Acquisition of Transport Investments Limited business

8246814_1





17 November 2017

NZX Market Announcement

Special Meeting – Acquisition of Transport Investments Limited business

Bethunes Investments Limited (NZX: BIL) (Bethunes) is pleased to confirm that it will hold a Special Meeting
of shareholders on 5 December 2017 at the offices of Link Market Services Limited, Level 11 Deloitte Centre,
80 Queen Street, Auckland, starting at 9 am.

At the meeting, shareholders will be asked to consider, and if thought fit, to pass resolutions approving the
acquisition of the business of Transport Investments Limited and related transactions. Accompanying this
announcement are:

 The Notice of Meeting
 A Listing Profile detailing the transport and logistics business of Transport Investments Limited
 An Independent Report on the transactions by Grant Samuel & Associates Limited
 An Appendix 7 form for an intended consolidation of Bethunes shares
 An Appendix 7 form for the intended distribution of BIL 2016 Limited shares to Bethunes
shareholders

The Board considers that completing the Transactions will add value for Bethunes shareholders as it
presents them with the opportunity to own a shareholding interest in the transport and logistics business of
Transport Investments Limited following the acquisition of that business by Bethunes, while also retaining
their interest in the business and assets of Bethunes via BIL 2016 Limited. Accordingly, the Board
unanimously recommends that shareholders vote in favour of the resolutions in the Notice of Meeting.

In Grant Samuel’s opinion:
1


Based on the analysis of the merits outlined above, the terms of the Proposed Transaction are fair
and reasonable to the shareholders of Bethunes not associated with TIL and TIL Logistics Group
Limited and the Proposed Transaction is in the best interests of Bethunes given the options
reasonably available to Bethunes at the current time.

Shareholders are encouraged to read the Independent Report by Grant Samuel in full in determining their
voting decision.

Website Information

As referred to in the Listing Profile, additional information on the business and assets of Transport
Investments Limited, including historic financial information is available on the Bethunes website at
www.bethunesinvestments.com.



1
Page 40, Bethunes Investments Limited Independent Adviser’s and Independent Appraisal Report, Grant Samuel & Associates Limited.

8246814_1 2
New BIL Distribution

On the basis that the resolutions are passed, the record date for the in-specie distribution of Bethunes’
shares in BIL 2016 Limited to Bethunes’ existing shareholders (on a pro rata basis) will be 5 pm on 1
December 2017. The distribution is intended to be completed on 5 December 2017. Further details of the
distribution are set out in the Appendix 7 form attached.

As is discussed in the Notice of Meeting, it is intended that BIL 2016 Limited will apply to compliance list on
the NZX Main Board Market in the first quarter of 2018 and will continue to pursue its acquisition and
investment strategy

Share Consolidation

On the basis that the resolutions are passed, Bethunes will consolidate its ordinary shares on the basis that
every 254.1915 shares will become 1 share. The record date for the consolidation is 5 December 2017 and
the consolidation will be applied pre-market open on 6 December 2017. Further details of the consolidation
are set out in the Appendix 7 form attached.

Name and Ticker Code Change

Subject to the Transactions being approved by shareholders, Bethunes will change its name to TIL Logistics
Group Limited and its ticker code will change to TLL.

The change in both name and ticker code are intended to apply from the commencement of trading on NZX
on 7 December 2017.

ENDS

For further information and media assistance, please contact:

Bethunes Investments Limited Transport Investments Limited
Christopher Swasbrook Jackie Ellis, Media Liaison
Phone: +64 21 928 262 Phone: + 64 27 246 2505
Email: chris.swasbrook@bethunesinvestments.com Email: jackie@ellisandco.co.nz


About Transport Investments Limited (TIL)
TIL is one of the largest domestic freight and logistics businesses in New Zealand, with a nationwide network
of branches, depots and warehouses. TIL’s activities include transporting and warehousing freight
throughout New Zealand and co-ordinating freight movements offshore with the assistance of international
alliances. TIL also has a specialist road tanker division which is one of the largest operators in the New
Zealand fuel delivery market by road tanker.

---

APPENDIX 7 – NZSX Listing Rules
Number of pages including this one
(Please provide any other relevant
NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10. details on additional pages)
For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required.
Full name
of Issuer
Name of officer authorised to
Authority for event,
make this notice
e.g. Directors' resolution
Contact phone
Contact fax
numbernumberDate
Nature of event
BonusIf ticked,Rights Issue
Tick as appropriateIssuestate whether:Taxable/ Non TaxableConversionInterestRenouncable
Rights IssueCapitalCallDividend
If ticked, stateFull
non-renouncable
change
X
whether:
InterimYearSpecialDRP Applies
EXISTING securities affected by this
If more than one security is affected by the event, use a separate form.
Description of theISIN
class of securities
If unknown, contact NZX
Details of securities issued pursuant to this eventIf more than one class of security is to be issued, use a separate form for each class.
Description of theISIN
class of securities
If unknown, contact NZX
Number of Securities toMinimum
Ratio, e.g
be issued following eventEntitlement
1 for 2 for
Conversion, Maturity, Call
Treatment of Fractions
Payable or Exercise Date
Tick if
provide an
pari passu
ORexplanation
Strike price per security for any issue in lieu or date
of the
Strike Price available.
ranking
Monies Associated with Event
Dividend payable, Call payable, Exercise price, Conversion price, Redemption price, Application money.
Source of
Amount per securityPayment
(does not include any excluded income)
Excluded income per security
(only applicable to listed PIEs)
SupplementaryAmount per security
Currencydividendin dollars and cents
details -
NZSX Listing Rule 7.12.7
Total monies
TaxationAmount per Security in Dollars and cents to six decimal places
In the case of a taxable bonusResident
Imputation Credits
issue state strike priceWithholding Tax(Give details)
Foreign
FDP Credits
Withholding Tax(Give details)
Timing
(Refer Appendix 8 in the NZSX Listing Rules)
Record Date 5pmApplication Date
For calculation of entitlements -Also, Call Payable, Dividend /
Interest Payable, Exercise Date,
Conversion Date.
Notice DateAllotment Date
Entitlement letters, call notices,For the issue of new securities.
conversion notices mailedMust be within 5 business days
of application closing date.
OFFICE USE ONLY
Ex Date:
Commence Quoting Rights:Security Code:
Cease Quoting Rights 5pm:
Commence Quoting New Securities:Security Code:
Cease Quoting Old Security 5pm:
5 December, 2017N/A
N/A6 December, 2017
$$
$
Date Payable
N/ARounded up to nearest whole number
Enter N/A if not
applicable
X
N/A
Consolidation of ordinary sharesNZMOWE0001S5
In dollars and cents
N/A
254.1915
021 928 26204 499 328017112017
N/AN/A
1
Ordinary sharesNZMOWE0001S5
EMAIL: announce@nzx.com
Notice of event affecting securities
Bethunes Investments Limited
Chris SwasbrookDirectors' resolution

---

APPENDIX 7 – NZSX Listing Rules
Number of pages including this one
(Please provide any other relevant
NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10. details on additional pages)
For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required.
Full name
of Issuer
Name of officer authorised to
Authority for event,
make this notice
e.g. Directors' resolution
Contact phone
Contact fax
numbernumberDate
Nature of event
BonusIf ticked,Rights Issue
Tick as appropriateIssuestate whether:Taxable/ Non TaxableConversionInterestRenouncable
Rights IssueCapitalCallDividend
If ticked, stateFull
non-renouncable
change
X
whether:
InterimYearSpecialDRP Applies
EXISTING securities affected by this
If more than one security is affected by the event, use a separate form.
Description of theISIN
class of securities
If unknown, contact NZX
Details of securities issued pursuant to this eventIf more than one class of security is to be issued, use a separate form for each class.
Description of theISIN
class of securities
If unknown, contact NZX
Number of Securities toMinimum
Ratio, e.g
be issued following eventEntitlement
1 for 2 for
Conversion, Maturity, Call
Treatment of Fractions
Payable or Exercise Date
Tick if
provide an
pari passu
ORexplanation
Strike price per security for any issue in lieu or date
of the
Strike Price available.
ranking
Monies Associated with Event
Dividend payable, Call payable, Exercise price, Conversion price, Redemption price, Application money.
Source of
Amount per securityPayment
(does not include any excluded income)
Excluded income per security
(only applicable to listed PIEs)
SupplementaryAmount per security
Currencydividendin dollars and cents
details -
NZSX Listing Rule 7.12.7
Total monies
TaxationAmount per Security in Dollars and cents to six decimal places
In the case of a taxable bonusResident
Imputation Credits
issue state strike priceWithholding Tax(Give details)
Foreign
FDP Credits
Withholding Tax(Give details)
Timing
(Refer Appendix 8 in the NZSX Listing Rules)
Record Date 5pmApplication Date
For calculation of entitlements -Also, Call Payable, Dividend /
Interest Payable, Exercise Date,
Conversion Date.
Notice DateAllotment Date
Entitlement letters, call notices,For the issue of new securities.
conversion notices mailedMust be within 5 business days
of application closing date.
OFFICE USE ONLY
Ex Date:
Commence Quoting Rights:Security Code:
Cease Quoting Rights 5pm:
Commence Quoting New Securities:Security Code:
Cease Quoting Old Security 5pm:
EMAIL: announce@nzx.com
Notice of event affecting securities
BETHUNES INVESTMENTS LIMITED
Chris SwasbrookDirectors' resolution
021 928 26204 499 330817112017
115060279N/A1
1
Ordinary Shares NZMOWE0001S5
Distribution of ordinary shares in BIL 2016 LimitedN/A - Unlisted
In dollars and cents
N/AN/A
Enter N/A if not
applicable
X
$$
$
Nil
Date Payable
1 December, 2017N/A
N/A5 December, 2017

---

BETHUNES INVESTMENTS LIMITED
INDEPENDENT ADVISER’S AND INDEPENDENT APPRAISAL REPORT

Grant Samuel confirms that it:

§ has no conflict of interest that could affect its ability to provide an unbiased report; and
§ has no direct or indirect pecuniary or other interest in the proposed transaction considered in this report, including any
success or contingency fee or remuneration, other than to receive the cash fee for providing this report.

Grant Samuel has satisfied the Takeovers Panel, on the basis of the material provided to the Panel, that it is independent under the
Takeovers Code for the purposes of preparing this report.


GRANT SAMUEL & ASSOCIATES LIMITED

NOVEMBER 2017

Bethunes Investments Limited,
Wellington, New Zealand
info@bethunesinvestments.co.nz
admin@bethunesinvestments.co.nz
www.bethunesinvestments.com

2
TABLE OF CONTENTS
1 EXECUTIVE SUMMARY __________________________________________________________________ 4
2 OVERVIEW OF THE PROPOSED ACQUISITION OF TIL’S BUSINESS AND ASSETS AND RELATED TRANSACTIONS
2.1 Background ______________________________________________________________________ 5
2.2 TIL, Global and Kern Entities _________________________________________________________ 6
2.3 Details of the Proposed Acquisition and Related Transactions ______________________________ 6
2.4 Financing of the Proposed Acquisition and Implied Valuation _______________________________ 8
2.5 Potential shareholding outcomes _____________________________________________________ 9
3 SCOPE OF THE REPORT _________________________________________________________________ 12
3.1 Purpose and Scope of the Report ____________________________________________________ 12
3.2 Requirements of the NZX Listing Rules ________________________________________________ 14
3.3 Basis of Evaluation ________________________________________________________________ 15
4 PROFILE OF BETHUNES _________________________________________________________________ 16
4.1 Financial Performance _____________________________________________________________ 17
4.2 Financial Position _________________________________________________________________ 17
4.3 Ownership ______________________________________________________________________ 18
4.4 Share Price Performance ___________________________________________________________ 19
5 OVERVIEW OF THE NEW ZEALAND FREIGHT AND LOGISTICS INDUSTRY __________________________ 20
6 PROFILE OF TIL _______________________________________________________________________ 23
6.1 Background _____________________________________________________________________ 23
6.2 Business Overview ________________________________________________________________ 24
6.3 TIL’s Fleet _______________________________________________________________________ 26
6.4 Growth Strategy __________________________________________________________________ 26
6.5 Financial Performance _____________________________________________________________ 27
6.6 Financial Position _________________________________________________________________ 29
6.7 Cash flow _______________________________________________________________________ 30
7 IMPLIED VALUATION OF TIL _____________________________________________________________ 31
7.1 Adjusted Earnings for Implied Multiples _______________________________________________ 31
7.2 Earnings Multiple Analysis __________________________________________________________ 32
7.3 Conclusion ______________________________________________________________________ 36
8 VALUATION SUMMARY AND CERTIFICATION _______________________________________________ 37
8.1 Valuation for the Purpose of Rule 57 _________________________________________________ 37
8.2 Preferred Methodology ____________________________________________________________ 37
8.3 Earnings Multiples Analysis: ________________________________________________________ 38
8.4 Certification of Fairness and Reasonableness ___________________________________________ 38
9 ASSESSMENT OF THE MERITS OF THE PROPOSED ACQUISITION, PRIVATE PLACEMENT AND TIL IN-SPECIE
DISTRIBUTION _______________________________________________________________________ 39
9.1 Summary _______________________________________________________________________ 39

3
9.2 Merits of the Proposed Acquisition ___________________________________________________ 40
9.3 Merits of the Private Placement _____________________________________________________ 42
9.4 Fairness of the Proposed Transaction for the purposes of the NZX Listing Rules _______________ 43
9.5 Merits of the TIL In-Specie Distribution _______________________________________________ 43
9.6 Merits of the Voluntary Acquisition __________________________________________________ 43
9.7 The Minority Buy Out Rights ________________________________________________________ 44
9.8 An investment in Bethunes _________________________________________________________ 44
9.9 Acceptance or Rejection of the Proposed Acquisition and the Private Placement ______________ 45
Comparable Listed Companies __________________________________________________ 46
Recent Transaction Evidence ___________________________________________________ 51
Valuation Methodology Descriptions _____________________________________________ 56
Capitalisation of Earnings _______________________________________________________________ 56
Discounted Cash Flow _________________________________________________________________ 57
Realisation of Assets __________________________________________________________________ 57
Industry Rules of Thumb _______________________________________________________________ 57
Interpretation of Multiples _____________________________________________________ 58
Qualifications, Declarations and Consents _________________________________________ 59
Qualifications ________________________________________________________________________ 59
Limitations and Reliance on Information ___________________________________________________ 59
Disclaimers __________________________________________________________________________ 60
Independence ________________________________________________________________________ 60
Information _________________________________________________________________________ 60
Declarations _________________________________________________________________________ 61
Consents ____________________________________________________________________________ 61

4
1 Executive Summary
Bethunes shareholders are being asked to vote on a number of resolutions related to transactions involving the
Proposed Acquisition, the Private Placement and the TIL In-Specie Distribution. Bethunes shareholders have
four main options in regard to their voting and subsequent actions. They can either:
§
vote in favour of the resolutions approving the Proposed Acquisition, the Private Placement and TIL In-
Specie Distribution in which case, if the resolutions are approved, Bethunes will become the listing vehicle
for TIL and their existing investment in Bethunes will become an investment in TIL Logistics. Existing
shareholders of Bethunes will hold only 0.56% of the shares of TIL Logistics. However, existing Bethunes
shareholders will also become shareholders in New BIL. New BIL holds the existing assets and liabilities of
Bethunes (other than a $75,000 NZX Bond). If Bethunes shareholders vote in favour of the Proposed
Acquisition, the Private Placement and TIL In-Specie Distribution they will retain a shareholding in TIL
Logistics and retain their proportionate ownership of Bethunes (before the Proposed Acquisition excluding
the $75,000 NZX Bond) via a shareholding in New BIL; or
§
vote against the resolutions regarding the Proposed Acquisition, the Private Placement and TIL In-Specie
distribution in which case, if the resolutions are not approved, Bethunes will continue to be a very small
listed company seeking new investments. There is no certainty regarding if or when new investment
opportunities will arise. Bethunes will continue to incur the costs of operating as a listed company
(including listing fees, audit fees and directors’ fees) and searching and evaluating potential investment
opportunities. In addition, Bethunes will incur approximately $200,000 of transaction costs (almost half of
Bethunes’ net assets) arising from the Proposed Acquisition; or
§
vote in favour of the resolutions approving the Proposed Acquisition, the Private Placement and TIL In-
Specie distribution. If the resolutions are approved, the Bethunes shareholder can then elect to be acquired
by the Dominant Owner under the Voluntary Acquisition at $1.50 per share (on a consolidated basis). Under
this alternative, existing shareholders of Bethunes will receive $1.50 per share under the Voluntary
Acquisition and retain their proportionate ownership of Bethunes (before the Proposed Acquisition
excluding the $75,000 NZX Bond) via a shareholding in New BIL; or
§
vote against the resolutions regarding the Proposed Acquisition and the Private Placement and elect for
their individual shareholding to be acquired by Bethunes under the minority buy out rights provisions
provided for under the Companies Act. Under this alternative, if the resolutions are approved, existing
shareholders of Bethunes will retain their proportionate ownership of Bethunes (before the Proposed
Acquisition excluding the $75,000 NZX Bond) via a shareholding in New BIL and receive the proportionate
ownership of the NZX bond which equates to be $0.0007 per share (pre consolidation) or $0.17 per share
on a consolidated basis.

When considering the options outlined above, Bethunes shareholders should also consider the following:
§
Grant Samuel has assessed the price being paid for TIL Logistics by reference to the multiples implied by
comparable market evidence. The multiples implied by the pricing of the Proposed Acquisition is consistent
with market evidence;
§
this issue price of the Private Placement is consistent with the share valuation being applied to all shares
issued in the transaction;
§
the value the Dominant Owner has determined to acquire the shares in Bethunes is $1.50 per share (on a
consolidated basis). Grant Samuel certifies that, for the purposes of Rule 57 of the Takeovers Code, the
consideration is fair and reasonable. If Bethunes shareholders do not want to participate in the Proposed
Acquisition, they should, in Grant Samuel’s opinion, not exercise their minority buy-out rights and elect to
be acquired by the Dominant Owner under the Voluntary Acquisition; and
§
in Grant Samuel’s opinion, based on the analysis of the merits (see section 9), the terms of the Proposed
Transaction are fair and reasonable to the shareholders of Bethunes not associated with TIL and Global and
the Proposed Transaction is in the best interests of Bethunes given the options reasonably available to
Bethunes at the current time.

A detailed assessment of the merits of the Proposed Acquisition, Private Placement and TIL In-Specie Distribution
is outlined in section 9 of this report.

2

5
2 Overview of the Proposed Acquisition of TIL’s Business and Assets and Related Transactions
2.1 Background
Bethunes Investments Limited (Bethunes) is a shell company listed on the Main Board operated by NZX
Limited (NZX) with net assets of approximately $482,000 as at 30 September 2017, with 115,060,279 shares
on issue and net tangible assets per share of 0.4 cents.

Over the past six months Bethunes has explored options to use its listed status to generate additional value
for shareholders. As a result of this process Bethunes has now entered into an agreement to acquire the
transport and logistics business and assets of Transport Investments Limited (TIL) and all of the shares in
TIL Logistics Group Limited (Global) (together referred to as the Acquired Assets) (the Proposed
Acquisition). The Proposed Acquisition is to be voted on by Bethunes shareholders in December 2017.

Bethunes will acquire the Acquired Assets for $200 million (subject to adjustments for net debt and
movements in working capital), financed through the issue of new shares in Bethunes, a $11.5 million
capital raising and a $90 million debt facility from ASB. Shareholders of Bethunes will retain a shareholding
in the significantly expanded company. The net assets of Bethunes (other than a $75,000 NZX Bond) have
been transferred to a company, BIL 2016 Limited (New BIL) which has plans to undertake a $10 million
capital raise and be listed on the NZX. Immediately prior to the acquisition of the Acquired Assets, Bethunes
will distribute all of the shares of New BIL to the existing shareholders of Bethunes on a pro rata basis.

If the transaction is approved by shareholders of Bethunes, they will own the same economic interest in
New BIL as they did in Bethunes and, in addition, a shareholding in Bethunes (to be renamed TIL Logistics
Group (TIL Logistics)).

The purchase price payable by Bethunes for the TIL business and the Global shares shall be satisfied partly
in cash paid to TIL and partly by the issue of new shares in Bethunes to TIL and to Kern Group (Logistics) Pty
Ltd and Catrina Daly (as trustee of the CGJ Daly Investment Trust) (together referred to as the Kern Entities).

Following the Proposed Acquisition, Bethunes intends for its investment strategy to be continued by New
BIL, which intends to apply to compliance list New BIL on the NZX and then subsequently undertake a $10
million capital raise.

CURRENT BETHUNES COMPANY STRUCTURE



Bethunes
New BIL
Bethunes–Listed on NZX
100% owned
Bethunessubsidiary, that holds the assets of
Bethunesand has no trading operations

6
2.2 TIL, Global and Kern Entities
TIL is one of New Zealand’s largest domestic freight and logistics platforms
1
with a nationwide network of
branches, depots and warehouses. TIL is privately owned and it has approximately 1,700 employees and
contractors and operates from 60 locations across New Zealand. TIL generated pro forma revenue of
approximately $320 million in the financial year ended 30 June 2017. A detailed overview of TIL is provided
in section 6 of this report.

In January 2017, TIL’s directors established Global with a view to Global advising on an initial public offer
(IPO) and listing of TIL and other transport industry operators (with Global being the resultant listed entity).

Global engaged Kern Group Pty Ltd (Kern Group) to provide financial advisory services to it and allotted a
shareholding in Global to the Kern Entities to provide them with a carried interest in the IPO transaction if
it proceeded. It was acknowledged that if an IPO and listing (or similar transaction) completed, the Kern
Group would receive a success fee and carried interest in the listed entity for financial advisory services.

The IPO transaction was discontinued in mid-2017 as the advisors felt the market conditions were not
conducive, in part because of the New Zealand general election and likely resulting market uncertainty. In
August 2017, Global commenced discussions with Bethunes on the Proposed Acquisition.

In order for Bethunes to obtain access to the work undertaken by Kern Group and other advisers for Global
on the IPO transaction (including due diligence reports on the TIL business), under the Proposed Acquisition
Bethunes will acquire the shares in Global along with the business and assets of TIL. Global is a shell
company with no assets or liabilities.

On successful completion of the Proposed Acquisition, and in consideration for the Kern Group providing
financial advisory services to the discontinued IPO transaction, the Proposed Acquisition and Private
Placement (defined below), Kern Group will be paid a cash fee of approximately $1.1 million from Global
and the Kern Entities will receive approximately $9.7 million of Bethunes shares for their shares in Global
under the Sale and Purchase Agreement between Bethunes, TIL and the Kern Entities.

TIL and the Kern Entities have a separate confidential agreement between themselves that allocates the
purchase price under the Sale and Purchase Agreement for the TIL business and the Global Shares between
the parties.

Kern Group and Kern Group (Logistics) Pty Ltd are controlled by Greg Kern (Greg Kern, together with Kern
Group and the Kern Entities, (the Kern Persons)).
2.3 Details of the Proposed Acquisition and Related Transactions
The Proposed Acquisition and related transactions are relatively complex, requiring a number of
transactions, including:
§
the acquisition of the business and assets of TIL and all of the Global shares for an enterprise value of
$200 million (subject to adjustments for net debt and movements in working capital);
§
payment for the TIL business and assets and all of the Global shares by issuing 73.33 million Bethunes
shares to TIL and Global shareholders and $87.8 million in cash to TIL (subject to adjustments for net
debt and movements in working capital);
§
a $90 million acquisition facility from ASB to pay for the TIL business and assets and Global shares;
§
a $11.5 million capital raising, of which $8.65 million will be used to reduce the debt facility (the Private
Placement);
§
an in specie distribution of New BIL shares to existing Bethunes shareholders to ensure the current
shareholders continue to own the current assets and business of Bethunes; and
§
a payment of $200,000 from Bethunes to New BIL as a contribution towards the costs of re-listing.

_______________________________________________________________________________________________________________________________________________________
1
By revenue

7
A summary of the Proposed Acquisition and related transactions is outlined in the diagrams below:

SUMMARY OF THE TRANSFER OF ASSETS TO NEW BIL AND THE NEW BIL IN SPECIE DISTRIBUTION


SUMMARY OF THE PROPOSED ACQUISTION AND RELATED TRANSACTIONS



The acquisition of the Acquired Assets involves a series of related transactions that require the approval of
Bethunes shareholders including:
§
by special resolution as a major transaction under s129 of the Companies Act 1993, and under Listing
Rule 9.1 to:
• acquire the transport and logistics business and assets of TIL and 100% of the shares on issue in
Global;
• enter into facilities and related security arrangements with ASB Bank Limited (ASB) for the
purposes of that acquisition and ongoing working capital requirements; and
• the issue of securities to wholesale investors who have elected to participate in the Private
Placement;
§
by special resolution that the constitution of Bethunes be revoked and Bethunes adopts the constitution
described in the Notice of Meeting; and
§
by ordinary resolution:
• the issue of Bethunes shares to TIL, the Kern Entities and investors participating in the Private
Placement, in terms of Rule 7(d) the Takeovers Code and Listing Rule 7.3.1(a);
• an increase in the directors’ fee pool and payment of one-off director’s fees for services provided
in relation to the transaction to existing Bethunes directors under Listing Rule 3.5.1; and
Bethunes
New BIL
Bethunes–Listed on NZX
Transfer of assets and
liabilities of Bethunes
to New BIL (excluding
NZX Bond)
Existing BIL Shareholders
New BIL shares issued
immediately prior to the
completion of the Proposed
Acquisition
TIL
Global/Kern entities
Bethunes
New BIL
Bethunesshares
issued
Bethunesshares issued
Cash paid to TIL
TIL Business and
Assets
Payment from
Bethunesof $200k
towards re-listing
costs
Global Shares
ASB
Debt funding
to acquire TIL
business and
Global
Equity Providers
Equity
Equity used
to reduce
ASB Loan

8
• the transfer of Bethunes shares to shareholders of TIL on the distribution of those Bethunes shares
by TIL following the Proposed Acquisition, for the purpose of Rule 7(c) of the Takeovers Code.

As the Proposed Acquisition is a major transaction under section 129 of the Companies Act 1993, if existing
Bethunes shareholders do not want to retain a shareholding in Bethunes, they may choose to vote all their
shares against the Proposed Acquisition and elect for their shareholding to be acquired under the minority
buy out rights provisions provided for under the Companies Act 1993 and the provisions of the NZX Listing
Rules.

The Proposed Acquisition is conditional upon the resolutions being passed by Bethunes shareholders. If
the resolutions are passed by Bethunes shareholders, the transaction is expected to be completed in
December 2017 (Completion).
2.4 Financing of the Proposed Acquisition and Implied Valuation
The Proposed Acquisition will be funded by:
§
a debt facility. On 18 October 2017, Bethunes signed a term sheet with ASB, which provides a three
year $90 million committed cash advance facility, a $10 million overdraft facility and a guarantee/bond
facility of $5.8 million to secure future obligations of TIL Logistics (ASB Debt Facilities). At Completion,
$87.8 million of the $105.8 million of available funding under the ASB facilities will be drawn to finance
the cash consideration to be paid to TIL shareholders;
§
a Private Placement of $11.5 million, of which $8.65 million will be used to repay a portion of the ASB
Debt Facilities. The participants in the Private Placement will be issued 7.67 million shares in Bethunes
for $11.5 million of new equity; and
§
the issue of Bethunes shares to TIL and Global shareholders. Prior to the shares being issued, Bethunes
will consolidate the number of shares on issue. The existing Bethunes shareholders will receive 1
Bethunes share for every 254 shares on issue (subject to rounding of individual shareholdings up to a
whole number of shares). The pre acquisition equity value of Bethunes under the Proposed Acquisition
is $0.68 million. This represents the value TIL and Global shareholders place on the investment shell
that will be utilised in the reverse listing. The implied share price following the consolidation of
Bethunes shares is $1.50 per share. To pay for the Acquired Assets, 73.33 million Bethunes shares at
$1.50 per share will be issued.

The implied equity value of Bethunes post acquisition is $122.2 million as summarised in the table below:
IMPLIED SHARE PRICE VALUATION OF BETHUNES POST ACQUISTION (NZ$ MILLIONS)
2


Implied Bethunes value (pre acquisition) 0.7
Enterprise Value of the Acquired Assets 200.0
Implied Enterprise Value of Bethunes (post acquisition) 200.7
ASB Debt Facilities (87.8)
Share of debt in Associates (2.2)
Equity from Private Placement to repay portion of ASB debt and provide capital 11.5
Implied equity value of Bethunes 122.2
Number of shares on issue (millions) 81.5
Implied value per share $1.50


_______________________________________________________________________________________________________________________________________________________
2
Excluding the transaction fees paid, which are included in the purchase price of $200 million.

9
2.5 Potential shareholding outcomes
2.5.1 Proposed Acquisition and Private Placement
The Proposed Acquisition and the Private Placement are a series of related transactions that will result in
TIL and the existing TIL directors and founders (who will participate in the Private Placement either in their
own name of through family trusts) (TIL Principals) owning 87.5%
3
of the shares in Bethunes following
completion of those transactions.

The TIL Principals are:
§
James Ramsay;
§
Greg Whitham;
§
Alan Terris;
§
Kevin Smith; and
§
Larry Stewart.

The major shareholders in TIL are Hooker Bros. Investments Limited and Hooker Bros. (1989) Limited
(together the Hooker entities) and James Ramsay (and associated entities) (the Hooker/Ramsay persons).

TIL has advised that it proposes to distribute some or all of the Bethunes shares it will hold following the
Proposed Acquisition to its shareholders (TIL In-Specie Distribution). The purpose of the TIL In Specie
Distribution is to effect the distribution of shares from TIL to all of the TIL shareholders (including the
Hooker/Ramsay persons). TIL proposes to undertake this distribution during the 12-month period following
completion of the Proposed Acquisition.

The Private Placement will be separated into two or more separate tranches. Tranche 1 will issue 5.33
million shares to raise $8.0 million and take place concurrently with the Proposed Acquisition. Within 5
business days of the completion of the Proposed Acquisition a further 2.34 million shares will be issued in
the remaining tranches.

The following table provides a summary of the shareholding outcomes based on the Proposed Acquisition
and the Private Placement and after the TIL In-Specie Distribution. Following the TIL In-Specie Distribution,
the major shareholders will be the Hooker/Ramsay persons. The table below provides a summary of the
shareholding under the assumption the Hooker entities have been liquidated. This provides a more
accurate description of the actual ownership of TIL Logistics after the Proposed Acquisition and the Private
Placement:

_______________________________________________________________________________________________________________________________________________________
3
This assumes the Employee/Director-Designate Transfer has taken place.

10
POTENTIAL SHAREHOLDING OUTCOMES (THOUSANDS)

STATUS
SHARES ISSUED
AS
CONSIDERATION
SHARES
ISSUED IN
PRIVATE
PLACEMENT
TOTAL
SHAREHOLDING
SHAREHOLDING
%
Ramsay TIL shareholder/Director 13,565 1,333 14,898 18.3%
Whitham
TIL shareholder /TIL CFO
11,350 1,333 12,683 15.6%
Terris
TIL shareholder/TIL Mgt
11,350 1,000 12,350 15.2%
Stewart
TIL shareholder
11,350 667 12,016 14.8%
Smith
TIL shareholder
11,350 667 12,016 14.8%
TIL Minorities
Minority shareholders
7,907 - 7,907 9.7%
Total TIL and TIL Principals 66,870 5,000 71,870 88.2%
Kern Financial advisor/ TIL Director 6,464 333 6,797 8.3%
Shares issued to TIL and Global shareholders and
Private Placement Participants (Tranche 1) 73,333 5,333 78,667 96.6%
Bethunes Bethunes shareholders 453 - 453 0.6%
Shares on issue after the Proposed Acquisition
and Private Placement (Tranche 1) 73,786 5,333 79,119 97.1%
Janes TIL Chairman - 667 667 0.8%
Chan TIL Director - 667 667 0.8%
Others - 1,007 1,007 1.2%
Shares issued to Private Placement Participants –
Remaining Tranches
- 2,340 2,340 2.9%
Total investors 73,786 7,673 81,459 100%

TIL also proposes to transfer approximately 620,000 Bethunes shares in aggregate immediately following
the Proposed Acquisition and the Private Placement (and before the TIL In-Specie Distribution) to:
§
Trevor Janes, Lorraine Witten and Danny Chan, who will be appointed to the Bethunes board following
completion of the Proposed Acquisition, in consideration for the services provided by them to TIL in the
period leading up to the Proposed Acquisition; and
§
approximately 600 long-serving employees and owner-drivers of TIL and its subsidiaries (to be selected
by TIL), by way of an ex-gratia bonus, to mark the coming to market of the TIL business on NZX,

(together the Employee/Director-Designate Transfer).

Following the Employee/Director-Designate Transfers and the TIL In-Specie Distribution and assuming (i)
TIL does not acquire Bethunes shares under Voluntary Acquisition (defined in section 3.1.2 below) and (ii)
TIL does not otherwise sell down any Bethunes shares but distributes all of them under the TIL In-Specie
Distribution, the shareholding of Bethunes is expected to be as follows:

11
POTENTIAL SHAREHOLDING OUTCOMES (THOUSANDS)


SHARES BEFORE THE
EMPLOYEE/DIRECTOR-
DESIGNATE TRANSFERS
EMPLOYEE/DIRECTOR
- DESIGNATE
TRANSFERS
FINAL
SHAREHOLDING
%
TIL and TIL Principals 71,870 (620) 71,250 87.5%
Kern and associated entities 6,797 - 6,797 8.3%
Existing Bethunes shareholders 453 - 453 0.6%
Janes 667 300 967 1.2%
Chan 667 100 767 0.9%
Witten - 100 100 0.1%
Others 1,007 120 1,127 1.4%
Total other investors 9,590 620 10,210 12.5%
Total investors 81,459 - 81,459 100.0%

The shareholding outcomes may be impacted by the number of Bethunes shares acquired under the
Minority Buy Out Rights.

12
3 Scope of the Report
3.1 Purpose and Scope of the Report
The Directors of Bethunes have engaged Grant Samuel & Associates Limited (Grant Samuel) to prepare an
Independent Adviser’s and Independent Appraisal Report to comply with the Takeovers Code and the NZX
Listing Rules in respect of the Proposed Acquisition, the Private Placement and the TIL in-Specie Distribution
to assist Bethunes shareholders that are not associated with TIL and the Kern Persons, the TIL Principals
and Hooker/Ramsey persons (together the TIL Associates) with their assessment of the Proposed
Acquisition prior to voting on the resolutions pertaining to them. Grant Samuel is independent of Bethunes,
TIL and the TIL Associates and has no involvement with, or interest in, the outcome of the Proposed
Acquisition, the Private Placement and the TIL In-Specie Distribution. Grant Samuel has also received the
requisite approval of the Takeovers Panel and the NZX to prepare the required Independent Adviser’s and
Independent Appraisal Report.

A copy of this report will accompany the Notice of Meeting containing the necessary shareholder
resolutions on the Proposed Acquisition, the Private Placement and the TIL In-Specie Distribution to be sent
to all Bethunes shareholders. This report is for the benefit of the shareholders of Bethunes. The report
should not be used for any purpose other than as an expression of Grant Samuel’s opinion as to the merits
of the Proposed Acquisition, the Private Placement and the TIL In-Specie Distribution and as to whether the
consideration and the terms and conditions of the Proposed Acquisition, the Private Placement and the TIL
In-Specie Distribution are fair to the shareholders of Bethunes. This report should be read in conjunction
with the Qualifications, Declarations and Consents outlined at Appendix 5. Grant Samuel’s opinion is to be
considered as a whole. Selecting portions of the analyses or factors considered by it, without considering
all the factors and analyses together, could create a misleading view of the process underlying the opinion.
The preparation of an opinion is a complex process and is not necessarily susceptible to partial analysis or
summary. For the avoidance of doubt, Appendices 1 to 5 form part of this report.

There are various legal requirements regarding this report contained in the Takeovers Code and the NZX
Listing Rules which are outlined below:

3.1.1 Requirements of the Takeovers Code
The Takeovers Code seeks to ensure that all shareholders are treated equally and on the basis of proper
disclosure are able to make informed decisions on shareholding transactions that may impact on their own
holdings.

Bethunes is a ‘code company’ for the purposes of the Takeovers Code. Rule 6 of the Takeovers Code, the
fundamental rule, states that a person (along with its associates) who holds or controls:
a) no voting rights, or less than 20% of the voting rights, in a code company may not become the
holder or controller of an increased percentage of the voting rights in the code company unless,
after that event, that person and that person's associates hold or control in total not more than
20% of the voting rights in the code company;
b) 20% or more of the voting rights in a code company may not become the holder or controller of
an increased percentage of the voting rights in the code company.

Rule 7 of the Takeovers Code sets out the exceptions to the fundamental rule. Rule 7 states that a person
may become the holder or controller of an increased percentage of the voting rights in a code company
under the following circumstances:
a) by an acquisition under a full offer;
b) by an acquisition under a partial offer;
c) by an acquisition by the person of voting securities in the code company or in any other body
corporate from one or more other persons if the acquisition has been approved by an ordinary
resolution of the code company in accordance with the code;

13
d) by an allotment to the person of voting securities in the code company or in any other body
corporate if the allotment has been approved by an ordinary resolution of the code company in
accordance with the code;
e) if: (i) the person holds or controls more than 50%, but less than 90%, of the voting rights in the
code company; and
(ii) the resulting percentage held by the person does not exceed by more than 5 the lowest
percentage of the total voting rights in the code company held or controlled by the person in the
12-month period ending on, and inclusive of, the date of the increase;
f) if the person already holds or controls 90% or more of the voting rights in the code company.

The Takeovers Code specifies the responsibilities and obligations for Bethunes. The allotment of Bethunes
shares to TIL and TIL Associates under the Proposed Acquisition and the Private Placement fall under Rule
7(d) of the Takeovers Code. The transfer of Bethunes shares to the Hooker/Ramsay persons under the TIL
In-Specie Distribution falls under Rule 7 (c) of the Takeovers Code.

Rule 18 of the Takeovers Code requires the Independent Adviser to report on the merits of any proposed
allotment of shares under Rule 7 (d) or any proposed acquisition of shares under Rule 7 (c). The term
“merits” has no definition either in the Takeovers Code itself or in any statute dealing with securities or
commercial law in New Zealand. While the Takeovers Code does not prescribe a meaning of the term
“merits”, it suggests that “merits” include both positives and negatives in respect of a transaction. This
report will include the merits of the Proposed Acquisition, the Private Placement and TIL In-Specie
Distribution.

3.1.2 Requirements of the Takeovers Code – Rule 57
As part of the completion of the Proposed Acquisition and the Private Placement the following persons,
acting jointly or in concert, will have become the holders or controllers of 90% or more of the shares in
Bethunes:
§
TIL;
§
the TIL Principals; and
§
the Kern Persons.

(together the Dominant Owner) and be required to comply with the obligations on a dominant owner under
Part 7 of the Takeovers Code.

The Dominant Owner proposes to state in the acquisition notice to be sent under rule 54 (Acquisition
Notice) that outstanding Bethunes shareholders have the right to sell their shares in Bethunes for $1.50 per
share (after the share consolidation) to the Dominant Owner (with TIL or its nominee to acquire the
Bethunes shares in respect of which that right is exercised as nominee for the Dominant Owner) (Voluntary
Acquisition).

Rule 57 of the Takeovers Code relates to the compulsory acquisition where the Dominant Owner became
the holder or controller of 90% or more of the voting rights by means other than a takeover offer. This is
the situation, in this instance, when the Dominant Owner has become a dominant owner through the
receipt of Bethunes shares as consideration for the business and assets of TIL and shares in Global and a
subscription for Bethunes shares under the Private Placement.

In order to be able to comply with the obligations of Part 7 of the Code, TIL, on behalf of the Dominant
Owner, has requested for Grant Samuel to prepare an independent adviser’s certificate (Independent
Adviser’s Certificate) as required under Rule 57 (1) of the Takeovers Code to certify that the cash sum
proposed as consideration for the acquisition of shares under the Voluntary Acquisition is fair and
reasonable.

14
For the purposes of Rule 57, the fair and reasonable value of an equity security must be calculated by:
a) First assessing the value of all the equity securities in the class of equity securities of which the equity
security forms part; and
b) Then allocating the value pro rata among all the security of that class.

The Rule 57 report should include a valuation of the Code company. This is important because outstanding
security holders can object to the acquisition consideration. Accordingly, in order to exercise their objection
rights in a considered manner, the outstanding security holders should have access to the financial analysis
undertaken by the independent adviser.

The Dominant Owner will not enforce its rights under the Takeovers Code to acquire the Bethunes shares.
In other words, the current shareholders in Bethunes will have an option to sell the shares they own in
Bethunes for $1.50 or retain them. It is their decision. The total number of shares held in Bethunes
following the consolidation and acquisition of the business and assets of TIL and tranche 1 of the Private
Placement will be 452,652 out of a total 79,119,333
4
or less than 0.06% of the total shares on issue. The
Takeovers Code provides for the shareholders under Voluntary Acquisition to object to the price if the
holders of 10.0% or more of the outstanding securities object
5
. In this instance, the “outstanding securities”
means the shares not held by the Dominant Owner being the 452,652 shares held by the original
shareholders of Bethunes. In this instance, the Dominant Owner has stated that there will not be any
compulsory acquisition, but shareholders may choose to sell their shares at the price offered.

Section 8 of this report titled Valuation Summary and Certification is for the purpose of Rule 57 of the
Takeover Code.
3.2 Requirements of the NZX Listing Rules
3.2.1 Major transaction under the Companies Act, and under Listing Rule 9.1.
The Proposed Acquisition, the Private Placement and ASB Debt Facilities (together the Proposed
Transaction) constitute a “major transaction” for Bethunes under section 129 of the Companies Act 1993
as they will involve the acquisition of assets, the Private Placement and the entry of financing and security
arrangements with ASB, the value of which is more than half the market value of Bethunes’ assets prior to
the entry into these transactions.

Listing Rule 9.1.1 provides that, except with the prior approval of a special resolution, Bethunes may not
enter into any transaction or series of linked or related transactions to acquire, sell, exchange, or otherwise
dispose of assets in Bethunes:

a) which would change the essential nature of the business of the Company; or
b) in respect of which the gross value is in excess of 50% of the average market capitalisation of the
Company.

In accordance with 9.1.2 and the NZX’s Guidance Note on Backdoor and Reverse Listing Transactions, an
Appraisal Report is required to accompany the Notice of Meeting to approve the required special
resolution.

3.2.2 Appraisal Report Requirements
Pursuant to Listing Rule 1.7.2 this Appraisal Report is required to:
§
be addressed to shareholders of Bethunes;
§
be expressed to be for the benefit of the shareholders of Bethunes;
§
state whether or not in the opinion of Grant Samuel the consideration and the terms and conditions of
the Proposed Transaction are “fair” to Bethunes shareholders;
_______________________________________________________________________________________________________________________________________________________
4
This is the total number of shares at Completion and before the second tranche of the Private Placement.
5
Bethunes has only one class of ordinary shares

15
§
state whether or not in Grant Samuel’s opinion the information to be provided by Bethunes to its
shareholders is sufficient to enable holders to understand all the relevant factors, and make an informed
decision;
§
state whether Grant Samuel has obtained all information which it believes desirable for the purposes of
preparing the report, including all relevant information which is or should have been known by any
director of Bethunes and made available to the directors;
§
state any material assumptions on which Grant Samuel’s opinion is based;
§
state any term of reference which may have materially restricted the scope of the report;
§
in addition, the NZX’s Guidance Note on Backdoor and Reverse Listing Transactions also requires:
• a statement of whether there are any possible alternative courses for Bethunes other than the
Proposed Transaction; and
• state whether or not, in Grant Samuel’s opinion, the terms of the Proposed Transaction are “fair
and reasonable” to shareholders and “in the best interests” of Bethunes.

The term “fair” has no legal definition in New Zealand either in the NZX Listing Rules or in any other statutes
dealing with securities or commercial law. However, guidance in interpreting and applying the rule can be
gained both from regulatory interpretation in other jurisdictions and rulings made by the NZX.

The decision of each Bethunes shareholder as to whether or not to vote in favour of the Proposed
Transaction is a matter for individual shareholders having considered all relevant factors and their own
preference either in favour of or against the Proposed Transaction.
3.3 Basis of Evaluation
Grant Samuel has evaluated the Proposed Transaction and the TIL In-Specie Distribution by reviewing the
following factors:
§
the value attributed to TIL Logistics;
§
the attraction of TIL Logistics and its future prospects;
§
the risks associated with TIL Logistics;
§
the intentions of TIL’s existing shareholders in regard to future capital raisings;
§
the likelihood of an alternative offer and alternative transactions that could realise fair value;
§
the likely market price and liquidity of Bethunes shares in the absence of the Proposed Acquisition, the
Private Placement and the TIL In-Specie Distribution;
§
any advantages or disadvantages for Bethunes shareholders of approving or rejecting the Proposed
Acquisition, the Private Placement and the TIL In-Specie Distribution;
§
the timing and circumstances surrounding the Proposed Acquisition, the Private Placement and the TIL
In-Specie Distribution;
§
the extent of the Proposed Acquisition, the Private Placement and the TIL In-Specie Distribution in the
context of Bethunes’ existing shares on issue;
§
the attractions of New BIL; and
§
the risks associated with a shareholding in New BIL.

16
4 Profile of Bethunes
Bethunes is an NZX listed company which was previously named Mowbray Collectables Limited, a philatelic
business that was listed by founder Mr. John Mowbray on the New Capital Market in April 2000 and ultimately
listed on the NZX Main Board in December 2002. The performance of Mowbray Collectables has failed to reach
expectations since listing.

In 2014, the Board initiated a divestment and capital raising programme to retire debt. This process culminated
in the sale of the stamps, coins and notes business in 2015 and Peter Webb Galleries Limited (Webbs) to
Australian based Auction House - Mossgreen on 31 January 2016.

As a result of the sale of Webbs and the capital raising programme, Bethunes has been in a net cash position
since the financial year ended 31 March 2016. In August 2015, at the time of the capital raising, Bethunes stated
its intentions were to acquire a portfolio of assets to generate high free cash flows. At the time, Bethunes stated
its intention to raise additional capital when/if it has the opportunity to execute on a new investment.

During the financial year ended 31 March 2017, Bethunes reviewed investment opportunities across a range of
sectors and made its first investment in ASX listed Pental Limited (Pental), an Australian manufacturer of
household chemicals and cleaning products.

In March 2017 Bethunes announced to the market that it had signed a non-binding conditional term sheet with
Westgate Power Centre Limited and NZ Retail Property Group Limited (together referred to as NZRPG). The
announced transaction was similar in structure to the Proposed Transaction, whereby the business of NZRPG
would be reverse listed into Bethunes through Bethunes issuing shares to NZRPG. Bethunes would then assume
the name NZ Retail Property Group Limited.

The effect for Bethunes shareholders if the transaction had completed was that they would retain their current
Bethunes shares which would become a small interest in NZRPG and also, for no consideration, receive shares in
a new entity which would hold the assets and business plans that Bethunes presently had. In June 2017,
Bethunes announced that it planned to raise $10 million in equity, increase the Pental investment and investigate
further an Agriculture sector investment opportunity.

In July 2017 Bethunes was advised by NZRPG that the proposed reverse listing transaction was terminated. The
decision followed a non-deal roadshow by NZRPG where market feedback indicated a capital raising in the
current climate would not attach in the NZRPG Board’s view a fair and reasonable price to NZRPG’s portfolio of
assets. Bethunes’ was reimbursed by NZRPG for its incurred costs from this transaction and also received a break
fee. Bethunes shareholders were therefore no worse off after the proposed NZRPG transaction was terminated.

On 26 October 2017, Bethunes announced to the market the Proposed Transaction.

17
4.1 Financial Performance
The financial performance of Bethunes for the years ended 31 March 2016 and 2017 is shown below:

BETHUNES FINANCIAL PERFORMANCE (NZ$ 000)

YEAR ENDED 31 MARCH 2016 2017
Net interest income 3 51
Dividends received - 4
Revaluation of financial assets - 14
Other revenue 39 16
Total revenue 43 85
Employee expenses (91) -
Professional fees (170) (148)
Directors fees (61) (60)
FMA and NZX expenses (48) (45)
Other expenses (83) (20)
Total expenses
(453) (273)
Net profit before tax (410) (187)
Taxation - (35)
Net profit from continued operations (410) (222)
Loss from discontinued operations (1,613) -
Net profit (2,023) (222)
Bethunes 2017 Annual Report

The following points should be taken into consideration when reviewing the table above:
§
Bethunes has no employees. All employees were transferred with the auction business when it was sold in
the financial year ended 31 March 2016;
§
the dividends and revaluation of financial assets relate to Bethunes’ investment in ASX listed company
Pental;
§
the tax expense in the financial year ended 31 March 2017 is a provision for a tax refund as the Bethunes
Directors cannot be certain of future taxable income to use the tax credit; and
§
the loss from discontinued operations relates to the Webb business which was sold in January 2016.
4.2 Financial Position
The financial position of Bethunes as at 31 March 2016 and 2017 and 30 September 2017 is shown below:

BETHUNES FINANCIAL POSITION (NZ$ 000)

AS AT 31 MARCH 2016 31 MARCH 2017 30 SEPTEMBER 2017
Cash and NZX Bond 447 259 232
Listed company investments - 120 127
Receivable from Mossgreen 355 242 179
Other assets 59 35 27
Total assets 861 656 565
Loan from NZRPG - (39) (3)
Other liabilities (150) (128) (80)
Total liabilities (150) (167) (83)
Net assets 711 489 482
Bethunes Annual Report 2017 and Interim Report at 30 September 2017

18

The following points should be taken into consideration when reviewing the table above:
§
on 3 October 2015, Bethunes issued approximately 102.3 million shares at $0.15 per share to recapitalise
the company. Of the $1.5 million raised, $1.4 million was received in cash with the balance coming from
supplier payables settled in shares;
§
the listed company investments relates to Bethunes’ investment in Pental. Pental was valued using the
quoted prices on the ASX as at 31 March 2017 and 30 September 2017;
§
Webbs was sold to Mossgreen on 31 January 2016 for $800,000. On settlement $320,000 was paid, with
the balance of the consideration being paid in 12 quarterly payments from 31 March 2016. As at 30
September 2017 the discounted balance of the consideration was $179,000;
§
the loan from NZRPG relates to the proposed reverse listing which was terminated by NZRPG on 25 July
2017. NZRPG provided a loan of $75,000 to cover transactions costs, from which Bethunes expenses were
paid. As a consequence of terminating the transaction, the NZRPG loan was satisfied in full and a break fee
of $75,000 was paid to Bethunes; and
§
the financial position as at 30 September 2017 reflects the company’s status as an investment shell.
4.3 Ownership
As at 3 November 2017 Bethunes had 115,060,279 shares on issue held by approximately 335 shareholders.
Bethunes’ top 20 shareholders are shown below:

BETHUNES TOP 20 SHAREHOLDERS AS AT 3 NOVEMBER 2017

SHARES (000) %
Custodial Services Limited 12,183 10.6%
CAZNA (2904) Limited (Douglas Goodfellow charitable trust) 11,667 10.1%
Ronald Brierley 11,000 9.6%
Elevation Capital Management Limited 10,000 8.7%
Maryanne Owens & Mark Owens 10,000 8.7%
Ballynagarrick Investments Limited 5,367 4.7%
John Mowbray 5,134 4.5%
Solar Capital Limited 3,333 2.9%
Ross Harvey 2,449 2.1%
Nigel Fannin & Rosemary O'Brien & Kevin Harborne 2,015 1.8%
Andrew Harmos 2,000 1.7%
Christopher Swasbrook & Charlotte Swasbrook 2,000 1.7%
Pato Trading Limited 2,000 1.7%
Horton Corporation Limited 2,000 1.7%
David Dromer 1,899 1.7%
Bottom Drawer Limited 1,726 1.5%
Phillip Lindberg 1,500 1.3%
Adrian Barkla 1,500 1.3%
Craig Stobo & Gillian Stobo & Richard Johnston 1,500 1.3%
Marcus Stone 1,500 1.3%
Top 20 shareholders 90,774 78.9%
Other shareholders 24,287 21.1%
Total 115,060 100.0%
NZX Company Research

Bethunes is tightly held, with the top twenty shareholders holding 78.9% of the company.

19
4.4 Share Price Performance
BETHUNES SHARE PRICE PERFORMANCE FROM 1 JANUARY 2017 TO 9 NOVEMBER 2017

NZX Company Research

Bethunes is thinly traded. The shares have traded between $0.005 and $0.023 since January 2017. The Bethunes
share price increased on the announcement of the Proposed Acquisition. As at 9 November 2017 Bethunes has
a market capitalisation is approximately $2.1 million. The Proposed Acquisition is complex and the current share
price, in Grant Samuel’s opinion, does not reflect the implied value of the Proposed Acquisition.

0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
$0.00
$0.01
$0.01
$0.02
$0.02
$0.03
Jan-2017 May-2017 Sep-2017
Volume (000s)
Price
VolumePrice

20
5 Overview of the New Zealand Freight and Logistics Industry
The New Zealand freight and logistics industry can be broadly categorised into the following sectors:
§
Domestic Freight which encompasses the movement of domestic freight from business to business and
business to consumer. The primary mode of transporting freight in New Zealand is by road. This is primarily
due to the high proportion of inland freight movements that are not able to be serviced by the relatively
limited coastal shipping or rail networks. A large proportion of domestic freight is related to the import and
export of goods and involves the transport of goods to and from major ports. The domestic freight sector
also generally includes the delivery of often smaller, time sensitive express packages which is typically
undertaken by courier services;
§
Warehousing and Logistics is the provision of warehousing and logistics services. Third party logistics (3PL)
is a growing segment of the freight and logistics market largely due to the impact of technology and growth
in ecommerce (business to business and business to consumer) over the past five years. The growth in
ecommerce has shifted the trend from the provision of general warehousing space towards value added
services and supply chain management (e.g. inventory management, packaging and freight forwarding).
This trend has provided revenue growth opportunities for warehousing and logistics operators. Due to the
increasing scale and sophistication of the service offerings, New Zealand businesses are shifting to
outsourcing their warehousing and distribution activities; and
§
International Freight Forwarding is the management of getting imports and exports from the pick up point
to the final destination. This usually requires a forwarding agent to contract with one or more freight
providers to transport the goods through the logistics network. The movement of goods across
international borders also often includes customs processing and other documentation and performing
activities pertaining to international shipments.

The freight and logistics industry has demonstrated steady growth since 2000 and is largely driven by:
§
Population growth which drives consumption and demand for goods that require transport to reach
consumers. The New Zealand population is forecast to grow by approximately 1.7% per annum during the
course of the next 10 years adding another 1 million people
6
;
§
Import and export volumes which requires goods to be transported to and from the ports and airports.
Import and export volumes have grown steadily since 2000 at approximately 3.3% per annum, with exports
growing at a faster rate since 2009 due an increased demand for New Zealand products; and
NEW ZEALAND EXPORTS AND IMPORTS – ALL PORTS


Source: Statistics New Zealand



_______________________________________________________________________________________________________________________________________________________
6
Statistics New Zealand - National Population Projections: 2016 (base)–2068 – Media Release
0
10
20
30
40
50
60
70
200020012002200320042005200620072008200920102011201220132014201520162017
Tonnes (millons)
ExportsImports
Compound Annual Growth Rate of 3.3%

21
§
Economic growth. As freight and logistics is a critical component of most economies, the industry growth
broadly reflects the underlying trends of the New Zealand economy.
GROSS DOMESTIC PRODUCT BY INDUSTRY - TRANSPORT, POSTAL AND WAREHOUSING
7


Source: Statistics New Zealand

Road freight is typically characterised as:
§
less than container load or less than a full truck load (LTL) brings the aggregation of smaller freight
consignments, including palletised product, within a full container load; and
§
full container load or full truck load (FTL) which specialises in bulk freight transport and includes the
movement of large consignments including:
• palletised product;
• containerised product;
• bulk liquid management; and
• flat-deck and over dimensional transport specialists.

FTL freight has a higher degree of commoditisation than LTL freight and largely operates on point to point inter-
regional (line haul) routes. LTL typically takes place across both interregional and metropolitan routes. TIL is
focused on the national LTL market, while also servicing the FTL market, particularly within the provincial regions.

The freight and logistics industry in New Zealand is characterised by low market share concentration, with over
4,500 private operators with the five largest freight operators accounting for approximately 25% of the industry
revenue. Market share concentration is tending to increase as some larger firms increase their market share,
market consolidators like TIL acquire smaller operators and smaller, less efficient operators exit the industry
8
.
While market share concentration is low in the industry, certain segments of the industry have a high degree of
concentration as freight providers specialise in the transport of specific goods or materials. For example, Toll
and TIL have a strong presence in the transport of oil and gas in New Zealand and Mainfreight has a leading
market share of the New Zealand LTL market
9
. The highly fragmented industry presents an opportunity for TIL
to acquire smaller competitors and consolidate the market.


_______________________________________________________________________________________________________________________________________________________
7
2009/2010 Pricing
8
IBIS – Road Transport in New Zealand – April 2017.
9
UBS – Mainfreight - Growth does not come cheap anymore - 3 March 1017
6,000
6,500
7,000
7,500
8,000
8,500
9,000
9,500
10,000
20002001200220032004200520062007200820092010201120122013201420152016
GDP Transport, Postal and Warehousing ($m)
Compound Annual Growth Rate of 2.4%

22
According to recent market research, the key success factors for freight and logistics operators in New Zealand
are
10
:
§
having an integrated full service offering. Road freight operators with integrated operations in air and sea
freight and warehouse and logistics can often provide a superior customer offering due to a higher level of
control across all aspects of the supply chain;
§
access to highly skilled workforce. The labour market in New Zealand is tight and therefore the ability to
retain and attract staff, management and drivers that are experienced in the industry can result in
meaningful efficiency gains;
§
ability to compete and win tenders. Companies that obtain long term contracts benefit from steady
revenue streams which can be used to underwrite future growth opportunities; and
§
ability to compete on price. Operators that can compete profitably at lower prices, can attract new
business and achieve growth. The ability of operators to compete on price is partially linked to the specialty
and size of their operations and in some cases greater service offerings.
_______________________________________________________________________________________________________________________________________________________
10
IBIS – Road Transport in New Zealand – April 2017.

23
6 Profile of TIL
6.1 Background
TIL is one of New Zealand’s largest domestic freight and logistics platforms with a nationwide network of
branches, depots and warehouses. TIL was established as an investment vehicle by private equity interests in
1992 and under the control of the partners of Hooker Bros (1989) Limited over the next 25 years TIL successfully
acquired over 20 freight and logistics companies across New Zealand. A timeline of TIL’s history is summarised
below:
TIL HISTORY
YEAR EVENT
1869
• Hooker Bros founded (provincial regions of the North Island)
1988
• Current management acquires Hookers
1993
• Acquired NZ Express (Wanganui)
1995
• Acquired South Pacific Transport (Palmerston North)
2002
• Acquired 50% of TNL Group (Upper South Island)
2003
• First fuel haulage contract won (Caltex)
2004
• Acquired Bearsley Transport (Hawkes Bay)
2007
• Acquired remaining 50% of TNL Group (South Island)
2009
• Acquired Tulloch Transport (Otago/ Southland)
• Acquired 50% of ATL (Central Otago)
2013
• Acquired Roadstar (Upper North Island)
• Formed Pacific Fuel Haul – New Zealand’s single largest fuel delivery company
2014
• Acquired McAuleys Transport (Lower North Island)
• Formed TIL Freight (Integration of 3 distinct freight operations)
2017
• Acquired Move Logistics. Expansion in warehousing market
• Acquired NZL (Tauranga)
• Acquired Glassworks contract

Historically, the companies under TIL operated separately and independently. In 2014, TIL restructured the
organisation bringing the companies together under one group management structure supported by centralised
corporate services and a single integrated IT system. This has enabled TIL to more effectively provide a seamless
freight and logistics services to its customers, offering the following services:
§
General freight/domestic transport: Domestic freight via road, rail and coastal shipping with a specialised
heavy haulage division;
§
Dangerous Goods: Specialist distributors of petroleum products;
§
Warehousing, inventory and supply chain services. Specialised warehousing and 3PL facilities; and
§
International freight forwarding. Shipping, customs and agency services with a particular specialisation in
oil and gas.

TIL currently has approximately 1,700 employees and owner drivers.

24
6.2 Business Overview
A summary of TIL’s brand portfolio and its divisions is outlined below.


6.2.1 TIL International
TIL International is a freight forwarder with offices in New Zealand and Australia arranging the
transportation of customers’ freight both domestically and internationally. The international connections
are made via a network of alliances and domestic connections are routed through TIL’s network.

TIL International also provides New Zealand customs clearance work, port services, ship husbandry, crew
matters, tank clearing and a range of other services for importers/exporters. TIL International is sector
agnostic, but it has particular expertise in oil and gas logistics. Its customers range from large multinational
companies through to smaller sole traders.

6.2.2 TIL Freighting
TIL Freighting is one of the largest freight carriers in New Zealand providing both LTL and FTL consignment
transport, with the majority being time-specific.

TIL Freighting operates in the general freight industry servicing a broad range of customers throughout New
Zealand. TIL Freighting operates multiple brands throughout the country with each brand having a
particular geographical area of strength and there is a high degree of co-operation across the different
entities to maximise line haul utilisation. The brands, infrastructure and network provide nationwide
coverage enabling TIL Freighting to compete for large nationwide contracts.

On 1 July 2014 Roadstar, TNL and Hooker Pacific were amalgamated into TIL Freighting. This process was
challenging and the disruption resulted in a temporary decline in earnings in the 2014 and 2015 financial
years. Over the last two financial years the operational benefits of all brands working off the same software
systems and the synergy benefits have resulted in an improvement in earnings and operational
performance. The synergy benefits have included fleet rationalisation, increased utilisation and a reduction
in back office costs.

International
Freighting
Tankers
Warehousing

25
6.2.3 TIL Tankers
TIL Tankers currently operates one of the largest dangerous goods fleets in New Zealand. TIL also transports
bitumen, crude oil and condensate. TIL Tankers provides the following services:
§
bulk delivery of petroleum to service stations and commercial customers;
§
petroleum delivery to farms and commercial premises;
§
fuel and build chemical transportation; and
§
dispatch and distribution for LPG customers across New Zealand, including line haul and local deliveries.

TIL Tankers has 10-20 year relationships with its key customers. TIL’s market position and the stable nature
of petroleum consumption provides relatively stable and consistent earnings. TIL Tankers’ market position
is protected to some extent by the relatively high barriers to entry including the expertise required to
comply with the health and safety regimes and the significant capital required to acquire the assets
necessary to service significant volumes across a large geographic area.

6.2.4 TIL Warehousing
TIL manages over 150,000m
2
of warehousing space spread throughout New Zealand and in close proximity
to TIL Freighting operations.

Up until the acquisition of MOVE Logistics in 2017, TIL had modest warehouse operations with only four
warehouses located in Nelson, Blenheim, New Plymouth and Christchurch. The acquisition of MOVE
Logistics was strategically important as customers are seeking to simplify their supply chain by using a single
provider. The recent acquisition of MOVE Logistics and to a lesser extent, NZL has enabled TIL to become
an end to end freight and logistics provider and it has enhanced TIL’s access to the Auckland market.

To minimise integration risk, MOVE Logistics will operate as a stand alone business. Over time the business
will be slowly integrated into the TIL Group’s systems and management will seek to extract available
synergies including fleet and warehouse utilisation and the cross selling of services.

TIL also owns 50% of UNITE Logistics, an Auckland based metropolitan delivery business servicing
Placemakers with approximately 30 trucks and 40 staff.

TIL WAREHOUSING LOCATIONS


5 Warehouses, ~17,000m
2

3 Warehouses, ~6,000m
2

2 Warehouses, ~5,000m
2

1 Warehouse, ~6,000m
2

2 Warehouses, ~8,000m
2

4 Warehouses, ~24,000m
2

2 Warehouses, ~14,000m
2

26
6.2.5 Group Management
The Group Management division, which is primarily located in New Plymouth incorporates:
§
an executive management team which oversees the strategic direction of TIL. The customer facing
business units have varying degrees of autonomy, taking into consideration the ownership structure
and the length of time the business has been under TIL’s ownership (e.g. MOVE Logistics was acquired
in May 2017 and, at this stage, it is currently operating as a stand alone entity with partial back office
integration); and
§
back office, treasury and finance functions including management account reporting, payroll, accounts
payable, insurance, information technology and fleet procurement.
6.3 TIL’s Fleet
TIL owns the majority of its fleet which has a current market value of approximately $125 million. A summary of
TIL’s fleet is provided below:
TIL FLEET SUMMARY AS AT 31 OCTOBER 2017

TRUCKS TRAILERS FORKLIFTS LIGHT VEHICLES
Owned 630 920 190 150
Leased 120 70 80 30
Owner driver 160 160 - -
Total 910 1,150 270 180
6.4 Growth Strategy
TIL’s growth strategy includes:
§
Cross selling services to the existing customer base. Prior to the acquisition of MOVE Logistics, TIL was
considered a general and specialised freight provider and international freight forwarder. Since the
acquisition TIL has been selling warehousing space to its 4,000 freight customers. MOVE Logistics also
has ten large customers which do not currently use TIL for its distribution requirements;
§
Improved utilisation of existing and new networks. TIL’s management believe that its logistics platform
has the capacity to support materially higher levels of volume than currently handled with minimal
marginal capital investment;
§
Intermodal expansion. Road transportation is currently TIL’s primary mode of freight distribution in
New Zealand. TIL’s increase in scale has made rail and coastal shipping opportunities more relevant.
TIL believes it can achieve margin benefits from using these alternative modes of transport for time
insensitive consignments;
§
A reduction in capital intensity. Historically, TIL has preferred to own its fleet. In the future TIL will
consider a shift to an owner-driver model (or a mixed model) to decrease the future capital
requirements of the business and to provide funds for future acquisition opportunities; and
§
Acquisitions of smaller competitors. Through its history, TIL has made over 20 business acquisitions
and management believe it has the requisite skills to identify, acquire and integrate businesses and to
realise synergies. TIL’s management has identified a number of targets and are currently investigating
these possibilities.

27
6.5 Financial Performance
The table below shows the historical and forecast pro forma financial performance of TIL for the financial
years ended 30 June 2015 (FY15), 2016 (FY16) and 2017 (FY17) and the financial years ending 30 June 2018
(FY18) and 2019 (FY19):
TIL HISTORICAL AND FORECAST PRO FORMA FINANCIAL PERFORMANCE ($MILLIONS)

ACTUAL FORECAST

YEAR ENDED 30 JUNE 2015 2016 2017 2018 2019
Freight revenue 297.2 282.0 284.8 287.6 294.0
Warehousing 17.8 19.9 27.0 29.3 30.0
Trading and other income 15.1 11.4 11.7 11.9 11.5
Total Revenue 330.1 313.3 323.5 328.8 335.5
Salaries & wages (80.4) (82.0) (88.6) (90.8) (92.6)
Owner driver and subcontractor costs (91.1) (77.3) (72.6) (72.4) (73.4)
Road user charges/licences (22.7) (22.4) (22.4) (22.7) (23.3)
Fuel & oil (22.2) (16.9) (18.2) (18.4) (18.8)
Repairs & maintenance (22.7) (22.2) (22.2) (22.8) (23.3)
Equipment hire/lease (10.4) (9.3) (10.7) (10.5) (10.4)
Other direct costs (10.5) (9.1) (10.1) (10.5) (10.3)
Total direct costs (260.1) (239.2) (244.8) (248.1) (252.0)
Gross margin 70.0 74.1 78.7 80.7 83.5
Gross margin % 21.2% 23.7% 24.3% 24.5% 24.9%
Property costs (17.6) (18.7) (19.6) (19.6) (19.3)
Salaries & wages (22.2) (20.2) (20.5) (20.1) (20.2)
Other overheads (14.9) (13.8) (14.0) (12.8) (12.8)
Total expenses (54.7) (52.7) (54.1) (52.4) (52.3)
Normalised EBITDA before associate contribution 15.3 21.4 24.6 28.2 31.2
EBITDA % 4.6% 6.8% 7.6% 8.6% 9.3%
Associate EBITDA 0.6 1.0 1.0 1.1 1.2
Normalised EBITDA including associates 15.9 22.4 25.6 29.4 32.3
Depreciation and amortisation (14.5) (15.2) (14.7) (13.4) (12.9)
Normalised EBIT including associates 1.4 7.2 10.9 15.9 19.4
TIL Pro Forma Accounts and Forecast

The following points should be taken into consideration when reviewing the table above:
§
the financial information is presented on a pro forma basis. The pro forma adjustments include:
• the inclusion of the financial performance of recent acquisitions, MOVE Logistics, the Glassworks
business, McAuley’s Transport and NZL, into the historical periods prior to the time when they
were acquired; and
• removing the financial performance of Actus Transport Limited which was sold in FY15 and TIL
Properties which is not part of the Proposed Acquisition;
§
the FY18 information includes two months of actual results for the period ended 31 August 2017 and
ten months of forecast information for the period ended 30 June 2018;
§
TIL achieved pro forma EBIT growth of $9.5 million between FY15 and FY17. The increase in EBIT was
driven by an improvement in gross margins, largely due to growth in warehousing revenue which is
more profitable than freight revenue and a reduction in indirect salaries and wages;
§
EBIT is forecast to increase by a further $8.5 million over the next two years. TIL expects EBIT to increase
due to forecast revenue increases and the continued impact of operational efficiency initiatives arising
from continued expansion, implementation of a new warehouse management system, use of own fleet
and integration of the recently acquired companies;
§
the key factors that TIL believes will impact the forecast financial performance in FY18 include:

28
• general freighting revenue growth of 1.4% is forecast due to expected increases in services from
existing and new customers, small incremental price increases on negotiation of contracts and the
ability to utilise TIL’s own fleet where it was previously outsourced under MOVE and NZL;
• fuel haulage revenue is forecast to decrease by 0.9% due to the loss of one customer. This
decrease has been lessened by redeploying the fleet to new methanol and biodiesel cartage
contracts and rate increases that became effective towards the end of FY17; and
• warehousing revenue is forecast to grow by 9.0% driven by additional work for existing customers
and improved group wide synergies from bringing together TIL and MOVE (i.e. MOVE and TIL will
be undertaking work for each other that was previously performed by external providers);
§
the forecast increase in EBIT is also due to cost savings that management expect to achieve as a result
of integrating MOVE Logistics and NZL with TIL. Cost savings include a reduction in insurance premiums,
fuel costs and truck leases due to TIL’s purchasing power, a reduction in back offices salaries and
consolidation of certain depots. The identified forecast synergy benefits are outlined below:
TIL FORECAST SYNERGIES ($MILLIONS)

FORECAST

YEAR ENDED 30 JUNE 2018 2019
Truck lease 0.3 0.4
Fuel and oil 0.2 0.2
Other direct costs 0.1 0.2
Direct costs synergies 0.5 0.7
Insurance 0.6 0.6
Rent - 0.3
Other overheads 0.3 0.6
Overhead synergies 0.9 1.5
Total synergies 1.4 2.2
TIL Pro Forma Accounts and Forecast

§
EBITDA has been normalised in FY18 to account for the $19.3 million of transaction costs that will be
incurred by TIL, which includes $2.2 million for employee share based payments and $9.7 million of
share based payments to Kern Group. The overheads have also been adjusted to reflect the expected
increase in governance costs due to TIL becoming a listed company;
§
the pro forma historical depreciation charges are an aggregation of the actual depreciation charges
recognised in each of the respective entities in the relevant periods. The acquired assets were being
depreciated more rapidly under previous ownership than they will be under TIL ownership. This largely
explains the decline in depreciation and amortisation in FY18; and
§
Associate EBITDA relates to the 50% joint venture in ATL Limited (ATL) and UNITE Logistics Limited
(UNITE) and a 25% shareholding in TNL International Christchurch Limited (TNL Christchurch).

29
6.6 Financial Position
The table below shows the historical pro forma financial position of TIL as at 30 June 2016 and 2017:
TIL HISTORICAL PRO FORMA FINANCIAL POSITION ($MILLIONS)

AS AT 30 JUNE 2016 2017
Accounts receivable 39.8 39.9
Other current assets 1.8 1.5
Current assets 41.6 41.4
Accounts payable (16.8) (18.7)
Sundry payables & accruals (8.3) (14.7)
Other current liabilities (9.4) (9.8)
Current liabilities (34.5) (43.2)
Working capital 7.1 (1.9)
Fixed assets 75.0 81.2
Investments in associates 1.1 2.1
Advances to associates 0.6 0.5
Deferred tax liability (2.9) (3.8)
Other operating assets 73.7 80.0
Net operating assets 80.8 78.2
TIL Pro Forma Accounts

The following points should be taken into consideration when reviewing the table above:
§
the financial position is presented on a pro forma basis that is consistent with the adjustments made to
the financial performance table outlined in section 6.5;
§
working capital decreased by approximately $9.0 million in the 12 months to 30 June 2017. This decline
is largely due to:
• an increase in accounts payable due to stretching creditors at a time where cash flow was
constrained due to tax and loan payments;
• an increase in sundry payables and accruals relating to $2.2 million of accruals associated with the
acquisitions of MOVE Logistics and NZL and $1.2 million relating to the sale of fleet assets to TR
Group; and
§
fixed assets increased by $6.2 million from June 2016 to June 2017, primarily due to the revaluation of
MOVE Logistics and NZL fixed assets to fair value on acquisition.

30
6.7 Cash flow
The table below shows the pro forma cash flow for FY15, FY16 and FY17 and forecast for FY18 and FY19:

TIL HISTORICAL AND FORECAST PRO FORMA CASH FLOW ($MILLIONS)

ACTUAL FORECAST

YEAR ENDED 30 JUNE 2015 2016 2017 2018 2019
Receipts from customers 320.6 318.0 319.0 327.9 334.5
Normalised payments to suppliers and employees (311.0) (306.6) (292.0) (299.5)
12
(303.6)
Income taxes paid (0.2) (0.1) (2.7) (3.9) (4.3)
Net cash flow from operating activities before interest 9.4 11.3 24.3 24.4 26.6
Purchases of fixed assets (19.9) (10.8) (16.9) (10.2) (7.7)
Proceeds from sale of fixed assets 3.2 1.8 8.1
- -
Investment in JV (0.1) 0.2 0.2 - -
Acquisition of McAuley’s Transport (net of cash) (3.7) - - - -
Free cash flow before financing activities (11.2) 2.6 15.7 14.2 19.0
TIL Pro Forma Accounts and Forecast

The following points should be taken into consideration when reviewing the table above:
§
historical capital expenditure is high due to the upgrade of the fleet for heavier loads (50 tonne fleet).
Due to the capital intensity from FY15 and FY17, forecast capital expenditure is lower than depreciation
in FY18 and FY19; and
§
the purchase and proceeds of fixed assets includes the purchase and subsequent sale of fleet assets
with TR Group under a sale and lease back arrangement.
_______________________________________________________________________________________________________________________________________________________
12
Payment to suppliers and employees has been adjusted to reflect the normalisations in FY18

31
7 Implied Valuation of TIL
Under the Proposed Acquisition, Bethunes will acquire the Acquired Assets at an Enterprise Value of $200 million
(which is the value on an ungeared basis). This implies the following multiples:

TIL LOGISTICS IMPLIED MULTIPLES

Multiple of EBITDA – year ended 30 June 2017
7.6
Multiple of EBITDA – year ending 30 June 2018
6.8
Multiple of EBIT – year ended 30 June 2017 17.4
Multiple of EBIT – year ending 30 June 2018 12.6

The historical EBIT multiple is high relative to the forecast EBIT multiple due to the forecast growth in earnings
and the change in accounting treatment of depreciation and amortisation in the forecast period (see section 6.5).
If the historical EBIT was adjusted to be consistent with the treatment of depreciation and amortisation in the
forecast period the historical EBIT multiple would decrease to approximately 15.6 times. An explanation
regarding interpreting the above multiples is included at Appendix 4.
7.1 Adjusted Earnings for Implied Multiples
The following table summarises the adjusted earnings for the year ended 30 June 2017, together with the
forecast for the year ending 30 June 2018:

TIL LOGISTICS EBITDA AND EBIT FOR IMPLIED MULTIPLES ($MILLIONS)

AS AT 30 JUNE 2017 2018
EBITDA including associates 25.6 29.4
Shareholder costs 0.3 -
Acquisition costs 0.6 -
NZL restructure costs 0.5 -
NZL management fees 0.2 -
Other NZL costs 0.2 -
Interest received (0.1) (0.1)
Profit on the sale of assets (1.0) -
Adjusted EBITDA 26.2 29.2
Depreciation and amortisation (14.7) (13.4)
Adjusted EBIT 11.5 15.8
TIL Pro Forma Accounts and Forecast and PWC Due Diligence Reports

Grant Samuel has adjusted the historical and forecast EBITDA and EBIT by:
§
normalising historical shareholder costs to reflect the costs that will be incurred by the listed company;
§
excluding the costs associated with the acquisitions of MOVE and NZL as these costs are considered to
be abnormal expenses that are not associated with the ongoing operations of the business;
§
excluding NZL restructuring costs that were incurred in late 2016. The adjustment to earnings reflects
the redundancy costs and a normalised view of salaries as a result of the restructure;
§
excluding management fees charged to NZL under its former ownership. Prior to being acquired by TIL,
NZL operated under a company structure whereby it incurred management fees that were charged by
another entity that operated within the group. The management fee did not reflect the costs of the
corporate services that were being provided. The earnings have been adjusted to reflect the cost of the
functions that were being provided at the time;
§
excluding interest received that was included in other income;
§
excluding other NZL costs that will not be incurred by TIL and are considered to be abnormal, including
rental of accommodation for employees operating outside of NZL; and
§
excluding profit from the sale of assets and the sale and leaseback of fleet assets.

32
7.2 Earnings Multiple Analysis
7.2.1 Share Market Evidence
The multiples implied by the pricing of the Proposed Acquisition can be considered having regard to the
earnings multiples implied by the share market prices of listed international companies with operations in
the freight and logistics industry. While none of these companies are directly comparable to TIL Logistics,
the share market data provides a framework within which to assess the Proposed Acquisition price:

SHARE MARKET RATINGS OF LISTED FREIGHT AND LOGISTICS COMPANIES – FORECAST EBTIDA MULTIPLE


Source: Grant Samuel analysis and Capital IQ

SHARE MARKET RATINGS OF LISTED FREIGHT AND LOGISTICS COMPANIES – FORECAST EBIT MULTIPLE


Source: Grant Samuel analysis and Capital IQ

A description of each of the listed comparable companies and a detailed table of the comparable company
analysis is set out in Appendix 1.

Most of the listed transport and logistics companies are large international companies with diverse
operations spanning multiple services and geographies. By comparison, TIL Logistics is:
§
relatively small with an equity value of NZ$122.2 million implied by the terms of the Proposed
Acquisition. This compares to an average equity value across the listed companies of nearly NZ$6.8
0
5
10
15
20
25
TIL
Australian &
NZ Median
Fliway
Lindsay
Australia
Freightways
Mainfreight
Asia
-
medi a n
North
America
-
medi a n
Europe &
Scandi
-
medi a n
Forecast EBIT Multiples
New Zealand& A ust r a l i a n
Median inother regions
0
5
10
15
20
25
TIL
Australian &
NZ Median
Fliway
Lindsay
Australia
Freightways
Mainfreight
Asia
-
medi a n
North
America
-
medi a n
Europe &
Scandi
-
medi a n
Forecast EBIT Multiples
New Zealand& A ust r a l i a n
Median inother regions

33
billion
13
. Larger companies tend to trade at higher multiples than smaller companies reflecting greater
diversification and economies of scale; and
§
primarily focused on the New Zealand domestic freight and bulk-haul market. Many of the comparable
listed companies have diversified service offerings across multiple geographies or have substantial
market share in their primary market segments and geographies. Grant Samuel would expect TIL
Logistics to trade at a discount to the large international companies due to its focus on the New Zealand
market.

The following companies are smaller than or of proximate size to TIL Logistics:
§
Fliway Group Limited (Fliway), which generates approximately two thirds of its earnings from domestic
freight transport in New Zealand and one third from international freight. Fliway has a fleet of over 150
vehicles, 12 branches and 5 warehouses employing 400 people. Fliway recently announced that it had
entered into a Scheme Implementation Agreement with Yang Kee Logistics Pte Limited (Yang Kee).
Fliway’s current trading multiple reflects the takeover offer (see section 7.2.2 for more details). Fliway’s
financial performance has recently been impacted by the loss of a major customer, the Kaikoura
earthquake and higher freight costs;
§
CTI Logistics Limited (CTI), a Perth based provider of transport and logistics services. CTI is trading at a
multiple of 8.6 times historical EBITDA. CTI’s historical EBIT multiple is high (20.2 times) and not
considered meaningful for comparison. The company is not covered by any brokers and forecast
multiples are therefore not calculable;
§
Lindsay Australia Limited (Lindsay Australia) an integrated transport, logistics and rural supply company
with a specific focus on the fresh produce sector on the Eastern seaboard of Australia. The company is
trading at multiples of 5.4 times forecast EBITDA and 12.2 times forecast EBIT; and
§
K&S Corporation Limited (K&S) provides transport services in Australia and New Zealand and bulk
haulage of fuel, with the Australian transport business contributing approximately 80% of EBITDA. The
company is trading at a multiple of 5.8 times historical EBITDA. K&S’s historical EBIT multiple is very
high (19.9 times) and not meaningful for comparison purposes.

The two other notable listed transport and logistics companies in Australasia trade at higher multiples,
although at the lower end for companies with global operations, reflecting their large size and more
dominant positions in their primary segments of the market:
§
Freightways Limited (Freightways), which generates nearly three quarters of its earnings from express
package and business mail deliveries and the remaining one quarter from information management
services (such as document storage and destruction). Freightways is trading at multiples of 12.3 times
forecast EBITDA and 14.2 times forecast EBIT; and
§
Mainfreight Limited (Mainfreight), which provides end-to-end freight services in Australasia, North
America, Europe and Asia. Nearly three quarters of its EBITDA is generated by domestic activities (in
continent) and the remaining third from air and ocean services. Mainfreight is trading at multiples of
12.3 times forecast EBITDA and 15.6 times forecast EBIT.

The following points should also be noted when reviewing the graphs above:
§
the median forecast EBITDA and EBIT multiples for all companies not headquartered in either New
Zealand or Australia are 12.6 times and 18.9 times respectively. The trading multiples of the
Europe/UK/Scandinavian based companies are high (at a median of 18.3 times forecast EBITDA and 22.6
times forecast EBIT). Companies involved in international freight typically trade at higher multiples than
domestic freight businesses. The Europe/UK/Scandinavian companies are primarily air & ocean freight
businesses which may account for why the multiples are consistently higher. All companies included in
the analysis are forecast to achieve strong earnings growth according to broker forecasts;
§
the multiples are based on closing share prices as at 7 November 2017. The share prices, and therefore
the multiples, do not include a premium for control. Shares in a listed company normally trade at a
discount to the underlying value of the company as a whole;
§
the companies selected have varying financial year ends. The data presented above is the most recent
annual historical result plus the subsequent forecast year based on the median broker estimates; and
_______________________________________________________________________________________________________________________________________________________
13
Excludes DSV which has a market capitalisation of $124 billion.

34
§
there are considerable differences between the operations and scale of the comparable companies
when compared with TIL Logistics. Differences in regulatory environments, share market and broader
economic conditions, taxation systems and accounting standards hinder comparisons.

7.2.2 Transactions in the Freight and Logistics Industry
The multiples implied by the pricing of the Proposed Acquisition can be considered having regard to the
earnings multiples implied by the price at which broadly comparable companies and businesses have
changed hands. A selection of recent transactions involving freight and logistics businesses is set out below:
RECENT TRANSACTION EVIDENCE – HISTORICAL EBITDA MULTIPLE

Source: Grant Samuel analysis and Capital IQ

RECENT TRANSACTION EVIDENCE – HISTORICAL EBIT MULTIPLE
14


Source: Grant Samuel analysis and Capital IQ


_______________________________________________________________________________________________________________________________________________________
14
The TIL historical EBIT multiple has been adjusted to reflect the depreciation and amortisation that would be incurred under the change of ownership.
0
2
4
6
8
10
12
14
TIL
Average Freight
Transport, Forwarding
...
Median Freight Transport,
Forwarding & Intermodal
Average Logistics
Median Logistics
Barr
-
Nunn Transportation
Scott
Truckload business of
XPO Logistics
Gordon Trucking
Wim Bosman
InterBulk Group
Swift Transportation
Fliway
Unifeeder
Norbert Dentressangle
Pacer
Toll Holdings
Historical EBITDA Multiples
0
5
10
15
20
25
TIL (adjusted)
Average Freight
Transport, Forwarding
...
Median Freight
Transport, Forwarding
...
Average Logistics
Median Logistics
Barr
-
Nunn
Transportation
Unifeeder
Scott
Fliway
InterBulk Group
Gordon Trucking
Swift Transportation
Pacer
Norbert Dentressangle
Toll Holdings
Historical EBIT Multiples

35
The following points are relevant when reviewing the graphs above:
the implied EBITDA and EBIT multiples of the transaction evidence varies significantly depending on
the size and nature of the target business and the growth characteristic and the synergies available to
purchasers. The implied multiples, particularly EBIT multiples, can vary due to differing degrees of
capital intensity and whether depreciation is a good proxy for ongoing capital expenditure. Care
therefore needs to be exercised when interpreting the multiples implied by the transaction evidence;
Grant Samuel has categorised the target companies based on whether their primary activities are in
domestic freight transport/forwarding and logistics. Due to the nature of TIL Logistics, Grant Samuel
has primarily focused on the former two categories, with a higher degree of focus on freight transport,
domestic forwarding and intermodal businesses as this represents the larger proportion of TIL
Logistics’ revenue;
Transactions involving freight transport, domestic forwarding and intermodal businesses
on 25 October 2017 Fliway announced that it had entered into a Scheme Implementation Agreement
with Yang Kee, one of Singapore’s largest privately owned logistics companies with operations in
Australia, the United States, China and South East Asia. Under the scheme, Yang Kee will acquire all
of the shares for NZ$1.22 cash per share. The purchase price implies multiples of 7.6 times historical
EBITDA and 7.8 times forecast EBITDA (broker consensus) and multiples of 10.7 times historical EBIT
and 11.1 times forecast EBIT (broker consensus);
transactions involving large target companies have tended to transact at higher multiples than smaller
companies reflecting a range of factors including their attractiveness to the acquirer, the strategic
nature of these transactions and the strong market positions of these targets in their primary business
segments. Recent notable transactions involving large transport businesses include:
• the merger of Swift Transportation Company and Knight Transportation Inc. at a combined
enterprise value of approximately US$6 billion (implied multiple of 14.4 times historical EBIT).
This transaction created the largest truckload transport company in North America;
• the acquisition by XPO Logistics Inc. (XPO) of Norbert Dentressangle S.A. for an enterprise value
of US$3.6 billion (implied multiple of 15.4 times forecast EBIT). The transaction represented a
significant expansion of XPO into the European market; and
• the acquisition by Japan Post Bank Co Ltd (Japan Post) of Toll Holdings Limited (Toll) for an
enterprise value of approximately A$8.1 billion (implied multiple of 17.8 times EBIT). The
acquisition represented a key step for Japan Post in its strategy to become a global logistics
player;
the average implied historical EBITDA multiple for all transactions involving freight transport, domestic
forwarding and intermodal businesses was 7.4 times. The average decreases to 5.8 times excluding
the three larger transactions described above. Grant Samuel has placed only limited reliance on the
average implied multiple of forecast EBITDA of 10.1 times as it only includes three transactions
(including both the Norbert Dentressangle and Toll transactions). The average implied historical EBIT
multiple was 13.9 times, however the range of multiples is wide, ranging from ~8 to ~20 times EBIT;
Transactions involving logistics businesses
transactions involving targets that are primarily logistics businesses span a wide range of implied
multiples with an average historical EBITDA multiple of 8.3 times;
the transactions include a number of logistics businesses that are primarily focused on one (or a
limited number) of sectors. Examples include the acquisition by electronics conglomerate LG
International of Pantos Logistics Co Ltd (Pantos), Pantos’ acquisition of Hi Logistics, a logistics business
previously owned by LG International, and Shinhung Delta Tech’s acquisition of Shinhung Global – all
of these companies were headquartered in South Korea. The average implied multiples for these
three transactions was 5.9 times historical EBITDA and 6.9 times historical EBIT; and
a large recent transaction in the US logistics sector was XPO’s acquisition of Con-way Inc. for an
enterprise value of US$3.1 billion. Con-way operates a large number of warehouses throughout North
America plus a transport fleet. The purchase price implied multiples of 5.5 times forecast EBITDA and
9.7 times forecast EBIT.

36

Brief descriptions of the transactions and a detailed table of the comparable transaction evidence
summaries above is provided in Appendix 2.

7.3 Conclusion
The multiples implied by the pricing of the Proposed Acquisition are consistent with market evidence.

37
8 Valuation Summary and Certification
8.1 Valuation for the Purpose of Rule 57
As outlined in section 3.1.2 under Rule 57 (1) of the Takeovers Code an Independent Adviser’s Certificate is
required to certify that the cash sum proposed as consideration for the acquisition of shares under the
Voluntary Acquisition is fair and reasonable.

The Bethunes assets and liabilities (excluding the NZX Bond) as at 30 September 2017 have been transferred
into New BIL. Therefore, the valuation for the purposes of Rule 57 relates to the value of the Acquired
Assets, which is the value of TIL Logistics (the renamed Bethunes listed entity).

Grant Samuel has valued TIL Logistics in the range of $110.0 million to $126.0 million which corresponds to
a value of $1.39 to $1.59 per share. The valuation is summarised below:
TIL LOGISTICS VALUATION SUMMARY

$ MILLION EXCEPT WHERE OTHERWISE STATED LOW HIGH
Enterprise Value of TIL Logistics 192.0 208.0
Net debt for valuation purposes (82.0) (82.0)
Equity Value 110.0 126.0
Fully diluted shares on issue after first tranche of the Private Placement (million) 79.1 79.1
Value per share $1.39 $1.59

Rule 57 of the Code specifies that the fair and reasonable value of an equity security (in this case the
ordinary shares of TIL Logistics is to be calculated by assessing the value of all securities in that class in the
relevant company and then pro-rating that value across those securities). The impact of this provision of
the Code is that there is no minority discount to be attributed to the value of the TIL Logistics shares offered
to be acquired under the Acquisition Notice.

Grant Samuel has adopted net debt for valuation purposes at $82.0 million as summarised below:
TIL LOGISTICS NET DEBT ($MILLIONS)
15


Debt drawn down on settlement
87.8
Share of debt in Associates 2.2
First tranche of the Private Placement (8.0)
Net debt for valuation purposes 82.0
8.2 Preferred Methodology
Grant Samuel’s valuation of TIL Logistics has been estimated on the basis of fair market value as a going
concern, defined as the estimated price that could be realised in an open market over a reasonable period
of time assuming that potential buyers have full information. The valuation of TIL Logistics is appropriate
for the acquisition of the company as a whole and accordingly, incorporates a premium for control. The
value is in excess of the level at which, under current market conditions, shares in TIL Logistics could be
expected to trade on the share market. Shares in a listed company normally trade at a discount of 15% -
25% to the underlying value of the company as a whole, but the extent of the discount (if any) depends on
the specific circumstances of each company.


_______________________________________________________________________________________________________________________________________________________
15
Estimated at the date of Completion.

38
The most reliable evidence as to the value of a business is the price at which the business or a comparable
business has been bought and sold in an arm’s length transaction. In the absence of direct market evidence
of value, estimates of value are made using methodologies that infer value from other available evidence.
There are four primary valuation methodologies commonly used for valuing business:
§
Capitalisation of earnings or cash flow,
§
Discounting of projected cash flows,
§
Industry rule of thumb; and
§
Estimation of the aggregate proceeds from an orderly realisation of assets.

Each of these valuation methodologies has application in different circumstances. The primary criterion for
determining which methodology is appropriate is the actual practice adopted by purchasers of the type of
business involved. A detailed description of each of these methodologies is outlined in Appendix 3.
Preferred Approach
Grant Samuel has placed primary reliance on the capitalisation of earnings approach to value TIL Logistics.
The capitalisation of earnings approach is appropriate for valuing TIL Logistics because the company has
relatively stable cash flows, and a predictable capital expenditure profile.
8.3 Earnings Multiples Analysis:
Grant Samuel has valued TIL Logistics on an un-geared basis in the range of $192 - $208 million. This range
implies the following multiples:
TIL LOGISTICS IMPLIED MULTIPLES


EARNINGS FOR
VALUATION
(NZ$ MILLIONS)
LOW
MULTIPLES
HIGH
MULTIPLES
Multiple of EBITDA – year ended 30 June 2017
26.2 7.3 7.9
Multiple of EBITDA – year ending 30 June 2018
29.2 6.6 7.1
Multiple of EBIT – year ended 30 June 2017 11.5 16.7 18.1
Multiple of EBIT – year ending 30 June 2018 15.8 12.1 13.1

The valuation of TIL Logistics has been considered fair in regard to the earnings multiples implied by the
price at which businesses in the transport and logistics sector have changed hands and the share market
ratings of the listed transported logistics companies. An analysis of the comparable transactions and
companies are shown in section 7.2 of this report. Please see section 7.1 for a summary of the adjusted
earnings for valuation.
8.4 Certification of Fairness and Reasonableness
The Dominant Owner has advised that it will specify under the Acquisition Notice that the cash sum
proposed as consideration for the acquisition of shares under the Voluntary Acquisition is $1.50 per share.

The consideration offered is within Grant Samuel’s valuation range of $1.39 to $1.59 per share. Grant
Samuel certifies that, for the purposes of Rule 57 of the Takeovers Code, the consideration is fair and
reasonable.

39
9 Assessment of the Merits of The Proposed Acquisition, Private Placement and TIL In-Specie
Distribution
9.1 Summary
Bethunes shareholders are being asked to vote on a number of resolutions related to transactions involving
the Proposed Acquisition, the Private Placement and the TIL In-Specie Distribution. Bethunes shareholders
have four main options in regard to their voting and subsequent actions. They can either:
§
vote in favour of the resolutions approving the Proposed Acquisition, the Private Placement and TIL In-
Specie Distribution in which case Bethunes will become the listing vehicle for TIL and their existing
investment in Bethunes will become an investment in TIL Logistics. Existing shareholders of Bethunes
will hold only 0.56% of the shares of TIL Logistics. However, existing Bethunes shareholders will also
become shareholders in New BIL. New BIL holds the existing assets and liabilities of Bethunes (other
than a $75,000 NZX Bond). If Bethunes shareholders vote in favour of the Proposed Acquisition, the
Private Placement and TIL In-Specie Distribution they will retain a shareholding in TIL Logistics and retain
their proportionate ownership of Bethunes (before the Proposed Acquisition excluding the $75,000 NZX
Bond) via a shareholding in New BIL; or
§
vote against the resolutions regarding the Proposed Acquisition, the Private Placement and TIL In-Specie
distribution in which case, if the resolutions are not approved, Bethunes will continue to be a very small
listed company seeking new investments. There is no certainty regarding if or when new investment
opportunities will arise. Bethunes will continue to incur the costs of operating as a listed company
(including listing fees, audit fees and directors’ fees) and searching and evaluating potential investment
opportunities. In addition, Bethunes will incur approximately $200,000 of transaction costs (almost half
of Bethunes’ net assets) arising from the Proposed Acquisition; or
§
vote in favour of the resolutions approving the Proposed Acquisition, the Private Placement and TIL In-
Specie distribution and then elect to be acquired by the Dominant Owner under the Voluntary
Acquisition at $1.50 per share (on a consolidated basis). Under this alternative, existing shareholders of
Bethunes will receive $1.50 per share under the Voluntary Acquisition and retain their proportionate
ownership of Bethunes (before the Proposed Acquisition excluding the $75,000 NZX Bond) via a
shareholding in New BIL; or
§
vote against the resolutions regarding the Proposed Acquisition and the Private Placement and elect for
their individual shareholding to be acquired by Bethunes under the minority buy out rights provisions
provided for under the Companies Act. Under this alternative, if the resolutions are approved, existing
shareholders of Bethunes will retain their proportionate ownership of Bethunes (before the Proposed
Acquisition excluding the $75,000 NZX Bond) via a shareholding in New BIL and receive the
proportionate ownership of the NZX bond which equates to be $0.0007 per share (pre consolidation) or
$0.17 per share on a consolidated basis.

If the resolutions are not passed, it is likely that Bethunes will need to raise further capital to enable it to
cover its operating expenses, the costs associated with being a listed entity and to research and evaluate
acquisition opportunities, or the company will need to be liquidated. The Bethunes Directors have stated
their intention to raise $10 million of new capital to fund its investment programme and existing Bethunes
shareholders will have the right to participate in this capital raising. If existing Bethunes shareholders do
not participate in the future capital raising, their shareholding in Bethunes will be significantly diluted.

40
9.2 Merits of the Proposed Acquisition
9.2.1 The Valuation of the Proposed Acquisition
Grant Samuel has assessed the price being paid for TIL Logistics by reference to the multiples implied by
comparable market evidence.

The multiples implied by the pricing of the Proposed Acquisition is consistent with market evidence.

9.2.2 The Rationale of the Proposed Acquisition
Since becoming a listed shell, Bethunes has considered reverse listing opportunities to present to its
shareholders while seeking investment opportunities. The Proposed Acquisition and related transactions,
in the opinion of Bethunes Directors, will provide a number of benefits to existing Bethunes shareholders
including:
§
the introduction of substantial assets and business operations into the NZX listed company shell with a
focus on the transport and freight services sector;
§
enabling shareholders to, without dilution, continue to own the current business and assets of Bethunes
through their distributed shareholding in New BIL, as well as holding a shareholding in TIL Logistics at
no cost;
§
the opportunity for New BIL shareholders to participate in the planned capital raise following
completion of the Proposed Acquisition, which would include a rights offering to shareholders to raise
up to $10 million in capital. If the capital raise is successful, this will provide New BIL with the additional
capital needed to fund its investment programme; and
§
TIL Logistics is contributing towards New BIL’s third party costs. If the Proposed Acquisition completes
New BIL will receive $200,000 as a contribution towards the transaction costs and costs to relist New
BIL.

Shareholders have the option of either approving the Proposed Acquisition or rejecting the Proposed
Acquisition in favour of the status quo. Under the status quo, existing shareholders will not have a
shareholding in TIL Logistics and are likely to be asked to participate in a capital raising process to raise $10
million to fund the planned investment programme.

9.2.3 Merits of Approving the Proposed Acquisition
The Proposed Acquisition constitutes a major transaction under section 129 of the Companies Act and the
NZX Listing Rules as, together with the Private Placement and the ASB Debt Facilities, it involves a range of
transactions, all of which are more than half the market value of Bethunes’ assets prior to the these
transactions, which include:
§
the acquisition of the business and assets of TIL and shares in Global which has a value of $200 million
(subject to adjustments for net debt and movements in working capital);
§
entering into the ASB Debt Facilities for the purposes of the Proposed Acquisition and ongoing working
capital requirements, and entering into a cross-guarantee in respect of these facilities; and
§
the Private Placement.

The Proposed Acquisition also requires approval under the NZX Listing Rules as it will change the essential
nature of Bethunes. The Proposed Acquisition therefore requires shareholder approval by way of a special
resolution of Bethunes shareholders requiring approval by 75% of those shareholders eligible to vote and
voting. Current Directors of Bethunes and their associated entities hold approximately 10.9% of the
Bethunes shares on issue and unanimously recommended that shareholders vote in favour of the Proposed
Acquisition and related transactions. If shareholders pass a special resolution approving the Proposed
Acquisition, an investment in Bethunes will effectively become an investment in TIL Logistics.

TIL and new investors will hold or control approximately 99.4% of Bethunes following completion of the
Proposed Transaction. The market value of Bethunes will substantially increase from its current $1.1 million

41
market capitalisation
16
. New BIL also does not have any liability to ASB or any other party under the ASB
Debt Facilities. The Proposed Acquisition does provide upside to Bethunes shareholders in the form of a
shareholding in TIL Logistics and for the short term ensures the continuity of Bethunes in the new form of
New BIL.

9.2.4 Merits of not Approving the Proposed Acquisition
If shareholders do not vote in favour of the Proposed Acquisition neither the Proposed Acquisition nor the
Private Placement will proceed and Bethunes will remain a listed shell company seeking suitable investment
opportunities. As at 30 September 2017, Bethunes had approximately $482,000 of net assets and average
monthly expenditure of approximately $20,000 (excluding one-off transaction costs associated with the
Proposed Acquisition). Bethunes will continue to incur operating expenses in the absence of the Proposed
Acquisition. Bethunes will also incur significant expenses associated with progressing the Proposed
Acquisition if shareholders vote against the Proposed Acquisition. The quantum of the costs of the
transaction is estimated to be approximately $200,000, representing almost half of the Bethunes’ net
assets. These costs include the costs of preparing the Profile of TIL Logistics, NZX fees, the costs of
convening and holding the shareholders’ meeting, directors’ fees and legal fees. In the event the
shareholders do not vote in favour of the Proposed Acquisition, the value of Bethunes will decrease
materially due to the transaction costs that will become payable. Ultimately, it is likely that Bethunes will
need to raise further capital to enable it to cover its operating expenses, the costs associated with being a
listed entity and to research and evaluate acquisition opportunities, or the company will need to be
liquidated. If the Proposed Acquisition does not proceed, shares in Bethunes are likely to trade below the
current share price until another suitable investment is identified. Bethunes shareholders will also be asked
to participate in the proposed $10 million capital raising to fund an investment programme. If existing
shareholders elect to not participate in the proposed capital raising then their existing shareholding will be
significantly diluted.

If the Proposed Acquisition is not approved, it is unlikely that Bethunes will seek to participate in a reverse
listing again.

Shareholders who vote against the Proposed Acquisition will, in the event the Proposed Acquisition
proceeds, be entitled to exercise their minority buy-out rights under the provisions of the Companies Act
by providing written notice to Bethunes within 10 working days of the passing of the special resolution
requiring Bethunes to purchase their shares.

9.2.5 Other Merits of the Proposed Acquisition
The other merits of the Proposed Acquisition include:
§
the consideration paid for the Acquired Assets is summarised below:
ACQUIRED ASSETS CONSIDERATION SUMMARY (NZ$ MILLIONS)

Value of new Bethunes shares issued as consideration to TIL 100.3
Cash consideration, financing via the ASB debt facility 81.0
Price paid to TIL 181.3
Net debt in associates 2.2
Value of new Bethunes shares issued to the Kern Entities 9.7
Cash paid to settle professional fees and transaction costs 6.8
Implied Enterprise Value of TIL Logistics 200.0

As shown above, the fees and costs associated with the Proposed Acquisition as a percentage of the
enterprise value are approximately 8.3% of the implied enterprise value and 14.8% of the equity
raised
17
. These fees are being paid, or have been paid and are being reimbursed, to professional
_______________________________________________________________________________________________________________________________________________________
16
As at 26 October 2017, the date of the market price of Bethunes shares prior to the announcement of the Proposed Acquisition.
17
The value of the entity is based on the value of new Bethunes shares issued as consideration to TIL plus the capital raised in the Private Placement.

42
advisors and service providers, a large portion of which would have been incurred in preparation for the
discontinued IPO and to the principal advisor Kern Group. If the fees and costs are excluded from the
value ascribed to TIL Logistics, the value per share decreases to $1.37. However, as the existing
Bethune’s shareholders shareholding in TIL Logistics will only be 0.56%, the transaction costs are
effectively being paid by the existing shareholders in TIL Logistics;
EQUITY VALUE IMPLIED BY PURCHASE PRICE POST ACQUSITION (EXCLUDING TRANSACTION COSTS) (NZ$ MILLIONS)

Total consideration paid for the Acquired Assets and value ascribed to Bethunes 200.7
Less value ascribed to Bethunes (0.7)
Less professional fees and transaction costs (6.8)
Less value of new Bethunes shares issued to the Kern Entities (9.7)
Less cash consideration, financing via the ASB debt facility (81.0)
Less net debt in associates (2.2)
Plus capital raised via the Private Placement 11.5
Equity value of TIL Logistics 111.8
Shares on issue (millions) 81.5
Value per share $1.37

§
the price at which the shares will ultimately trade on-market after the completion date will depend on
a range of factors, including New Zealand and global equity market conditions; and
§
at Completion, and prior to the Employee/Director-Designate Transfer, TIL Logistics will be tightly held
with TIL and the TIL Principals holding approximately 88.2% of the company. The Kern Group and the
Kern Entities, will hold approximately 8.3% of the listed company. The shareholding by entities
associated with the Kern Group (being the Kern Entities) were allotted a shareholding in Global to
provide the Kern Entities with an interest in the IPO transaction if it proceeded. The Kern Group will
also receive a fee for the financial services if the Proposed Acquisition is completed. The Kern Group
and Kern Entities believes there is further value creation to be achieved through industry consolidation
and therefore it is unlikely that it will sell its shareholding in the short to medium term. Given the
limited free float and the stated intentions of the Kern Group and Kern Entities, the liquidity of the TIL
Logistics shares on the NZX will be limited in the short term. TIL has stated that it plans to transfer (for
no consideration) shares to approximately 600 employees and owner drivers. This will increase the
number of shareholders and may marginally improve the liquidity of TIL Logistics shares.
9.3 Merits of the Private Placement
Of the $200 million purchase price for the Proposed Acquisition, $11.5 million will effectively be funded via
the Private Placement. The Private Placement requires the approval by 75% of shareholders of Bethunes
that are entitled to vote and voting under the Companies Act and NZX Listing Rules and by way of an
ordinary resolution requiring approval by 50% of shareholders that are entitled to vote and voting under
the Takeovers Code.

9.3.1 The Price of the Private Placement
The shares issued in consideration of the $11.5 million of capital raised from participating investors (see
section 2.5) are being issued at $1.50 per share. In evaluating the fairness of this issue price, Grant Samuel
has had regard to:
§
the market price of Bethunes shares prior to the announcement of the Proposed Acquisition on 26
October 2017 (adjusted for the 254 for 1 share consolidation), $2.54; and
§
the price of the shares being issued under the Private Placement, $1.50.

The market price of Bethunes shares prior to the announcement of the Proposed Acquisition is irrelevant
under the structure of the Proposed Acquisition and related transactions. If the Proposed Acquisition is
approved by shareholders Bethunes will distribute the shares in New BIL, to which Bethunes has transferred
it net assets (other than its $75,000 NZX Bond), to existing Bethunes shareholders prior to Completion.

43
Therefore, the current listed market value of Bethunes is not relevant to the entity for which the shares are
being issued in as this value will be retained by the existing Bethunes shareholders in New BIL. The valuation
of the shares being issued represents the value TIL and Global shareholders place on the company as an
investment shell that will be utilised in the reverse listing. The share price set is a negotiated outcome
between TIL, Global shareholders and Bethunes’ directors and there is limited comparable information to
assess a market value of a listed shell entity. It is also the same price at which Bethunes shareholders can
sell their shares to the Dominant Owner.

This issue price is consistent with the share valuation being applied to all shares issued in the transaction.

9.3.2 Other Merits of the Private Placement
The other merits of the Private Placement include:
§
$8.65 million of the funds raised by the Private Placement will be used to repay a portion of ASB Debt
Facilities. After the Private Placement, TIL Logistics’ net debt will be approximately $78.5 million. A
lower level of gearing in TIL due to the Private Placement, reduces the risk for all shareholders including
existing Bethunes shareholders; and
§
the majority of the investors participating in the Private Placement have an existing business or
professional relationship with TIL, the large majority of which are shareholders in TIL or the Kern Entities.
The potential shareholding outcomes of the Proposed Acquisition and Private Placement are outlined
in section 2.5.
9.4 Fairness of the Proposed Transaction for the purposes of the NZX Listing Rules
In Grant Samuel’s opinion, based on the analysis of the merits outlined above, the terms of the Proposed
Transaction are fair and reasonable to the shareholders of Bethunes not associated with TIL and Global and
the Proposed Transaction is in the best interests of Bethunes given the options reasonably available to
Bethunes at the current time. In Grant Samuel’s opinion, the information provided by Bethunes to its
shareholders is sufficient to enable holders to understand all the relevant factors, and make an informed
decision. Grant Samuel has obtained all information which it believes desirable for the purposes of
preparing the report, including all relevant information which is or should have been known by any director
of Bethunes and made available to the directors.
9.5 Merits of the TIL In-Specie Distribution
The TIL In-Specie Distribution is the first step, in potentially a series of steps, that is proposed and involves
the shares that TIL will own on completion of the Proposed Acquisition being distributed to its direct and
indirect shareholders. After the Proposed Acquisition and Private Placement, Bethunes shareholders will
hold 0.56% of TIL Logistics shares. The proportion of Bethunes shareholders’ ownership of TIL Logistics is
not impacted by the TIL In-Specie Distribution. The TIL In-Specie Distribution has no major impact on
Bethunes shareholders.
9.6 Merits of the Voluntary Acquisition
The Dominant Owner (being TIL, TIL Principals and Kern Persons) will hold 96.6%
18
of TIL Logistics after the
Proposed Acquisition, Private Placement and before the TIL In-Specie Distribution. Under the Takeovers
Code, the Dominant Owner must offer Bethunes shareholders the right to sell their shares in Bethunes to
the Dominant Owner. The value the Dominant Owner has determined to acquire the shares in Bethunes
is $1.50 per share (on a consolidated basis). Grant Samuel certifies that, for the purposes of Rule 57 of the
Takeovers Code, the consideration is fair and reasonable. If Bethunes shareholders do not want to
participate in the Proposed Acquisition, they should, in Grant Samuel’s opinion, not exercise their minority
buy-out rights and elect to be acquired by the Dominant Owner under the Voluntary Acquisition.

_______________________________________________________________________________________________________________________________________________________
18
This assumes the Employee/Director-Designate Transfer has not taken place.

44
9.7 The Minority Buy Out Rights
Section 112 (2) of the Companies Act states the value of the buy out rights must be a fair and reasonable
price (as at the close of business on the day before the date on which the resolution was passed) for the
shares held by the shareholder. Bethunes has declared a pro rata in-specie distribution of the New BIL
shares to existing Bethunes shareholders, conditional on Bethunes’ shareholders approving the resolutions
set out in the Notice of Meeting. The record date for that distribution is two business days before the
resolutions are due to be passed, meaning that the Bethunes shares will be ex-dividend on the day before
the date on which the resolution will be passed. Accordingly, the Bethunes shares will no longer carry an
entitlement to the New BIL shares distribution on the date of the valuation and the only asset Bethunes will
have at the date of valuation for the purposes of the minority buy out provisions is the $75,000 NZX bond
(i.e. after the record date for the New BIL shares distribution and before the acquisition of the business and
assets of TIL and Global shares).

A Bethunes shareholder who elects to be acquired under the minority buy out provisions would receive
their proportionate ownership of the NZX bond which equates to be $0.0007 per share (pre consolidation)
or $0.17 per share on a consolidated basis and retain ownership of the New BIL share which they will
receive.

If Bethunes shareholders do not want to participate in the Proposed Acquisition, they should not, in Grant
Samuel’s opinion exercise the minority buy-out rights as they will lose the right for their Bethunes shares
to be acquired by the Dominant Owner for $1.50 per share (on a consolidated basis) and therefore their
proportion of the TIL Logistics value under the Proposed Acquisition. Bethunes shareholders that do not
want to participate in the Proposed Acquisition are better off exercising the right to be acquired by the
Dominant Owner under the Voluntary Acquisition and retain their proportionate shareholding in New BIL.
9.8 An investment in Bethunes
As with any equity investment there are risks associated with the market in which the company operates.
The risks associated with an investment in Bethunes include:
§
Bethunes is currently a listed shell company seeking an appropriate investment opportunity. If the
Proposed Acquisition does not proceed Bethunes will continue to operate as a listed shell company
incurring an average of $20,000 in operating costs per month and diminishing net assets. It is likely that
shareholders will be asked to participate in a $10 million capital raising to fund the planned investment
programme. There is no certainty that suitable alternative investment opportunities will be found and
ultimately Bethunes will run out of cash to fund its operations;
§
If the Proposed Acquisition proceeds, existing Bethunes shareholders will have a shareholding in TIL
Logistics which has its own inherent risks including:
• loss of key customers. Many of TIL Logistics’ contracts with customers are subject to tender and
renewal processes and there is a risk that TIL Logistics may not be successful in tender or contract
renewal processes or will be unable to renew any contract on the same or better terms;
• reduction in revenue due to the customer’s underlying business performance and general
economic conditions;
• integration risks associated with the recent acquisition of MOVE Logistics and NZL; and
• the reliance on New Zealand’s transport infrastructure. TIL Logistics depends on the ongoing
fitness and availability of New Zealand’s transport infrastructure such as roads and ferries. As
evidenced by the impact of the recent Kaikoura earthquake, events causing significant disruption
to New Zealand’s transport infrastructure can occur and do impact on the performance of
companies operating in the sector.

The benefits and opportunities associated with an investment in Bethunes include:
§
the benefit of investing in Bethunes in its current form is the potential of securing a shareholding in a
future reverse listing opportunity and to secure rights to the planned capital raising by New BIL. As
there is no certainty such an investment will be forthcoming (if the Proposed Acquisition is not
approved), this benefit has limited value;
§
if the Proposed Acquisition proceeds, existing Bethunes shareholders will have a shareholding in TIL
Logistics which has its own inherent benefits and opportunities including:

45
• TIL is one of New Zealand’s largest domestic freight and logistics platform with a nationwide
network of branches, depots and warehouses which, until now, has been privately owned. The
Proposed Acquisition provides Bethunes shareholders with the opportunity to have a
shareholding in TIL Logistics;
• TIL Logistics’ (the renamed listed entity) proposed Board have stated that the dividend will be
between 50% and 70% of net profit after tax. The current forecast assumes the first dividend
will be paid in September 2018;
• TIL has a history of successful business acquisitions. TIL’s management has identified a number
of targets and are currently investigating these possibilities. If TIL management can acquire
smaller competitors at favourable valuations and integrate these businesses successfully this will
be value accretive to shareholders in Bethunes;
• there is the possibility of offshore expansion, either organically or via acquisition; and
• the attractiveness of Bethunes as a takeover target will be enhanced.
9.9 Acceptance or Rejection of the Proposed Acquisition and the Private Placement
Acceptance or rejection of the Proposed Acquisition and the Private Placement is a matter for individual
shareholders based on their own view as to value and future market conditions, risk profile, liquidity
preference, portfolio strategy, tax position and other factors. In particular, taxation consequences will vary
widely across shareholders. Shareholders will need to consider these consequences and, if appropriate,
consult their own professional adviser(s).

GRANT SAMUEL & ASSOCIATES LIMITED
17 November 2017

46
Comparable Listed Companies

The multiples implied by the pricing of the Proposed Acquisition can be considered having regard to the earnings
multiples implied by the share market prices of listed international companies with operations in the freight and
logistics industry. While none of these companies are precisely comparable to TIL Logistics, the share market
data provides some framework within which to assess the Proposed Acquisition price:

SHARE MARKET RATINGS OF LISTED FREIGHT AND LOGISTICS COMPANIES

EBITDA MULTIPLE (TIMES) EBIT MULTIPLE (TIMES)
DATE
MARKET
CAPITALISATION
(NZ$ MILLIONS)
HISTORICAL FORECAST HISTORICAL FORECAST
Australia and New Zealand
CTI Logistics 85 8.6 n.a. 20.2 n.a.
Freightways 1,195 13.5 12.3 15.5 14.2
Fliway Group 54 7.5 7.6 10.4 10.9
K&S Corporation 237 5.8 n.a. 19.9* n.a.
Lindsay Australia 137 6.2 5.4 16.5 12.2
Mainfreight 2,482 13.6 12.3 17.4 15.6
Group average 9.2 9.4 16.9 13.2
Group median 8.0 10.0 16.7 13.2
North America
CH Robinson 16,380 13.7 14.7 14.9 16.5
Expeditors 16,259 14.2 14.5 15.2 14.9
J.B. Hunt Transport 16,972 12.0 12.3 18.1 19.2
Old Dominion 14,482 14.8 12.9 20.7 17.4
Landstar
6,003 15.4 14.2 17.9 16.5
Knight-Swift 9,934 nm 10.5 nm 25.0
Werner Enterprises 3,666 7.7 7.2 20.6 18.0
Heartland Express 2,568 9.0 9.8 20.1 24.9
Hub Group 2,196 10.4 12.6 14.0 20.4
Universal Logistics 883 10.0 10.2 17.9 22.3
Group average 11.9 11.9 20.8 19.5
Group median 12.0 12.5 18.0 18.6
Europe, UK and Scandinavia
Kuehne + Nagel 29,964 17.9 17.2 21.7 20.9
Bollore 19,896 15.9 15.2 25.9 24.3
DSV 132,297 23.0 17.7 28.1 20.6
Panalpina 4,761 18.8 19.9 27.2 28.0
Group average 18.9 17.5 25.7 23.4
Group median 18.3 17.4 26.6 22.6
Asia
Kerry Logistics 3,513 10.6 9.1 13.7 11.5
Sinotrans 3,501 9.4 8.9 13.2 11.2
Kinetsu 1,867 10.4 9.2 18.9 16.4
Group average 10.1 9.1 15.3 13.0
Group median 10.4 9.1 13.7 11.5

Average - All 12.2 12.1 19.9 18.1
Median - All 11.3 12.3 18.1 17.4
Source: Grant Samuel analysis

47
* denotes outliers. n.a. means not available. nm means not meaningful.
Australia and New Zealand:
CTI Logistics Limited
CTI Logistics Limited (CTI) provides transport and logistics services in Australia. It operates through three
segments: Transport, Logistics, and Property. The services provided by the Transport segment include freight
forwarding, heavy haulage and warehousing and distribution. CTI is headquartered in Perth, Australia.
Freightways
Freightways Limited’s (Freightways) main business is the provision of express package and business mail services
primarily in New Zealand and Australia. It also provides information management services such as document
destruction. The company provides network courier services, point-to-point courier services, a secure service for
valuables and various postal services. Services are offered through its network as well as through alliances with
international express package operators. The company is headquartered in Auckland, New Zealand.
Fliway Group
Fliway Group Limited (Fliway) operates as a transport and logistics company in New Zealand. The company offers
domestic supply chain, and international air and ocean freight services. Fliway’s activities include transporting
and warehousing freight; and coordinating the movement of freight, including arranging customs clearance and
associated border clearance activities. The company operates a fleet of approximately 170 vehicles and provides
services through 11 branches and 5 warehouses. Fliway is based in Auckland, New Zealand.
K&S Corporation
K&S Corporation Limited (K&S) provides transportation and logistics, contract management, warehousing,
distribution and fuel distribution services primarily in Australia and New Zealand. The company conducts its
operations through three divisions, Australian Transport, Fuels, and New Zealand Transport. K&S generates
approximately 80% of its EBITDA from its Australian Transport operations. The company is headquartered in
Victoria, Australia.
Lindsay Australia
Lindsay Australia Limited (Lindsay Australia) provides transport, logistics, and rural supply services to the food
processing, food services, fresh produce, rural, and horticultural sectors in Australia. It operates through
Transport and Rural segments. The Transport segment is involved in the cartage of general and refrigerated
products, and ancillary sales. The Rural segment sells and distributes a range of agricultural supply products. The
company is headquartered in Brisbane, Australia.
Mainfreight
Mainfreight Limited (Mainfreight) provides supply chain logistics solutions in New Zealand, Australia, the
Americas, Europe and Asia. It offers a range of logistics services, including warehousing and supply chain
management, domestic distribution and international air and ocean freight operations. Its divisions include
Domestic Freight, International Freight and Forwarding (including customs brokerage), Logistics (including
warehousing and inventory management) and Supply Chain Technology (including mainchain portals and freight
management). Mainfreight generates approximately three quarters of its EBITDA from domestic (in continent)
services and the remaining quarter from air and ocean services.
North America:
CH Robinson
C.H. Robinson Worldwide, Inc. (CH Robinson), a third party logistics company, provides freight transportation
services and logistics solutions to companies in various industries worldwide. It is present in 38 countries and has
over 11,520 employees. CH Robinson offers services including truckload (time-definite and expedited)
transportation services, less than truckload services, intermodal transportation and non-vessel ocean common

48
carrier or freight forwarding services as well as organising air shipments and providing door-to-door services.
The company is headquartered in Minnesota, USA.
Expeditors
Expeditors International of Washington, Inc. (Expeditors) is a global freight forwarding and logistics company.
The company’s operations include air freight services, ocean freight services and other logistical solutions. It
operates in North America, Latin America, the Asia Pacific, Europe, Africa, the Middle East and India. Expeditors
is headquartered in Washington, USA.
J.B. Hunt Transport
J.B. Hunt Transport Services, Inc. (JB Hunt) provides transportation and delivery services in the United States,
Canada and Mexico. The company’s primary division is Intermodal Transport which accounts for approximately
two thirds of revenue. Other divisions are Contract Services, Integrated Capacity Solutions and Full-Load Dry-
Van. JB Hunt is headquartered in Arkansas, USA.
Old Dominion
Old Dominion Freight Line, Inc. (Old Dominion) operates as a less-than-truckload motor carrier in North America.
The company provides regional, inter-regional and national less-than-truckload services, including ground and
air expedited transportation and consumer household pickup and delivery. The company also offers various
value added services including international freight forwarding, container drayage, truckload brokerage, supply
chain consulting and warehousing. Old Dominion is headquartered in North Carolina, USA.
Landstar
Landstar System, Inc. (Landstar) provides integrated transportation management solutions in the United States
and internationally. The company operates through two divisions, Transportation Logistics and Insurance.
Transportation Logistics provides transportation services, including truckload and less-than-truckload
transportation, rail intermodal, air cargo, ocean cargo, expedited ground and air delivery and customs brokerage.
Landstar offers truck services through dry and specialty vans, unsided/platform trailers, temperature-controlled
vans and containers. Insurance reinsures certain risks of the company’s independent contractors. Landstar is
headquartered in Florida, USA.
Knight-Swift Transportation Holdings Inc.
Knight-Swift Transportation Holdings Inc. (Knight-Swift) provides truckload transportation and logistics services
in North America. Knight-Swift derives approximately 80% of its revenues from trucking services and 20% from
logistics services. Following the US$6 billion merger of Knight Transportation and Swift Transportation in April
2017 Knight-Swift is the largest trucking company in North America with 23,000 tractor units and 77,000 trailer
units. Knight-Swift is headquartered in Arizona, USA.
Werner Enterprises
Werner Enterprises, Inc. (Werner Enterprises) is a transportation and logistics company that hauls truckload
shipments of general commodities interstate and intrastate in the United States, Mexico, Canada, China and
Australia. The company operates through two divisions, Truckload Transportation Services, which accounts for
approximately 80% of revenue and Value Added Services, which accounts for approximately 20% of revenue.
Werner is headquartered in Nebraska, USA.
Heartland Express
Heartland Express, Inc. (Heartland Express) operates as a short-to-medium-haul truckload carrier of general
commodities in the United States and Canada. The company provides dry van truckload services through its
regional terminals and transports freight for shippers using owned and leased equipment and independent
contractor tractors. It also provides temperature-controlled truckload, dedicated truckload and freight
brokerage services. Heartland Express primarily serves retailers and manufacturers. Heartland Express is
headquartered in Iowa, USA.

49
Hub Group
Hub Group, Inc. (Hub Group) is an asset-light freight transportation management company that provides
intermodal, truck brokerage and logistics services in North America. The company operates through two
divisions, Hub, which contributes three quarters of total revenue and Mode, which contributes the remaining
one quarter of total revenue. Hub Group is headquartered in Illinois, USA.
Universal Logistics
Universal Logistics Holdings Inc. (Universal Logistics) provides transport and logistics solutions in the United
States, Mexico, and Canada. It offers transportation services (including dry van, flatbed, heavy haul, dedicated,
refrigerated, shuttle and switching operations), domestic and international freight forwarding, customs
brokerage, final mile and ground expedited services and brokerage. Universal Logistics is headquartered in
Michigan, USA.
Europe, UK and Scandinavia:
DSV
DSV A/S (DSV) provides transport and logistics services worldwide. It operates through three divisions, Road
Transport Services (approximately 50% of total revenue) Air & Sea Freight Services (approximately 40% of total
revenue) and Solutions (approximately 10% of revenue). DSV is headquartered in Denmark.
Kuehne & Nagel
Kuehne & Nagel International AG (Kuehne & Nagel) provides freight transportation, forwarding and logistics
services. The company operates through three primary segments, Seafreight, which accounts for approximately
half of EBIT, Airfreight, which accounts for approximately 30% of EBIT and Contract Logistics, which accounts for
approximately 20% of EBIT. The company operates in Europe, the Americas, the Asia-Pacific, the Middle East,
Central Asia and Africa. Kuehne & Nagel is headquartered in Switzerland.
Bolloré
Bolloré Group (Bolloré) is engaged in transportation and logistics (greater than one half of total revenue), oil
logistics (approximately one quarter of total revenue) and other services (approximately 20% of total revenue).
The company is headquartered in France.
Panalpina
Panalpina World Transport (Holding) Ltd. (Panalpina) provides air and ocean freight and logistics services in
Europe, the Middle East, Africa, Russia, the Americas and the Asia Pacific. Its air freight services include general,
special, express and intermodal services as well as charter and emergency services. The company is
headquartered in Switzerland.
Asia:
Kerry Logistics
Kerry Logistics Network Limited (Kerry Logistics) provides logistics services in Asia and internationally. The
services provided include integrated logistics (storage and value-added services), trucking and distribution
services, returns management services and various ancillary services primarily in Asia. Kerry’s freight forwarding
business contributes approximately 60% of total of revenue. The company is headquartered in Hong Kong.
Sinotrans
Sinotrans Limited (Sinotrans) provides logistics services primarily in the People’s Republic of China. The company
offers freight forwarding services by sea, rail, air and road, integrated supply chain logistics solutions,
warehousing services, express services and terminal value-added services (berthing, stevedoring, stack-up and
delivery, forwarding, hauling and depot services). It also provides shipping agency services, container lines and
coastal feeder services and long haul transportation services (such as cross-regional long haulage services, intra-
regional distribution services, just in time transport, reverse logistics and supply transportation). Sinotrans is
headquartered in Beijing, China.

50
Kintetsu
Kintetsu World Express, Inc. (Kintetsu) provides air freight forwarding, sea freight forwarding, logistics and other
services. The company offers packaging, customs clearance, project management, less-than-container load/full-
container load, booking, crafting and break bulk services as well as logistics services including vendor managed
inventory, just in time operation, reverse logistics, consultation, assembly works and product inspection services.
Kintetsu also provides warehousing, packing, temporary staffing, property management, insurance agency and
trucking services. The company operates primarily in the computer/IT/electronics, communication and
automotive industries. Kintetsu is headquartered in Tokyo, Japan.

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Recent Transaction Evidence

The multiples implied by the pricing of the Proposed Acquisition can be considered having regard to the earnings
multiples implied by the price at which broadly comparable companies and businesses have changed hands. A
selection of recent transactions involving freight and logistics businesses is set out below:

RECENT TRANSACTION EVIDENCE
Source: Grant Samuel analysis







DATE TARGET ACQUIRER
IMPLIED
ENTERPRISE
VALUE
(MILLIONS)
EBITDA MULTIPLE
(TIMES)
EBIT MULTIPLE
(TIMES)
HISTORICAL FORECAST HISTORICAL FORECAST
Freight Transport, Domestic Forwarding and Intermodal
Pending Fliway Yang Kee $64 7.6 7.8 10.7 11.1
Apr 17
Swift
Transportation
Knight Transportation US$2,952 7.4 na 14.4 na
Oct 16
Truckload
business of XPO
Logistics
TransForce US$558 4.9 na na na
Dec 15 InterBulk Group XPO Logistics Europe £95 6.5 na 12.8 na
Apr 15
Norbert
Dentressangle
XPO Logistics Inc. US$3,595 10.5 9.1 19.1 15.4
Feb 15 Toll Holdings Japan Post Bank A$8,107 12.0 11.0 19.6 17.8
Oct 14
Barr-Nunn
Transportation
Knight Transportation US$116 4.5 na 7.8 na
Jan 14 Pacer XPO Logistics US$335 11.8 10.1 18.2 13.4
Dec 13 Scott K&S A$48 4.5 na 10.7 na
Nov 13 Gordon Trucking Heartland Express US$300 5.3 na 13.5 na
Apr 13 Unifeeder Nordic Capital €400 8.3 na 8.7 na
Mar 11 Wim Bosman Mainfreight €120 6.2 na na na
Median 7.0 9.5 13.6 14.4
Average 7.5 9.6 13.2 14.4
Logistics
Oct 15 Hi Logistics Pantos Logistics KRW105,400 5.8 na 7.4 na
Sep 15 Con-way XPO Logistics US$3057 6.2 5.5 11.6 9.7
Feb 15 APL Logistics Kintetsu US$1,200 15.0 na nc na
Feb 15 Shinhung Global Shinsung Delta Tech KRW24,790 5.7 na 6.3 na
Jun 15 GMK Logistics CTI Logistics A$27 4.5 na na na
May 15
Bridge Terminal
Transport
XPO Logistics US$100 8.1 na na na
Jan 15 Pantos Logistics LG International 604,808 6.1 na 7.1 na
Jul 14 Jacobsen Norbert Denressangle US$750 9.9 na nc na
Jul 14 New Breed
XPO Logistics
US$615 8.0 na na na
Jul 13 3PD
XPO Logistics
US$365 12.8 na 26.3* na
Jul 12 LINC Logistics
Universal Truckload
Services
US$335 6.8 na 7.8 na
Median 6.8 5.5 7.4 9.7
Average 8.1 5.5 8.0 9.7

52
Freight Transport, Domestic Forwarding and Intermodal:
Fliway Group Limited / Yang Kee Logistics Pte Limited
On 25 October 2017 Fliway Group Limited (Fliway) announced that it had entered into a Scheme Implementation
Agreement with Yang Kee Logistics Pte Limited (Yang Kee), one of Singapore’s largest privately owned logistics
companies with operations in Australia, the United States, China and South East Asia. Under the scheme, Yang
Kee will acquire all of the shares for NZ$1.22 cash per share. Fliway is New Zealand based transport and logistics
company with a fleet of over 150 vehicles, 12 branches and 5 warehouses employing 400 people. The purchase
price implies multiples of 7.6 times historical EBITDA and 7.8 times forecast EBITDA (broker consensus) and
multiples of 10.7 times historical EBIT and 11.1 times forecast EBIT (broker consensus).
Swift Transportation Company / Knight Transportation Inc.
On 10 April 2017 Swift Transportation Company and Knight Transportation Inc. announced an all stock merger
transaction at a combined enterprise value of approximately US$6 billion. The merger created North America’s
largest truckload company with approximately 23,070 tractors, 76,810 trailers and 21,340 drivers operating from
70 locations in 30 states and 3 locations in Mexico. The combined revenue of the two companies upon the
merger was US$5.225 billion and combined EBITDA and EBIT was US$806 million and US$416 million
respectively. The merger value implied multiples of 7.4 combined historical EBITDA and 14.4 times combined
historical EBIT.
XPO Logistics / Transforce Inc.
On 27 October 2016 XPO Logistics announced that it had completed the sale of its North American truckload
business to Transforce Inc. for approximately US$558 million in cash. The business consisted of approximately
3,000 tractor units, 7,500 trailers and 29 operating locations that were part of the October 2015 acquisition of
Con-Way Inc. the purchase price implied a multiple of 4.9 times historical EBITDA. The implied EBIT multiple
was not calculable.
XPO Logistics Europe SA / InterBulk Group Plc
On 22 December 2015 XPO Logistics Europe SA entered into an agreement to acquire InterBulk Group Plc
(InterBulk) for an enterprise value of approximately £95 million. InterBulk provides intermodal logistics solutions
primarily in Europe, the Americas and the Asia Pacific. Its primary business segments are Liquid Bulk and Dry
Bulk transport. XPO Logistics Europe provides transport, logistics and supply chain solutions primarily in Europe.
The purchase price implied multiples of 6.5 times historical EBITDA and 12.8 times historical EBIT.
XPO Logistics / Norbert Dentressangle
On 28 April 2015 XPO Logistics entered into an agreement to acquire a 67% stake in Norbert Dentressangle SA
for US$1.5 billion in cash. Following the purchase of shares Norbert Dentressangle was renamed XPO Logistics
Europe SA and listed on the French stock exchange. The purchase price implied multiples of 9.1 times forecast
EBITDA and 15.4 times forecast EBIT.
Toll Holdings Limited / Japan Post Bank Co Ltd
On 18 February 2015 Toll Holdings Limited (Toll) announced a proposal for Japan Post Bank Co Ltd (Japan Post)
to acquire Toll under a Scheme of Arrangement for A$9.04 per share, implying a market capitalisation of A$6.49
billion and an enterprise value of A$8.02 billion. Toll is a leading provider of transport and logistics across the
Asia Pacific region employing approximately 40,000 people across approximately 1,200 locations in more than
50 countries. For its financial year ended 30 June 2014 Toll generated EBITDA of A$709.5 million and EBIT of
A$433.0 million on revenues of A$8.81 billion. The purchase price implied multiples of 12.0 times historical
EBITDA and 11.0 times forecast (broker consensus) EBITDA. Toll was identified by Japan Post as a key growth
platform in its strategy to become a leading global logistics player.
Barr-Nunn Transportation Inc. /Knight Transportation Inc.
On 1 October 2014, Knight Transportation acquired Barr-Nunn Transportation Inc. (BNT) for US$116 million. BNT
is based in Iowa, United States and provides truckload and shipping services to manufacturers and users of
consumer products throughout the United States. Knight operates short-to-medium haul truckload carriers of
general commodities primarily in the United States. It operates through two segments, Trucking and Logistics.
The purchase price implied multiples of 4.5 times historical EBITDA and 7.8 times historical EBIT.

53
Pacer International, Inc. / XPO Logistics, Inc.
On 26 February 2014, XPO Logistics (XPO) announced that it had entered into an agreement to acquire Pacer
International, Inc. (Pacer) for US$335 million. Pacer is the third largest provider of intermodal services in North
America, facilitating 10% of all domestic intermodal freight movements and is the largest provider of intermodal
services between the United States and Mexico. The acquisition provided XPO with increased market share in
intermodal services, which had been identified as a fast-growing market segment by XPO. The multiples implied
by the transaction (10.1 times forecast EBITDA and 13.4 times forecast EBIT) reflects the expected upside
associated with increased market share in a growth market.

Scott / K&S Corporation Limited
On 13 November 2013, K&S Corporation Limited (K&S) and Scott Corporation Limited (Scott) announced an
agreed merger by way of a takeover offer by K&S for all of the shares in Scott. The offer consideration was either
A$0.59 cash or 0.345 K&S shares for each Scott shares, plus a fully franked special dividend to be paid by Scott
of A$0.05 per share. Scott is a national carrier (in Australia) with expertise in the transport of bulk solids, liquids
and explosives by road, rail and sea. Scott operates in different functional and geographic markets to K&S and
offered K&S the opportunity to diversify its business. The purchase price implied multiples of 4.5 times historical
EBITDA and 10.7 times historical EBIT.
Gordon Trucking / Heartland Express
On 11 November 2013 Heartland Express, Inc. (Heartland) acquired all of the shares in Gordon Trucking, Inc.
(Gordon Trucking) for US$413.7 million in cash and Heartland stock. Heartland also assumed US$150 million of
Gordon Trucking debt. Gordon Trucking is primarily focused on the dry van market with some operations in
refrigerated transport and freight brokerage. The acquisition provided Heartland with substantial geographic
diversity along with synergies through increased in-house maintenance, optimisation of staffing and locations
and purchasing economies. The purchase price implied a multiple of 5.3 times historical EBITDA and 13.5 times
historical EBIT.
Unifeeder / Nordic Capital
On 5 April 2013, Nordic Capital announced that it had agreed to acquire Unifeeder A/S (Unifeeder) from Montagu
Private Equity for €400 million. Unifeeder is a market leader in Northern Europe’s largest feeder and short sea
network for international container transportation, with a particular focus on intra-Europe container freight for
large industrial companies, and has operations in the world’s key container hubs. Unifeeder had invested in new
markets and enhanced its networks, logistical operations and management structures, as a result of which it was
expected to generate further organic and acquisition growth and benefit from increasing global trade volumes
and an increase in demand for short sea container shipping as road transport costs increased.
Wim Bosman / Mainfreight
On 3 April 2011, Mainfreight Limited (Mainfreight) acquired Netherlands-based Wim Bosman Holding B.V. (Wim
Bosman) for upfront consideration of €120 million (plus a €10 million earnout). Wim Bosman operates 14
branches across six European countries, with more than 1,000 transport units and 275,000 square metres of
warehouse facilities. Wim Bosman provides transportation and logistics services across Europe utilising road, sea
and air transportation along with third party warehousing services. Mainfreight provides supply chain logistics
solutions in New Zealand, Australia, the Americas, Asia, and Europe. It offers warehousing, domestic distribution
and international air and ocean freight services, as well as supply chain management services. The acquisition
was identified as a strong strategic fit for Mainfreight to provide a platform to expand its business and service in
the European market.
Logistics:
Hi Logistics Co. Ltd. / Pantos Logistics Co., Ltd
On 29 October 2015, Pantos Logistics Co., Ltd. (Pantos) agreed to acquire Hi Logistics Co. Ltd. (Hi Logistics) from
LG Electronics Inc. for approximately KRW 105,400 million (equivalent to approximately NZ$146 million). Hi
Logistics provides logistics services, offering storage, unloading, distribution processing and
transportation/delivery. Hi Logistics was founded in 2004 and is based in Seoul, South Korea. Pantos is also based
in Seoul and provides sea, rail, road and air freight services. Pantos is owned by LG International Corp.

54
XPO Logistics / Con-way Inc.
On 9 September 2015 XPO Logistics entered into an agreement to acquire Con-way Inc. for approximately US$2.8
billion. Con-way provides transportation, logistics and supply chain management services primarily in North
America. XPO Logistics provides transportation and logistics services in North America, Europe, UK and Asia.
APL Logistics / Kintetsu
On 17 February 2015 Kintetsu completed the acquisition of APL Logistics Ltd (APL Logistics) for US$1,200 million
in cash. APL Logistics designs and operates globally integrated supply chains, including supply chain services,
international hub management, freight management, warehousing and distribution management and
technology services. It focuses on value-added services for companies in the automobile and retail industries,
with operations in North America and Asia. The high implied EBITDA multiple reflects the complementary nature
of APL’s logistics and service platform with Kintetsu’s existing freight forwarding operations, which will allow
expansion of both the commodities handled and the regions covered. The acquisition was expected to generate
synergy benefits and create value for Kintetsu through providing a broader range of logistics services to
customers.
Shinhung Global / Shinsung Delta Tech
In March 2015, Shinsung Delta Tech Co., Ltd (SDT) acquired Shinhung Global Co. Ltd (SGC) for KRW24,790
(equivalent to approximately NZ$63 million). SGC engages in third party logistics, packing and forwarding
businesses in South Korea and internationally. It offers air and sea freight, trucking, warehousing, overseas
shipping, and logistics services. SDT provides various parts and components for home appliances, automobiles,
mobile phones, and LCD televisions in South Korea and internationally.
CTI Logistics Limited / GMK Logistics
On 10 June 2015 CTI Logistics Limited (CTI) announced the acquisition of GMK Logistics (GMK) for an enterprise
value of A$27.6 million. GMK operates as a full-service logistics company in Australia offering outsourced
warehousing and storage services third party logistics and other value added services. CTI provides transport
and logistics services in Australia.
XPO Logistics / Bridge Terminal Transport Inc.
On 4 May 2015 XPO Logistics entered into an agreement to acquire Bridge Terminal Transport Inc. (BTT) from
Platinum Equity LLC for US$100 million. The purchase price implied a multiple of 8.1 times EBITDA. BTT
generated EBITDA of US$12.4 million on revenue of US$232 million for the 12 months ended 31 March 2015.
Pantos Logistics / LG International Corp.
On 2 March 2015, LG International Corp. (LGI) agreed to acquire a 51% stake in Pantos for KRW 604,808 million
(equivalent to approximately NZ$450 million). LGI is a large South Korean conglomerate founded in 1953 and
based in Seoul. LGI operates 80 business hubs globally, including Asia, Europe, and North America is currently
conducting approximately 30 projects in fields including coal, petroleum, non-ferrous metals, electronics
machinery, petrochemicals, and steel. A description of Pantos is outlined in the Hi Logistics acquisition above.
Jacobsen / Norbert Dentressangle
On 29 August 2014, Norbert Dentressangle SA (Norbert Dentressangle) announced that it had acquired The
Jacobson Companies (Jacobson) from Oak Hill Capital Partners for US$750 million in cash. Jacobson is one of the
largest value-added warehousing and third party logistics providers in North America with integrated domestic
transport management capabilities. It provides warehousing and logistics services including distribution,
packaging, freight management, contract carriage and road shipping. The acquisition increased Norbert
Dentressangle’s scale globally and in particular provided a scalable base in the United States logistics and
transport market. This strategic expansion was consistent with Norbert Dentressangle’s strategy to become a
top-tier player in the global supply chain management market.
New Breed / XPO Logistics
On 2 September 2014, XPO Logistics, Inc. (XPO Logistics) announced that it had acquired New Breed Holding
Company (New Breed) for US$615 million in cash. New Breed provides transport and logistics (truckload, less-
than-truckload and intermodal brokerage) services, as well as domestic freight shipment, international freight

55
forwarding and ocean transport and air charter shipment services. Its focus is on providing non-asset based,
engineered contract logistics solutions to blue chip customers, with services concentrated on high-growth
outsourcing opportunities, particularly in telecommunications/technology, retail/e- commerce, aerospace and
defence, medical equipment and select areas of manufacturing. The acquisition expanded XPO Logistics’
operations to include an additional 203 locations and approximately 10,400 employees. It was also in line with
XPO Logistics’ strategy to grow its contract logistics platform through complementary acquisitions.
3PD / XPO Logistics
On 15 July 2013, XPO Logistics announced that it would acquire all the common stock in 3PD, Inc. (3PD) for
US$365 million, with the consideration to comprise US$357 million in cash and US$8 million in XPO Logistics
restricted stock. 3PD provides last-mile logistics solutions to blue-chip customers in the United States and
Canada, with a focus on customised solutions tailored to their supply chain needs. The services offered include
assembly and installation services and solutions for manufacturers and retailers. The acquisition of 3PD was
expected to be immediately accretive to XPO Logistics’ earnings and advance its strategy for rapid, disciplined
growth in non-asset transportation logistics in a fast growing division of the industry. The implied EBIT multiple
reflects the capital intensive nature of 3PD’s business.
LINC Logistics / Universal Truckload Services
On 1 October 2012, Universal Truckload Services, Inc. (Universal Truckload Services) announced that it had
completed the acquisition of LINC Logistics Company (LINC Logistics) for US$182 million (plus the assumption of
US$153 million of debt). The consideration was 0.70 new Universal Truckload Services shares for every LINC
Logistics share held. LINC Logistics is an asset-light provider of custom-developed third-party logistics solutions,
primarily providing value-added logistics services to the automotive and manufacturing industries. It also
provides dedicated truckload, expedited and freight forwarding services in North America. Universal Truckload
Services’ trucking operations include flatbed and dry bed services, as well as rail-truck and steamship-truck
intermodal support services. The combination of these businesses created a full-service, asset- light logistics
platform that enabled delivery of a more comprehensive suite of services and provided a diversified business
mix that was expected to enhance Universal Truckload Services’ long-term growth profile.

56
Valuation Methodology Descriptions
Capitalisation of Earnings
Capitalisation of earnings or cash flows is most appropriate for businesses with a substantial operating history
and a consistent earnings trend that is sufficiently stable to be indicative of ongoing earnings potential. This
methodology is not particularly suitable for start-up businesses, businesses with an erratic earnings pattern or
businesses that have unusual expenditure requirements. This methodology involves capitalising the earnings or
cash flows of a business at a multiple that reflects the risks of the business and the stream of income that it
generates. These multiples can be applied to a number of different earnings or cash flow measures including
EBITDA, EBITA, EBIT or net profit after tax. These are referred to respectively as EBITDA multiples, EBITA
multiples, EBIT multiples and price earnings multiples. Price earnings multiples are commonly used in the context
of the share market. EBITDA, EBITA and EBIT multiples are more commonly used in valuing whole businesses for
acquisition purposes where gearing is in the control of the acquirer.

Where an ongoing business with relatively stable and predictable earnings is being valued Grant Samuel uses
capitalised earnings or operating cash flows as a primary reference point. Application of this valuation
methodology involves:
§
estimation of earnings or cash flow levels that a purchaser would utilise for valuation purposes having
regard to historical and forecast operating results, non-recurring items of income and expenditure and
known factors likely to impact on operating performance; and
§
consideration of an appropriate capitalisation multiple having regard to the market rating of comparable
businesses, the extent and nature of competition, the time period of earnings used, the quality of earnings,
growth prospects and relative business risk.

The choice between the parameters is usually not critical and should give a similar result. All are commonly used
in the valuation of logistics businesses. EBITDA can be preferable if depreciation or non-cash charges distort
earnings or make comparisons between companies difficult but care needs to be exercised to ensure that proper
account is taken of factors such as the level of capital expenditure needed for the business and whether or not
any amortisation costs also relate to ongoing cash costs. EBITA avoids the distortions of goodwill amortisation.
EBIT can better adjust for differences in relative capital intensity.

Determination of the appropriate earnings multiple is usually the most judgemental element of a valuation.
Definitive or even indicative offers for a particular asset or business can provide the most reliable support for
selection of an appropriate earnings multiple. In the absence of meaningful offers, it is necessary to infer the
appropriate multiple from other evidence.

The usual approach is to determine the multiple that other buyers have been prepared to pay for similar
businesses in the recent past. However, each transaction will be the product of a unique combination of factors.
A pattern may emerge from transactions involving similar businesses with sales typically taking place at prices
corresponding to earnings multiples within a particular range. This range will generally reflect the growth
prospects and risks of those businesses. Mature, low growth businesses will, in the absence of other factors,
attract lower multiples than those businesses with potential for significant growth in earnings.

An alternative approach used in valuing businesses is to review the multiples at which shares in listed companies
in the same industry sector trade on the share market. This gives an indication of the price levels at which
portfolio investors are prepared to invest in these businesses. Share prices reflect trades in small parcels of
shares (portfolio interests) rather than whole companies and it is necessary to adjust for this factor.

The analysis of comparable transactions and share market prices for comparable companies will not always lead
to an obvious conclusion as to which multiple or range of multiples will apply. There will often be a wide spread
of multiples and the application of judgement becomes critical. Moreover, it is necessary to consider the
particular attributes of the business being valued and decide whether it warrants a higher or lower multiple than
the comparable companies. This assessment is essentially a judgement.

57
Discounted Cash Flow
Discounting of projected cash flows has a strong theoretical basis. It is the most commonly used method for
valuation in a number of industries and for the valuation of start-up projects where earnings during the first few
years can be negative. DCF valuations involve calculating the net present value of projected cash flows. This
methodology is able to explicitly capture the effect of a turnaround in the business, the ramp up to maturity or
significant changes expected in capital expenditure patterns. The cash flows are discounted using a discount
rate, which reflects the risk associated with the cash flow stream. Considerable judgement is required in
estimating future cash flows and it is generally necessary to place great reliance on medium to long-term
projections prepared by management. The discount rate is also not an observable number and must be inferred
from other data (usually only historical). None of this data is particularly reliable so estimates of the discount
rate necessarily involve a substantial element of judgment. In addition, even where cash flow forecasts are
available the terminal or continuing value is usually a high proportion of value. Accordingly, the multiple used in
assessing this terminal value becomes the critical determinant in the valuation (i.e. it is a “de facto” cash flow
capitalisation valuation). The net present value is typically extremely sensitive to relatively small changes in
underlying assumptions, few of which are capable of being predicted with accuracy, particularly beyond the first
two or three years. The arbitrary assumptions that need to be made and the width of any value range mean the
results are often not meaningful or reliable. Notwithstanding these limitations, DCF valuations are commonly
used and can at least play a role in providing a check on alternative methodologies, not least because explicit
and relatively detailed assumptions need to be made as to the expected future performance of the business
operations.
Realisation of Assets
Valuations based on an estimate of the aggregate proceeds from an orderly realisation of assets are commonly
applied to businesses that are not going concerns. They effectively reflect liquidation values and typically
attribute no value to any goodwill associated with ongoing trading. Such an approach is not appropriate in TIL
Logistics’ case.
Industry Rules of Thumb
Industry rules of thumb are commonly used in some industries. These are generally used by a valuer as a “cross
check” of the result determined by a capitalised earnings valuation or by discounting cash flows, but in some
industries rules of thumb can be the primary basis on which buyers determine prices. Grant Samuel is not aware
of any commonly used rules of thumb that would be appropriate to value TIL Logistics. In any case, it should be
recognised that rules of thumb are usually relatively crude and prone to misinterpretation.

58
Interpretation of Multiples

Earnings multiples are normally benchmarked against two primary sets of reference points:
§
the multiples implied by the share prices of listed peer group companies; and
§
the multiples implied by the prices paid in acquisitions of other companies in the same industry.
In interpreting and evaluating such data it is necessary to recognise that:
§
multiples based on listed company share prices do not include a premium for control and are therefore
often (but not always) less than multiples that would apply to acquisitions of controlling interests in similar
companies. However, while the premium paid to obtain control in takeovers is observable (typically in the
range 20-35%) it is inappropriate to simply add a premium to listed multiples. The premium for control is
an outcome of the valuation process, not a determinant of value. Premiums are paid for reasons that vary
from case to case and may be substantial due to synergy or other benefits available to the acquirer. In
other situations premiums may be minimal or even zero. There are transactions where no corporate buyer
is prepared to pay a price in excess of the prices paid by share market investors;
§
acquisition multiples from comparable transactions are therefore usually seen as a better guide when
valuing 100% of a business but the data tends to be less transparent and information on forecast earnings
is often unavailable;
§
the analysis will give a range of outcomes from which averages or medians can be determined but it is not
appropriate to simply apply such measures to the company being valued. The most important part of
valuation is to evaluate the attributes of the specific company being valued and to distinguish it from its
peers so as to form a judgement as to where on the spectrum it belongs;
§
acquisition multiples are a product of the economic and other circumstances at the time of the transaction.
However, each transaction will be the product of a unique combination of factors, including:
• economic factors (e.g. economic growth, inflation, interest rates) affecting the markets in which
the company operates;
• strategic attractions of the business – its particular strengths and weaknesses, market position of
the business, strength of competition and barriers to entry;
• the company’s own performance and growth trajectory;
• rationalisation or synergy benefits available to the acquirer;
• the structural and regulatory framework;
• investment and share market conditions at the time, and
• the number of competing buyers for a business;
§
acquisitions and listed companies in different countries can be analysed for comparative purposes, but it is
necessary to give consideration to differences in overall share market levels and rating between countries,
economic factors (economic growth, inflation, interest rates), market structure (competition etc) and the
regulatory framework. It is not appropriate to adjust multiples in a mechanistic way for differences in
interest rates or share market levels;
§
acquisition multiples are based on the target’s earnings but the price paid normally reflects the fact that
there were cost reduction opportunities or synergies available to the acquirer (at least if the acquirer is a
“trade buyer” with existing businesses in the same or a related industry). If the target’s earnings were
adjusted for these cost reductions and/or synergies the effective multiple paid by the acquirer would be
lower than that calculated on the target’s earnings;
§
while EBITDA multiples are commonly used benchmarks they are an incomplete measure of cash flow. The
appropriate multiple is affected by, among other things, the level of capital expenditure (and working
capital investment) relative to EBITDA. In this respect:
• EBIT multiples can in some circumstances be a better guide because (assuming depreciation is a
reasonable proxy for capital expenditure) they effectively adjust for relative capital intensity and
present a better approximation of free cash flow. However, capital expenditure is lumpy and
depreciation expense may not be a reliable guide. In addition, there can be differences between
companies in the basis of calculation of depreciation; and
• businesses that generate higher EBITDA margins than their peer group companies will, all other
things being equal, warrant higher EBITDA multiples because free cash flow will, in relative terms,
be higher (as capital expenditure is a smaller proportion of earnings).

59
Qualifications, Declarations and Consents
Qualifications
The Grant Samuel group of companies provides corporate advisory services in relation to mergers and
acquisitions, capital raisings, corporate restructuring and financial matters generally. One of the primary
activities of Grant Samuel is the preparation of corporate and business valuations and the provision of
independent advice and expert’s reports in connection with mergers and acquisitions, takeovers and capital
reconstructions. Since inception in 1988, Grant Samuel and its related companies have prepared more than 400
public expert and appraisal reports.

The persons responsible for preparing this report on behalf of Grant Samuel are Michael Lorimer, BCA,
Christopher Smith, BCom, PGDipFin, MAppFin, and Jake Sheehan, BCom (Hons). Each has a significant number
of years of experience in relevant corporate advisory matters.
Limitations and Reliance on Information
Grant Samuel’s opinion is based on economic, market and other conditions prevailing at the date of this report.
Such conditions can change significantly over relatively short periods of time. The report is based upon financial
and other information provided by the directors, management and advisers of Bethunes and TIL. Grant Samuel
has considered and relied upon this information. Grant Samuel believes that the information provided was
reliable, complete and not misleading and has no reason to believe that any material facts have been withheld.

The information provided has been evaluated through analysis, enquiry, and review for the purposes of forming
an opinion on the Proposed Acquisition. However in such assignments time is limited and Grant Samuel does
not warrant that these inquiries have identified or verified all of the matters which an audit, extensive
examination or “due diligence” investigation might disclose.

The time constraints imposed by the Takeovers Code are tight. This timeframe restricts the ability to undertake
a detailed investigation of Bethunes and TIL. In any event, an analysis of the merits of the offer is in the nature
of an overall opinion rather than an audit or detailed investigation. Grant Samuel has not undertaken a due
diligence investigation of Bethunes or TIL. In addition, preparation of this report does not imply that Grant
Samuel has audited in any way the management accounts or other records of Bethunes or TIL. It is understood
that, where appropriate, the accounting information provided to Grant Samuel was prepared in accordance with
generally accepted accounting practice and in a manner consistent with methods of accounting used in previous
years.

An important part of the information base used in forming an opinion of the kind expressed in this report is the
opinions and judgement of the management of the relevant enterprise. That information was also evaluated
through analysis, enquiry and review to the extent practicable. However, it must be recognised that such
information is not always capable of external verification or validation.

The information provided to Grant Samuel included projections of future revenues, expenditures, profits and
cash flows of Bethunes and TIL prepared by the management of Bethunes and TIL. Grant Samuel has used these
projections for the purpose of its analysis. Grant Samuel has assumed that these projections were prepared
accurately, fairly and honestly based on information available to management at the time and within the
practical constraints and limitations of such projections. It is assumed that the projections do not reflect any
material bias, either positive or negative. Grant Samuel has no reason to believe otherwise.

However, Grant Samuel in no way guarantees or otherwise warrants the achievability of the projections of future
profits and cash flows for Bethunes or TIL. Projections are inherently uncertain. Projections are predictions of
future events that cannot be assured and are necessarily based on assumptions, many of which are beyond the
control of management. The actual future results may be significantly more or less favourable.

To the extent that there are legal issues relating to assets, properties, or business interests or issues relating to
compliance with applicable laws, regulations, and policies, Grant Samuel assumes no responsibility and offers no

60
legal opinion or interpretation on any issue. In forming its opinion, Grant Samuel has assumed, except as
specifically advised to it, that:
§
the title to all such assets, properties, or business interests purportedly owned by Bethunes and TIL is good
and marketable in all material respects, and there are no material adverse interests, encumbrances,
engineering, environmental, zoning, planning or related issues associated with these interests, and that the
subject assets, properties, or business interests are free and clear of any and all material liens,
encumbrances or encroachments;
§
there is compliance in all material respects with all applicable national and local regulations and laws, as
well as the policies of all applicable regulators other than as publicly disclosed, and that all required licences,
rights, consents, or legislative or administrative authorities from any government, private entity, regulatory
agency or organisation have been or can be obtained or renewed for the operation of the business of
Bethunes and TIL, other than as publicly disclosed;
§
various contracts in place and their respective contractual terms will continue and will not be materially
and adversely influenced by potential changes in control; and
§
there are no material legal proceedings regarding the business, assets or affairs of Bethunes and TIL, other
than as publicly disclosed.
Disclaimers
It is not intended that this report should be used or relied upon for any purpose other than as an expression of
Grant Samuel’s opinion as to the merits of the Proposed Acquisition. Grant Samuel expressly disclaims any
liability to any Bethunes security holder who relies or purports to rely on the report for any other purpose and
to any other party who relies or purports to rely on the report for any purpose whatsoever.

This report has been prepared by Grant Samuel with care and diligence and the statements and opinions given
by Grant Samuel in this report are given in good faith and in the belief on reasonable grounds that such
statements and opinions are correct and not misleading. However, no responsibility is accepted by Grant Samuel
or any of its officers or employees for errors or omissions however arising in the preparation of this report,
provided that this shall not absolve Grant Samuel from liability arising from an opinion expressed recklessly or in
bad faith.

Grant Samuel has had no involvement in the preparation of the Notice of Meeting issued by Bethunes and has
not verified or approved any of the contents of the Notice of Meeting. Grant Samuel does not accept any
responsibility for the contents of the Notice of Meeting (except for this report).
Independence
Grant Samuel and its related entities do not have any shareholding in or other relationship or conflict of interest
with Bethunes or TIL that could affect its ability to provide an unbiased opinion in relation to the Proposed
Acquisition. Grant Samuel had no part in the formulation of the Proposed Acquisition. Its only role has been the
preparation of this report. Grant Samuel will receive a fixed fee for the preparation of this report. This fee is not
contingent on the outcome of the Proposed Acquisition. Grant Samuel will receive no other benefit for the
preparation of this report. Grant Samuel considers itself to be independent for the purposes of the Takeovers
Code.
Information
Grant Samuel has obtained all the information that it believes is desirable for the purposes of preparing this
report, including all relevant information which is or should have been known to any Director of Bethunes and
made available to the Directors. Grant Samuel confirms that in its opinion the information provided by Bethunes
and contained within this report is sufficient to enable Bethunes security holders to understand all relevant
factors and make an informed decision in respect of the Proposed Acquisition. The following information was
used and relied upon in preparing this report:
§
Publicly Available Information
• Bethunes Annual and Interim Reports;
• Bethunes Investor Presentations;
• NZX Company Research;
• Capital IQ;

61
• National Freight Demand Study for 2006/07, Ministry of Transport analysis for 2012/13;
• Statistics New Zealand - National Population Projections: 2016 (base)–2068 – Media Release;
• Statistics New Zealand - New Zealand Exports and Imports – All Ports;
• Statistics New Zealand - Gross Domestic Product by industry - Transport, Postal and Warehousing;
• IBIS – Road Transport in New Zealand – April 2017; and
• Other Broker and Industry Research.

§
Non Public Information
• Draft Bethunes Notice of Meeting;
• Draft profile of TIL Logistics;
• TIL Information Memorandum;
• KPMG Pro forma Financial Model;
• KPMG Transaction Framework Model;
• PwC Due Diligence Reports on TIL, MOVE Logistics and NZL; and
• Sale and Purchase Agreement and Term Sheet between Bethunes, TIL and Global.
Declarations
Bethunes has agreed that it will indemnify Grant Samuel and its employees and officers in respect of any liability
suffered or incurred as a result of or in connection with the preparation of the report. This indemnity will not
apply in respect of the proportion of any liability found by a Court to be primarily caused by any conduct involving
gross negligence or wilful misconduct by Grant Samuel. Bethunes has also agreed to indemnify Grant Samuel
and its employees and officers for time spent and reasonable legal costs and expenses incurred in relation to any
inquiry or proceeding initiated by any person. Where Grant Samuel or its employees and officers are found to
have been grossly negligent or engaged in wilful misconduct Grant Samuel shall bear the proportion of such costs
caused by its action. Any claims by Bethunes are limited to an amount equal to the fees paid to Grant Samuel.

Advance drafts of this report were provided to the directors and executive management of Bethunes. Certain
changes were made to the drafting of the report as a result of the circulation of the draft report. There was no
alteration to the methodology, evaluation or conclusions as a result of issuing the drafts.
Consents
Grant Samuel consents to the issuing of this report in the form and context in which it is to be included in the
Notice of Meeting to be sent to security holders of Bethunes. Neither the whole nor any part of this report nor
any reference thereto may be included in any other document without the prior written consent of Grant Samuel
as to the form and context in which it appears.

---

1


17 November 2017

Dear Shareholder

Please find enclosed notice of Bethunes Investments Limited’s (Company and BIL) special meeting which will be
held on 5 December 2017 at the offices of Link Market Services Limited, Level 11 Deloitte Centre, 80 Queen
Street, Auckland, starting at 9:00am. Shareholder registration opens at 8:30am.

The Transactions
The resolutions being put forward at the meeting are intended to approve transactions (Transactions) whereby:
 The Company acquires the transport and logistics business and assets of Transport Investments Limited
(TIL) and 100% of the shares in TIL Logistics Group Limited (the Acquired Assets). The total purchase
price for the Acquired Assets is $200 million, subject to net debt and working capital adjustments, and
will be satisfied by an issue of fully paid ordinary shares in the Company (Share Consideration) and cash
consideration (Cash Consideration).
 The Company enters into new banking facilities with ASB Bank Limited to part fund the acquisition of
the Acquired Assets (the Acquisition) and for ongoing working capital purposes (New Facilities).
 The Company issues up to $11.51 million of fully paid ordinary shares in the Company by way of a
private placement to wholesale investors to part fund the Acquisition (the Private Placement).

The Transactions will result in the introduction of TIL and other third parties as new shareholders to the
Company. The Company’s existing shareholders will retain their shares in the Company (with their shareholding
significantly diluted due to the issue of shares under the Acquisition and the Private Placement).

The Transactions will result in the essential nature of the Company’s business changing, to focus on developing
and operating business interests in the transport and freight services sector, which is in line with the business
interests and expertise of TIL and its directors.

The Notice of Meeting should be read in conjunction with the enclosed Independent Report which assesses the
fairness of the Transactions, and the enclosed Profile which details the Acquired Assets and the associated
business plan to be pursued by the Company following the Transactions.
Valuations and Transaction Consideration
BIL will satisfy the consideration for the Acquired Assets through the issue of the Share Consideration and the
payment of the Cash Consideration.

Prior to completion of the Transactions (Completion), BIL’s share capital will be consolidated using a
consolidation factor equal to 115,060,279 divided by 254.1915 (subject to rounding of individual shareholdings
up to a whole number of Shares).

The Share Consideration comprises the issue of 73,333,334 fully paid ordinary shares in the Company at a price
of $1.50 per share. The Cash Consideration will be funded by the New Facilities and the Private Placement. The
New Facilities comprise a $90 million revolving credit facility, a $10 million working capital overdraft facility and
a $5.8 million guarantee/bond facility, each with ASB Bank Limited. The Private Placement comprises the issue of
up to 7,673,339 fully paid ordinary shares in the Company to wholesale investors at a price of $1.50 per share,
raising up to $11.51 million.

The relevant transaction valuations are:

2


8246810_1

 The Acquired Assets are valued at $200 million, subject to net debt and working capital adjustments.
1


 BIL is valued at approximately $0.7 million.

Based on these valuations and also taking account of the Share Consideration and the shares to be issued under
the Private Placement, the existing shareholders of BIL will have approximately a 0.6% shareholding interest in
the Company following Completion.

Benefits of the Transactions
The Board of the Company considers the effect of the Transactions to be of significant benefit to shareholders
because:
 The Transactions introduce substantial established assets, business operations and growth prospects
into the Company with a focus on the transport and freight services sector.
 The Transactions enable shareholders to, without dilution, continue to own the current business and
assets of Bethunes through their distributed shareholding in New BIL, as well as holding a shareholding
in TIL at no cost.
2

 New BIL shareholders will have the opportunity to participate in a planned capital raise following
completion of the Acquisition, which would include a rights offering to shareholders to raise up to $10
million in capital. If the capital raise is successful, this will provide New BIL with the additional capital
needed to fund its investment programme.
3


The Board considers that the Transactions provide a very worthwhile set of potential opportunities for
shareholders and believes the Transactions are in their best interests.

The main potential negative implications for shareholders of the Transactions are outlined in the Merits
Assessment section on pages 39 to 43 of the Independent Report.

If the Transactions do not proceed, Bethunes would remain a listed shell company seeking suitable investment
and capital raising opportunities to cover its operating expenses. TIL has agreed to continue to meet the
Company’s out of pocket third party costs of the Transactions (unless the reason the Transactions do not
proceed is because shareholders vote against the Transactions, the Company terminates the Transactions
without cause or the Company materially breaches the transaction documents).

Continuation of Bethunes Investment and Acquisition Strategy
4


The Company has transferred its existing assets (other than a limited number of agreed assets), to its wholly
owned subsidiary BIL 2016 Limited (New BIL). Prior to completion of the Acquisition and subject to the
resolutions being approved at the meeting, BIL will in-specie distribute the shares in New BIL to the Company’s
shareholders on a pro rata basis (New BIL In-Specie Distribution). The record date for the New BIL In-Specie
Distribution is 5:00pm on 1 December 2017. The Company’s existing assets that have been transferred to New
BIL include securities in ASX listed Pental Limited (ASX: PTL), a receivable from Mossgreen NZ Limited and
approximately $123,000 in cash. New BIL will continue to pursue the Company’s current investment and
acquisition strategy.

Given the limited resources of the Company, negotiating and documenting the Transactions has required a
significant time commitment from the Directors. In recognition of this, shareholder approval is being sought to
increase the fees payable to the Directors by $75,000. Shareholders should note that these additional fees will
be funded from the New Facilities and will not be funded from the cash that New BIL holds.


1
Further detail on the valuation of TIL is contained in section 7, Page 31, Independent Report.
2
Section 9.2.2, Page 40, Independent Report.
3
Section 9.2.2, Page 40, Independent Report.
4
For further detail on Bethunes Investment and Acquisition Strategy, please refer to the Company’s annual meeting presentations dated 8
June 2017, 29 July 2016 and 31 July 2015 available online at http://www.bethunesinvestments.com/reports/.

3


8246810_1
Following the New BIL In-Specie Distribution, New BIL intends to apply to compliance list on the NZX Main Board
to support an anticipated future capital raising initiative and provide liquidity to shareholders.

Benefits of the New BIL In-Specie Distribution

 The New BIL In-Specie Distribution will enable you, as a shareholder, to continue to own an equivalent
proportionate interest in the current business and assets of the Company through New BIL, while at the
same time retaining a shareholding in the Company (and its new business and assets), in each case
without paying any additional money.
 New BIL is not currently a listed company and shareholders will not be able to publicly trade their
shares. However, as New BIL intends to seek a compliance listing on the NZX Main Board early in 2018,
shareholders will, subject to acceptance of that application by NZX, receive the benefits of a listed
investment in New BIL and be able to trade their shares in New BIL on the NZX Main Board in the
future.
5

 New BIL also intends to conduct a capital raising in 2018 following completion of New BIL In-Specie
Distribution. It is anticipated that this would include a rights offering to shareholders that will provide
New BIL with additional capital to pursue investment opportunities.
 New BIL will not have any liability to ASB Bank or any other party under the New Facilities or otherwise
in connection with the Transactions.

Shareholder action required

Due to the nature of the Transactions, BIL shareholder approval is required. A description of the Transactions
and the requirement for the resolutions to be considered at the meeting are set out in the Explanatory Notes
that form part of the enclosed Notice of Meeting.

The Directors believe that the Transactions, together with the New BIL In-Specie Distribution, will benefit
shareholders and encourage you to read the enclosed Notice of Meeting (including the Explanatory Notes),
together with the enclosed Profile and Independent Report, and to exercise your right to vote.

The enclosed shareholder voting form has detailed instructions on how shareholders may lodge their vote or
appoint a proxy to vote on their behalf if they are unable to attend the meeting.

Directors’ recommendation

The Directors consider that the Transactions are in the best interests of BIL and its shareholders and,
therefore, unanimously recommend that shareholders vote in favour of the resolutions outlined in the Notice
of Meeting.

Please read the enclosed documentation in its entirety, and consult with your financial or professional adviser if
you have any questions about the resolutions.

I look forward to seeing you at the meeting.

Yours faithfully



Chris Swasbrook
Chairman

5
Application will be made to NZX to list New BIL on the NZX Main Board Market. However, NZX accepts no responsibility
for any statement contained herein and makes no guarantee that New BIL’s application for listing will be accepted.

4


8246810_1
NOTICE OF SPECIAL MEETING

Notice is hereby given that a Special Meeting (Meeting) of shareholders of Bethunes Investments Limited
(Company) will be held on 5 December 2017 at the offices of Link Market Services Limited, Level 11 Deloitte
Centre, 80 Queen Street, Auckland, starting at 9:00am. Shareholder registration opens at 8:30am.
Capitalised terms used in this Notice of Meeting have the meaning given to them in the Glossary commencing on
page 35 of this Notice of Meeting.
AGENDA
A. Chairman’s introduction.
B. Presentation to shareholders.
C. Shareholder discussion.
D. Resolutions.
RESOLUTIONS
To consider and, if thought fit, to pass the following Special Resolution:
1. Major Transaction: That under section 129 of the Companies Act and Listing Rule 9.1.1, the Company is
authorised to:
a) acquire the transport and logistics business and assets of Transport Investments Limited and 100%
of the shares on issue in TIL Logistics Group Limited;
b) enter into the New Facilities and related security arrangements with ASB Bank Limited (including
the Facility Documents) for the purposes of that acquisition and ongoing working capital
requirements; and
c) issue fully paid ordinary shares as consideration for that acquisition and under the Private
Placement,
on the terms further described, and on such additional terms as are not inconsistent with those set out,
in this Notice of Meeting.
To consider and, if thought fit, to pass the following Ordinary Resolutions:
2. Approval of Share Issues: That under Listing Rule 7.3.1(a) and Rule 7(d) of the Takeovers Code (as
applicable), the Company is authorised to:
a) issue 66,869,664 Shares to TIL under the Acquisition Agreement at an issue price of $1.50 per
Share, pursuant to the Acquisition;
b) issue 6,463,670 Shares to the Kern Entities under the Acquisition Agreement at an issue price of
$1.50 per Share, pursuant to the Acquisition;
c) issue up to 7,673,339 Shares to the Private Placement Participants at an issue price of $1.50 per
Share, pursuant to the Private Placement,
on the terms further described, and on such additional terms as are not inconsistent with those set out,
in this Notice of Meeting.
3. Approval of Director Fees prior to Completion: That under Listing Rule 3.5.1, the aggregate maximum
amount of fees that can be paid to Directors be increased from $60,000 to $135,000 for the 12 months
ending on the last day of the month in which Completion occurs.
4. Approval of Director Fees following Completion: That under Listing Rule 3.5.1, the aggregate maximum
amount of fees that can be paid to Directors be further increased from $135,000 to $750,000 in each

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financial year, with effect from the first day of the month following the month in which Completion
occurs.
5. Transfer of Shares: That the following acquisitions of Shares are approved for the purposes of Rule 7(c)
of the Takeovers Code:
a) the acquisition of up to 30,813,814 Shares by Hooker Bros. Investments Limited;
b) the acquisition of up to 26,852,652 Shares by Hooker Bros. (1989) Limited;
c) the acquisition of up to 1,125,549 Shares by James Ramsay Trust; and
d) the acquisition of up to 1,125,549 Shares by Nerida Joy Ramsay Trust,
in each case pursuant to the TIL In-Specie Distribution.
To consider and, if thought fit, to pass the following Special Resolution:
6. Adoption of New Constitution: That the constitution of the Company be revoked and the Company
adopt the constitution described in this Notice of Meeting (and available online for review at
http://www.bethunesinvestments.com) with effect from the date of the approval of this resolution.

By order of the Board of Directors



Christopher Swasbrook
Chairman
17 November 2017

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PROCEDURAL NOTES
Interdependence of Resolutions

All of the Resolutions contained in this Notice of Meeting are interdependent and must all be passed by
shareholders in order for any one of those resolutions to be effective.
Relationship to Market Price
As at 27 October 2017 (being the date the Transactions were notified publicly through the NZX market) the last
reported sale price of a Share on the NZX Main Board, adjusted for the Share Consolidation, was $2.54 per
Share.
6
The proposed Share issues under Resolution 2, to be undertaken following the Share Consolidation, will
be undertaken at a price of $1.50 per Share. This represents a discount of 41% from the market share price,
adjusted for the Share Consolidation, at the time the Transactions were announced to NZX.
Proxies
Any shareholder of the Company who is entitled to attend and vote at the meeting may appoint a proxy to
attend and vote on their behalf. A corporation which is a shareholder may appoint a representative to attend
the meeting on its behalf in the same manner as it could appoint a proxy. A proxy does not need to be a
shareholder of the Company. A Proxy Form can be returned by delivery, mail, email, fax, or online (as set out
below).
The Chairman of the Meeting (Mr. Aaron Titter) and the Directors are prepared to act as proxy. The Chairman
and each of the Directors intends to vote in favour of all of the Resolutions (other than Resolutions 3 and 4)
where he is appointed as a discretionary proxy on those Resolutions. The Chairman and Directors will abstain
from voting on any discretionary proxies in respect of Resolutions 3 and 4.
To appoint a proxy you should complete and sign the enclosed Proxy Form and either return it by delivery, mail,
email or fax to the share registrar of the Company:
By delivery:
Bethunes Investments Limited
C/- Link Market Services Limited
Level 11, Deloitte Centre
80 Queen Street
Auckland
By mail:
Bethunes Investments Limited
C/- Link Market Services Limited
PO Box 91976
Auckland 1142
By email: meetings@linkmarketservices.co.nz (please put the words “Bethunes Investments
Limited Proxy Form” in the subject line for easy identification)
By fax: +64 9 375 5990

You may also lodge your proxy online at https://investorcentre.linkmarketservices.co.nz/voting/BIL. You will
require your CSN/Holder Number and FIN to complete your proxy appointment. A shareholder will be taken to
have signed the Proxy Form by lodging it in accordance with the instructions on the website.
The completed Proxy Form must be received by Link Market Services no later than 48 hours before the meeting,
being 9:00 am on 3 December 2017. Online proxy appointments must also be completed by this time. Registered
shareholders at that time will be the only persons entitled to vote at the meeting and only the shares registered
in those shareholders’ names at that time may be voted at the meeting.
Ordinary Resolutions
Resolutions 2, 3 4 and 5 are ordinary resolutions. An ordinary resolution is a resolution passed by a simple
majority of votes of those shareholders entitled to vote and are voting on the resolutions in person or by proxy.

6
The NZX Market Announcement on the acquisition of Transport Investments Limited business is available online on
http://www.bethunesinvestments.com/reports/.

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Special Resolutions
Resolutions 1 and 6 are special resolutions. A special resolution is a resolution passed by a majority of 75% or
more of the votes of those shareholders entitled to vote and voting on the resolution in person or by proxy.
If Resolution 1 (Major Transaction) is passed and any shareholder has cast all the votes attached to the Shares
registered in that shareholder’s name and having the same beneficial owner, against that resolution, then that
shareholder is entitled to require the Company to purchase those Shares in accordance with section 110 of the
Companies Act (Minority Buy-out Rights).
If this right is validly exercised by any shareholders, the Companies Act provides for the Company to acquire (or
procure the acquisition of) the relevant Shares at a fair and reasonable price as at the close of business on
4 December 2017 (being the day before the date of the special meeting), disregarding any value attributable to
the Shares from the Transactions.
It is likely that the Board will set the fair and reasonable price for the relevant Shares based on the net asset
value of the Company on 4 December 2017, which is expected to be $75,000 (being the value of an NZX bond
which will remain in the Company). This implies a fair and reasonable price of 0.065 cents per relevant Share (pre
Share Consolidation).
Shareholders that wish to exercise their Minority Buy-out Rights should note that they will still be distributed
shares in New BIL, because the record date for entitlements will be 1 December 2017.
If Bethunes shareholders do not want to participate in the Acquisition, they should, in Grant Samuel’s opinion,
not exercise their Minority Buy-out Rights and instead exercise their Voluntary Acquisition Rights
7
. For further
information on your Voluntary Acquisition Rights, refer to the section headed “Voluntary Acqusition Rights” on
page 17 of the Explanatory Notes.
Appendix One to this Notice of Meeting sets out the procedure for Minority Buy-out Rights.
Shareholders who become entitled to exercise this right are strongly encouraged to first seek independent
professional advice from a financial adviser. In particular, if you do desire to exit your shareholding, seek advice
on whether you may receive better value for your Shares by selling them on-market or by exercising your
Voluntary Acquisition Rights.
Voting Restrictions

In relation to Resolution 2 and pursuant to Listing Rule 9.3.1 and Rule 17 of the Takeovers Code, the following
persons are prohibited from voting any Shares that they hold:
 TIL, the Kern Persons and their Associated Persons and associates;

 James Ramsay Trust, Nerida Joy Ramsay Trust, Gregory Whitham, Terris Family Trust, Kevin Smith,
Stewart Family Trust, Kern Group and their Associated Persons and associates; and

 the Private Placement Participants and their Associated Persons.
In relation to Resolutions 3 and 4 and pursuant to Listing Rule 9.3.1, the current Directors (Christopher
Swasbrook, Ian Halsted and Aaron Titter) and their Associated Persons and the Directors-Designate (James
Ramsay, Trevor Janes, Lorraine Witten, Danny Chan and Greg Kern) and their Associated Persons are prohibited
from voting any Shares that they hold.
In relation to Resolution 5 and pursuant to Rule 17 of the Takeovers Code, TIL, the Hooker Bros. Entities, James
Ramsay Trust, Nerida Joy Ramsay Trust and their associates are prohibited from voting any Shares that they
hold.
Under the Takeovers Code, “associates” are, in summary, where the persons are or through a third person,
acting jointly or in concert, where one person acts or is accustomed to act in accordance with the wishes of the

7
Section 9.6, Page 43, Independent Report.

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other person, where the persons are related companies or where the persons have a business relationship,
personal relationship, or an ownership relationship such that they should, under the circumstances, be regarded
as associates. Under the Listing Rules, “Associated Persons” has a similar definition.
The Company will disregard any votes cast on Resolutions 2, 3, 4 or 5 by any persons to whom the foregoing
applies. Any discretionary proxies given to persons disqualified from voting under the requirements set out
above will not be valid.
Independent Report

Accompanying this Notice of Meeting is the Independent Report. The Independent Report has been prepared by
Grant Samuel & Associates Limited and constitutes an appraisal report for the purposes of the NZX Listing Rules,
and a report from an independent adviser for the purposes of the Takeovers Code. Shareholders are urged to
read the Independent Report in full.
Profile

A Profile under Listing Rule 7.1.1 accompanies this Notice of Meeting.
The Profile discloses particulars of the assets and business of the Company if the Resolutions are passed. The
Profile is forward looking and assumes:
 the Resolutions contained in this Notice of Meeting have been passed; and
 the Transactions are implemented on the basis set out in this Notice of Meeting.
NZX Approval

This Notice of Meeting has been approved by NZX. However, NZX does not take responsibility for any statement
contained in this Notice of Meeting.

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EXPLANATORY NOTES


INTRODUCTION

The Company was renamed Bethunes Investments Limited (BIL or the Company) in 2015, and has since
embarked on a plan to transform to an investment company. The Company currently, through its wholly owned
subsidiary BIL 2016 Limited (New BIL), holds listed securities in an ASX listed company, a receivable having a face
value of $200,000 from Mossgreen NZ Limited and approximately $123,000 in cash, with no active trading
operations (Current Business).

A profile of the Company is provided in section 3 of the Independent Report.

The Transactions

On 26 October 2017, the Company entered into an Asset and Share Sale Agreement (Acquisition Agreement)
with Transport Investments Limited (TIL) and Kern Group (Logistics) Pty Ltd and the CGJ Daly Investment Trust
(together the Kern Entities) to acquire the transport and logistics business and assets of TIL and all of the shares
in TIL Logistics Group Limited (formerly Global Logistics Group Limited) (Global) (the Acquired Assets). To fund
the acquisition of the Acquired Assets (the Acquisition), the Company proposes to enter into the New Facilities
with ASB Bank and undertake a Private Placement (together with the Acquisition, the Transactions).

Subject to the Transactions being approved by shareholders, the Transactions will be immediately preceded by a
consolidation of BIL’s share capital (made up of 115,060,279 Shares at the date of this Notice) using a
consolidation factor equal to 115,060,279 divided by 254.1915 (subject to rounding of individual shareholdings
up to a whole number of Shares) (Share Consolidation). The Transactions are described further under the
heading “Description of the Transactions” below.

The Directors unanimously support the Transactions and consider that the Transactions are in the best interests
of the Company. No director has a personal interest in the Transactions that is not in common with shareholders,
other than the disclosed arrangements for payment of Director fees.

The following diagram illustrates the Transactions:

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New BIL Arrangements

The current Board of BIL intends to continue the Current Business and pursue its investment and acquisition
strategy through its wholly owned subsidiary New BIL. The Company has transferred its existing assets (other
than a limited number of agreed assets) to New BIL and will, prior to Completion and subject to the Resolutions
being approved, distribute all of the shares in New BIL to the Company’s shareholders on a pro rata basis (New
BIL In-Specie Distribution). The record date for the New BIL In-Specie Distribution is 5:00pm on 1 December
2017. This means that each shareholder’s entitlement to New BIL shares crystallises at this time. As a result, only
shareholders of the Company at that record date (and not TIL, the Kern Entities or the Private Placement
Participants) will receive New BIL shares. The current Directors of BIL will be appointed to the Board of New BIL
before Completion.

Following Completion, New BIL intends to apply to compliance list on the NZX Main Board early in 2018 and the
Company will pay New BIL $200,000 as a contribution towards its related costs. The Company intends to rename
New BIL to Bethunes Investments Limited. New BIL also intends to conduct a capital raise by the end of June
2018, which would include a rights offering to shareholders to raise up to $10 million in capital.

The Board is considering the optimal capital structure for New BIL, in order for New BIL to pursue its intended
investment and acquisition strategy. The Board considers that for New BIL to succeed going forward it will likely
need to leverage its relationship with Elevation Capital Management Limited (ECML) (a company associated with
Christopher Swasbrook) for investment analysis, research and advisory services. The capital structure and any
arrangements with ECML will be disclosed to New BIL shareholders at the time of listing and would require the
approval of New BIL’s non-interested directors.

The arrangements described in the immediately preceding paragraphs (the New BIL Arrangements) will not
prevent New BIL from undertaking further acquisitions like the Transactions. The Directors believe that there are
are additional opportunities available to pursue transactions similar to the Transactions and that these add value
for all given they enable the shareholders to maintain their interest in the Current Business while at the same
time enabling them to gain an interest in other businesses without having to contribute any new capital.

New BIL will not be a listed company for a period from Completion until New BIL applies to list on the NZX Main
Board and such application is accepted. To maintain shareholder engagement in that period, shareholders of
New BIL will be informed of New BIL’s strategies and processes by circulating any key updates to shareholders
electronically and/or via the post (for those shareholders that have not elected to receive electronic
communications). New BIL has instructed Link Market Services to maintain its share register and assist in the
dispatch of communications to shareholders.

Effect of the Transactions and the New BIL Arrangements

The effect of the Transactions and the New BIL Arrangements for shareholders is that, following Completion,
they will hold shares in two companies without paying any new money:

 The Company: Shareholders will continue to hold Shares in the Company, although following Completion
those shares will represent a smaller percentage shareholding in the Company than they do currently.
Following Completion, the Company will own the Acquired Assets and operate the transport and logistics
business currently operated by TIL.

 New BIL: Shareholders will receive shares in New BIL via the New BIL In-Specie Distribution, which will
give shareholders a percentage shareholding in New BIL equivalent to their percentage shareholding in
the Company on the record date (5:00pm on 1 December 2017). The Company has transferred its assets
(other than a limited number of agreed assets) to New BIL and New BIL will continue the Current
Business. Following Completion, New BIL intends to seek a compliance listing on the NZX Main Board to
support a future capital raising initiative and provide liquidity to investors.

The effects of the Transactions and the New BIL Arrangements are summarised in the table below using a
hypothetical shareholder who currently holds one million Shares in the Company: