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FSR/DSY - FirstRand/Discovery - Joint announcement regarding the proposed unbundling of FirstRand`s shareholding in Discovery and FirstRand cautionary announcement FirstRand Limited (Incorporated in the Republic of South Africa) (Registration number: 1966/010753/06) ISIN: ZAE000066304 Share Code (JSE): FSR Share Code (NSX): FST ("FirstRand" or "the company") Discovery Holdings Limited (Incorporated in the Republic of South Africa) (Registration number: 1999/007789/06) ISIN: ZAE000022331 Share Code (JSE): DSY ("Discovery") Joint announcement regarding the proposed unbundling of FirstRand`s shareholding in Discovery and FirstRand cautionary announcement FirstRand, a 57.1% shareholder in Discovery, and Discovery wish to announce that the FirstRand Board ("the board") intends to seek shareholder approval to unbundle FirstRand`s shareholding in Discovery ("proposed unbundling"). The proposed unbundling will provide FirstRand shareholders with a direct shareholding in Discovery and is expected to improve the liquidity of the trading in Discovery shares on the JSE Limited. In addition, the proposed unbundling is expected to result in an ownership structure that will increase Discovery`s strategic flexibility thereby facilitating Discovery`s expansion into investment and other financial services products currently also provided by FirstRand. In order to follow its rights in Discovery`s claw-back offer in 2003, FirstRand raised loan funding of approximately R553 million. Prior to the proposed unbundling, FirstRand intends to dispose of such number of Discovery shares so as to ensure that this liability, after taking into account any consequential taxes, is settled in full. In settlement of existing pre-emptive rights, these Discovery shares will be offered to certain Discovery executives and may, by agreement, be offered to the Discovery Holdings Limited Share Trust and RMB Holdings Limited ("RMBH") ("FirstRand offer"). Discovery executives have indicated their appetite to increase their Discovery shareholding and the FirstRand offer provides them with the opportunity to do so. The board has been advised that RMBH, a 30.1% shareholder in FirstRand, intends to retain the Discovery shares it receives pursuant to the proposed unbundling as a core strategic investment. Subject to all the necessary approvals being obtained, it is expected that the proposed unbundling will be implemented in November 2007. The proposed unbundling may have a material impact on the price of FirstRand`s securities and accordingly, FirstRand shareholders are advised to exercise caution when dealing in their FirstRand shares until a further announcement is made, which announcement is expected on or about 13 September 2007. Sandton 4 September 2007 Merchant bank and sponsor to FirstRand Rand Merchant Bank, a division of FirstRand Bank Limited Financial advisor to Discovery and transaction sponsor Deutsche Securities (SA) (Proprietary) Limited Legal advisor to FirstRand Webber Wentzel Bowens Legal advisor to Discovery edward nathan sonnenbergs Date: 04/09/2007 10:55:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
