Lufthansa Technik AG To Acquire Hawker Pacific Aerospace In A Cash Tender Offer

Market Wire, 20050229

Lufthansa Technik AG, one of the world's leading providers of technical services for the airline industry, LHT Acquisition Corporation, a wholly-owned subsidiary of Lufthansa Technik AG, and Hawker Pacific Aerospace, a leading provider of landing gear maintenance services for the airline industry, jointly announced today that they have entered into an agreement and plan of merger under which Lufthansa Technik AG and LHT Acquisition Corporation will commence a cash tender offer to acquire all the issued and outstanding shares of common stock of Hawker Pacific Aerospace that Lufthansa Technik AG does not already own. Lufthansa Technik AG currently owns approximately 72.7% of Hawker Pacific Aerospace shares. LHT Acquisition Corporation is a new company formed by Lufthansa Technik AG in connection with the tender offer.

Under the terms of the agreement and plan of merger, LHT Acquisition Corporation will offer cash of $3.25 per outstanding common share of Hawker Pacific Aerospace for a maximum total purchase price of approximately $9 million. The offer for Hawker Pacific Aerospace's common shares also includes common shares issuable upon the exercise of options to purchase common shares.

The tender offer, which is not conditioned upon financing, is expected to commence on March 11, 2002 and is expected to close in April 2002. LHT Acquisition Corporation's obligation to purchase any Hawker Pacific Aerospace shares under the terms of the offer will be subject to a sufficient number of Hawker Pacific Aerospace's common shares being tendered and not withdrawn before the offer expires so that Lufthansa Technik AG and LHT Acquisition Corporation will own at least 90% of the shares of Hawker Pacific Aerospace on a fully diluted basis.

If a sufficient number of the shares are tendered to meet the 90% condition, LHT Acquisition Corporation and Lufthansa Technik AG will act to merge LHT Acquisition Corporation with and into Hawker Pacific Aerospace. At the time of the merger, all shareholders of Hawker Pacific Aerospace who did not tender their shares in the offer will be notified that LHT Acquisition Corporation intends to acquire their shares through the merger at the same $3.25 per share cash price. Following the merger, Hawker Pacific Aerospace will be a privately-held company, wholly-owned by Lufthansa Technik AG.

The board of directors of Hawker Pacific Aerospace, based in part upon a recommendation of a special committee comprised of independent directors of Hawker Pacific Aerospace, has approved the tender offer and the agreement and plan of merger. Houlihan Lokey Howard & Zukin advised the special committee of the board of Hawker Pacific Aerospace and rendered a fairness opinion to the board.

Richard Fortner, who will remain President and Chief Executive Officer of Hawker Pacific Aerospace, said "We are pleased by the all cash offer at a price that reflects a substantial premium to the market price immediately prior to the February 25, 2002 public announcement by Lufthansa Technik AG of certain privately-negotiated purchases of Hawker's shares and its proposal to acquire the remaining publicly-held shares. Hawker's board considered the tender offer and the fairness opinion rendered by Houlihan Lokey Howard & Zukin and determined that the terms of the agreement and plan of merger are advisable, fair to and in the best interests of Hawker's shareholders. Accordingly, our board recommends that the shareholders accept the offer by tendering their shares under the terms of the tender offer."

"By acquiring a controlling interest in Hawker Pacific Aerospace in 2000, Lufthansa Technik AG strengthened its worldwide presence in the repair and overhaul of landing gears," said Knut Wiszniewski, the Director of Finance for Lufthansa Technik AG and the President of LHT Acquisition Corporation. "The tender offer and merger will allow both Lufthansa Technik AG and Hawker Pacific Aerospace to take advantage of, and build upon, the strengths of each other's businesses as well as the relationship that has been formed between the two companies since 2000. Lufthansa Technik AG believes Hawker Pacific Aerospace will have substantial opportunities for growth and expansion in the future as a part of the worldwide group of Lufthansa Technik AG and its subsidiaries."

D. F. King & Co., Inc. is serving as the Information Agent in connection with the tender offer.

ABOUT HAWKER PACIFIC AEROSPACE

Hawker Pacific Aerospace is a leading provider of landing gear maintenance services. The Company repairs and overhauls aircraft and helicopter landing gear, hydromechanical components, wheels, brakes and braking systems for a diverse international customer base, including major commercial airlines, air cargo operators, domestic government agencies, aircraft leasing companies, aircraft parts distributors and OEMs. The Company's common stock trades on the NASDAQ National Market(R) under the symbol HPAC. For more information, visit Hawker Pacific Aerospace's website at www.hawker.com.