Macquarie Capital Alliance Group proposal

Macquarie Group Limited (Macquarie, ASX:MQG) notes the announcement by Macquarie Capital Alliance Group (MCAG) today that it has entered into a Scheme Implementation Agreement in relation to a proposal to acquire all the stapled securities of MCAG by way of interconditional Schemes of Arrangements and a Trust Scheme.

Funding for the proposal has been committed by investment vehicles managed by AlpInvest Partners N.V., HarbourVest Partners, Pantheon Ventures, Partners Group, Paul Capital Partners, Portfolio Advisors and Procific (the Consortium) and Macquarie Capital (a member of the Macquarie Group). The Consortium is investing through a new unlisted fund, Macquarie Advanced Investment Partners (MAIP), to be managed by the Macquarie Group. The proposal has been made by Macquarie Advanced Investment Group (MAIG)¹.

MAIP has commitments for approximately US$650million which will be applied to the offer to acquire MCAG (through MAIPIH² and MAIG) and as a capital reserve. The investors in MAIP will also be committing approximately US$150 million to Macquarie Global Opportunities Partners, a private equity fund managed by Macquarie Capital.

The Schemes are subject to the terms and conditions set out in the Scheme Implementation Agreement, which MCAG has released to the ASX.

Subject to the Schemes being approved by MCAG security holders, Macquarie Capital intends to receive the all cash offer for its MCAG stapled securities and will invest into MAIPIH, prior to the implementation of the Scheme, an amount equal to the cash it will receive for its 17.9% holding in MCAG. Macquarie Capital will also receive MAIPIH scrip as consideration for the sale to MAIPIH of its 28% principal investment in Red Bee Media, valued at $A52million. As a result of these transactions, Macquarie Capital will hold a minimum 25% interest in MAIPIH.

Macquarie Group is not making a new capital injection in to this proposed take-private transaction and also confirms that there is no capital impact on the Group.

1 MAIG comprises Macquarie Advanced Investment Limited, Macquarie Advanced Investment Trust and Macquarie Advanced Investment International Limited. Securities in MAIG will be stapled prior to implementation of the Scheme. The bidding entity is Macquarie Advanced Investment Company Pty Limited, a subsidiary of Macquarie Advanced Investment Limited. The bidding entity will acquire the units in Macquarie Capital Alliance Trust and the shares in Macquarie Capital Alliance International Limited as nominee for Macquarie Advanced Investment Trust and Macquarie Advanced Investment International Limited respectively.

2 MAIP International Holdings Limited (MAIPIH), the parent company of MAIG.