Discovery - Issue of shares for cash following the redemption of preference

Discovery -    Issue of shares for cash following the redemption of preference  
               shares                                                           
DISCOVERY HOLDINGS LIMITED                                                      
(Incorporated in the Republic of South Africa)                                  
(Registration number: 1999/007789/06)                                           
ISIN: ZAE000022331                                                              
Share Code: DSY                                                                 
("Discovery")                                                                   
ISSUE OF SHARES FOR CASH FOLLOWING THE REDEMPTION OF PREFERENCE SHARES          
Introduction                                                                    
Shareholders are referred to the announcement released on SENS on 31 August 2004
relating to the issue of a total of 12 811 590 Discovery ordinary shares to     
certain employees effective 30 June 2004, over a three-year period, in terms of 
an authority obtained from shareholders at the annual general meeting held on 15
November 2001.                                                                  
Details of the issue of shares for cash                                         
Shareholders are advised that the third and final tranche of 4 270 530 ordinary 
shares in Discovery have been issued on 30 June 2006 at an issue price of R12.57
per Discovery ordinary share ("the Issue"), being the price determined as at 30 
June 2004. The Issue is pursuant to the redemption of the third tranche of 495  
000 Discovery Life Preference Shares ("Preference Shares") at a premium of      
R108.44 per Preference share.                                                   
Financial effects                                                               
The financial effects presented below have been prepared for illustrative       
purposes only and because of their nature, may not give a fair reflection of    
Discovery"s financial position nor the effect on earnings going forward.        
  ________________ ____________ ____________  ____________  ____________        
Actual       Pro forma     Increase/     Increase/           

                   before the   after the     (Decrease)    (Decrease)          
                   Issue(2)     Issue(1)      (cents)       (%)                 
                   (cents)      (cents)                                         
________________ ____________ ____________  ____________  ____________        
  Earnings per     36.8         36.5          (0.3)         (0.8)               
  share                                                                         
  ________________ ____________ ____________  ____________  ____________        
Headline         28.8         28.5          (0.3)         (1.0)               
  earnings per                                                                  
  share                                                                         
  ________________ ____________ ____________  ____________  ____________        
Net asset value  697.7        692.2         (5.5)         (0.8)               
  per share                                                                     
  ________________ ____________ ____________  ____________  ____________        
  Tangible net     688.5        683           (5.5)         (0.8)               
asset value per                                                               
  share                                                                         
  ________________ ____________ ____________  ____________  ____________        
     Notes:                                                                     
*    The pro forma effects are based on the issue of 4 270 530 Discovery   
          ordinary shares;                                                      
     *    The "Actual before the Issue" column has been extracted from          
          Discovery"s interim report for the six months ended 31 December 2005; 
*    The pro forma earnings per share and headline earnings per share after
          the Issue represents the financial information of Discovery for the   
          six months ended 31 December 2005, adjusted for the redemption of the 
          Preference Shares and the Issue based on the assumption that the      
redemption of the Preference Shares and the Issue was implemented on  
          30 June 2005; and                                                     
     *    The pro forma net asset value per share and tangible net asset value  
          per share after the Issue represents the financial position of        
Discovery as at 31 December 2005, adjusted for the redemption of the  
          Preference Shares and the Issue based on the assumption that the      
          redemption of the Preference Shares and the Issue was implemented on  
          31 December 2005.                                                     
Sandton                                                                         
30 June 2006                                                                    
Sponsor                                                                         
RAND MERCHANT BANK (A division of FirstRand Bank Limited)                       
Date: 30/06/2006 10:01:07 AM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department