indicates that revenue is expected to increase by an estimated 75% to almost $124 million, with EBITDA also increasing by an estimated 65% to more than $22 million. Earnings per Share are also expected to rise by around 19% on Methven’s 31 March 2007 level.

“Our strategy to sustain profitable growth for shareholders is to take our proprietary branded showerware and other complementary products to world markets. We believe that Deva will provide a robust network to market Methven proprietary products directly into the UK while we will add some Deva products to our Australasian offering,” Mr Cutfield said.

“We are on the verge of an exciting new era and on our way to achieving our vision of being a global company.”

ENDS

For annual meeting presentations and acquisition information please go to:

www.methven.biz

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