ERD shares have come out of the trading halt after the board meeting, and the board has knocked it back.

Here is the full text of the letter sent to Volaris -

725 Ann Street Fortitude Valley Queensland 4006 Australia

Attention: Troy O’Connor, Portfolio Manager Volaris Group

12 July 2023

RESPONSE TO NON-BINDING PROPOSAL FOR THE ACQUISITION OF EROAD LIMITED

Dear Troy, On behalf of the EROAD Limited (“EROAD”) Board, we thank you for the confidential, indicative, nonbinding and incomplete proposal to acquire all of the shares in EROAD, which you would prefer to implement through a scheme of arrangement (the “Proposal”) dated 22 June 2023.

We would also like to take this opportunity to welcome Volaris Group as a shareholder, and we look forward to your support as we continue to deliver on EROAD’s strategy. We note that under the Proposal, you have offered EROAD shareholders NZ$1.30 per share in cash consideration which implies an EV / FY24 revenue (guidance) of c.1.2x. The Board of EROAD has established a Sub-Committee, who have met on several occasions and carefully considered the Proposal along with Goldman Sachs as our financial adviser and Chapman Tripp as our external legal counsel. The Board appreciates there are strategic benefits that EROAD could offer to your portfolio, including the attractive long-term growth prospects.

After careful consideration, the Board has determined that the Proposal materially undervalues EROAD’s business. The Proposal therefore falls below the level at which the Board would be prepared to grant access to due diligence information, or to engage in negotiations on a scheme implementation agreement.

The Board remains committed to value maximisation and acting in the best interests of EROAD and our shareholders. We look forward to engaging with you as one of EROAD’s substantial shareholders.

Yours sincerely,

Susan Paterson Chair,

EROAD Limited