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14-11-2006

Stork concludes: Centaurus and Paulson do not provide credible alternative



Stork announces today that the Management Board and Supervisory Board have come to the conclusion that the proposal, as put forward by Centaurus and Paulson ("C&P") at the EGM of 12 October 2006, does not provide a credible alternative to Stork's strategy and is not in the interests of the company, its shareholders and other stakeholders. Therefore, Stork cannot accept this proposal.

Stork has, on the basis of a careful review of the materials presented by C&P at the last EGM and a thorough examination of the underlying assumptions, come to the following conclusion:
 
  1. C&P's presumption that it is a necessity for Stork to pursue a "Tier 1" position in aerospace is not supported by the relevant trends in the market and ignores the current position and potential of Stork as a technology driven specialist supplier in its markets.
  2. Aerospace, Food Systems and Technical Services have significant potential for further value creation and continue to benefit from Stork's overall size and strength. Divesting the non-Aerospace activities would prevent shareholders from fully benefiting from this potential and there is no compelling reason to do so.
  3. Execution of the proposal of C&P would adversely affect the risk profile of Stork while it is yet unproven that this increased risk would also be appropriately rewarded. It would not put the Aerospace division in a better position to execute its strategy. Furthermore, implementation of the proposal and the demanded urgency are likely to lead to significant uncertainty and execution risks that will have a negative impact on shareholder value.

 
Based on the analysis of the proposal and the conclusion as stated above, the Management and Supervisory Boards consider that implementing C&P's proposal would be irresponsible and, taking into account the Boards' responsibilities under Dutch Corporate Governance, they therefore cannot accept the outcome of the vote at the EGM of 12 October 2006.
 
CEO Sjoerd Vollebregt commented: "We have carefully considered and analysed the proposal from Centaurus and Paulson which encompasses a drastic change of our successful strategy from the last years. We agree with C&P that there is substantial value creation potential within Stork, yet after a thorough analysis we have concluded that this will not be realized by executing their proposal. Apart from the operational and execution risks that are inherent to a drastic change as they propose, we have concluded that the proposal itself is based on an incorrect analysis and that implementation would not be in the best interest of Stork, its shareholders and other stakeholders. We will now focus again on Stork's operations in order to further pursue possibilities for accelerated growth, an ambition we share with our shareholders."
 
 
Statement as appendix
In the shareholder letter attached to this press release, further detail is provided on the analysis of the proposal and why the Management and Supervisory Boards have come to this conclusion. This shareholder letter forms an integral part of this press release.
 
 
Further explanation 11.00 CET:
Conference call for analysts and press (English language).
Dial in numbers:       +44 207 153 20 27   (UK)
                                    +31 45 631 6901      (NL)
 
 
Press information:
Stork N.V.
Carine Brouwers
Tel.: +31 (0)35 695 75 75

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