Cedar Group Inc. files offer to acquire remaining shares of the McConnell Dowell Corp.

MONTREAL, Canada--(BUSINESS WIRE)--Feb. 21, 1996--CEDAR GROUP INC. (NASDAQ/ NMS: CGMV; VSE: CGM) Chairman, Michel L. Marengere today announced that Cedar Group Inc., through its Australian subsidiary Cedar Group Australia Pty Ltd. (collectively "Cedar"), has lodged its Part A Offer statement with the Australian Securities Commission to acquire all of the remaining shares of McConnell Dowell Corp. ("MDC").

Cedar had previously announced that it had acquired for cash 14.9% of the shares of MDC from Morrison Knudsen Corp. ("MK") of Boise, Idaho, and had contracted to acquire an additional 5.0% from MK, which was subject to Australia's Foreign Investment Review Board (FIRB).

On Feb. 16, 1996, Cedar was advised that it had received clearance from FIRB for its ownership of MDC shares. Cedar's offer for the remaining 80.1% of MDC's equity is for a cash price of A$1.40 per share and is now subject only to acquiring an aggregate minimum of 60% of the shares of MDC.

MDC is a major Australian infrastructure engineering and construction group, with operations throughout Asia, Australia and New Zealand. MDC sales were A$316 million in fiscal year ending June, 1995 (US$237 million) and its pre-tax earnings were A$28 million (US$21 million) up from a loss of A$5.5 million (US$4.1 million), after extraordinary loss of A$12.5 million (US$9.4 million) in fiscal 1994. MDC has a backlog of more than A$200 million (US$150 million). MDC shares are listed on the stock exchanges of Australia and New Zealand (Symbol MDC).

The total transaction, valued at A$58 million, is to be financed from Cedar's resources and from a senior financing facility to be made available from BT Commercial Corp. ("BTCC"). Cedar and BTCC signed a commitment letter on Feb. 20, 1996. In addition, Cedar has retained the advisory services of BT Corporate Finance Limited and of County NatWest Securities Australia Limited.

The acquisition of MDC represents a significant step in Cedar's strategy to globalize its operations and will give it immediate access to the rapidly growing Asian infrastructure market as well as provide synergies with Cedar's subsidiaries, Dominion Bridge Inc. and Steen Contractors Limited for their Pacific Rim operations.

It is Cedar's intention to retain MDC's listing as a public corporation both on the Australian and on the New Zealand stock exchanges and to broaden the company's shareholder base as it expands its markets.

CEDAR GROUP INC., a Delaware corporation registered in Conshohocken, Pa., is an international engineering, infrastructure company, employing advanced materials technology with operations and projects in North America, Europe and Asia. -0- Editor's Note: This news release is neither approved nor disapproved by the Vancouver Stock Exchange.

CONTACT: Cedar Group Inc.

Nicolas Matossian, 514/634-3550

or

Strategic Growth International

Stan Altschuler/Richard Cooper, 516/829-7111