Rakon Response to Shareholder Correspondence

Bruce Irvine
Chairman
Rakon Limited
28 May 2020

Dear Bruce,
The undersigned * who represent approximately 14% of Rakon NZ’s
share capital believe the company is significantly undervalued and the
Company is failing to highlight this value to outside investors.
Rakon listed to take advantage of the capital markets to grow its
business on a global basis, and we believe did not list to languish below
asset value as it has done for a considerable period now.
While the refreshed board (since March 2017), has no doubt been very
busy ensuring good governance practice has been installed,
shareholders have seen no resultant benefit.
More importantly (from shareholders perspective) there is no evidence of
any change in shareholder communication and disclosure, which
inevitably improves investor awareness and share price performance
over time.
Unfortunately, Rakon has essentially been ex-communicated by all
forms of market commentator and analysts, due to a lack of proper
engagement by the Company or the Board.
Directors may or may not be aware other companies in the same
technology sector enjoy significantly better valuation ratings than Rakon
We contend, given the long history of disappointments, it is most unlikely
a bumper result from the company’s enviable position in the global 5G
space will change sentiment (and valuation) to any great degree.
Shareholder frustration (and possibly director frustration as well) will
continue unless more immediate focus on shareholder value is taken.
Two recent articles in the Australian Financial Review alluded to interest
in Rakon from private equity firms, see below:-
https://www.afr.com/street-talk/aussie-pe-runs-numbers-on-kiwi-comms-biz-rakon-
20191124-p53djp
https://www.afr.com/street-talk/crescent-capital-partners-mulls-life-as-a-rakon-teur-
20200226-p544ea

Rather than, as you have said “wait and see if there is any fire with this
smoke” we respectfully ask the board to immediately initiate a
process to market the company to the international investing
community
We contend this action will potentially create competitive tension
while crystalizing Rakon’s true market price for all shareholders to
consider.
This process should be quickly and efficiently executed through an
international tender conducted by an investment bank with the
necessary credentials.
I would be happy to discuss this further at any time.
Kind regards

Mike Daniel
Phone number deleted
*Shareholder list

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Rakon Limited
T +64 9 573 5554, F +64 9 573 5559
8 Sylvia Park Road, Mt Wellington, Auckland 1060, New Zealand
Private Bag 99943, Newmarket, Auckland 1149, New Zealand
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28 May 2020

Rakon (RAK) Response to Shareholder Correspondence

The Directors of Rakon have received a letter dated 28 April 2020 from shareholder Mike Daniels
which he states represents the views of approximately 14 % of Rakon shareholders.

The letter makes a number of comments and calls for the Board to initiate a process to market the
company to the international investing community. A copy of the letter is provided with this
release.

The Board advises that neither of Rakon’s substantial quoted equity security holders, the Robinson
Family and Siward Crystal Technology Co. Limited, have supported this initiative.

Chair of the Board, Bruce Irvine confirms the Rakon Board will consider the matters raised in the
letter.

-ends-

Contact:
Maureen Shaddick
Company Secretary
+64 9 571 9238


www.rakon.com


About Rakon
Rakon is a global high technology company and a world leader in its field. The company designs and
manufactures advanced frequency control and timing solutions. Its three core markets are Telecommunications,
Global Positioning and Space and Defence. Rakon products are found at the forefront of communications where
speed and reliability are paramount. The company’s products create extremely accurate electric signals which
are used to generate radio waves and synchronise time in the most demanding communication applications.
Rakon has three manufacturing plants, and has six research and development centres. Customer support
personnel are located in fifteen offices worldwide. Rakon is proud of its New Zealand heritage; it was founded
in Auckland in 1967. It is a public company listed on the New Zealand stock exchange, NZX, ticker code RAK.