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DISCOVERY LIMITED - Rights Issue declaration Announcement

Release Date: 24/02/2015 09:00
Code(s): DSY     PDF:  
Wrap Text
Rights Issue declaration Announcement

DISCOVERY LIMITED 
(Incorporated in the Republic of South Africa)
(Registration number 1999/007789/06)
JSE share code: DSY ISIN: ZAE000022331
(“Discovery” or the “Company”)

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED
STATES, AUSTRALIA, CANADA OR JAPAN. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM AN OFFER
OF SECURITIES IN THE UNITED STATES OR ANY OTHER JURISDICTION.

RIGHTS ISSUE DECLARATION ANNOUNCEMENT

1.   Introduction

Discovery shareholders are referred to the announcement released on the Stock Exchange News Service (“SENS”) today
relating to the Company’s interim results for the six months ended 31 December 2014, in which the Company declared its
intention to undertake an underwritten, renounceable rights issue to qualifying Discovery shareholders (“Rights Issue”).

2.   Rationale for the Rights Issue

The Board has resolved to raise capital to pursue distinct opportunities for additional growth:
-    In the context of the UK, the rationale behind the acquisition of The Prudential Assurance Company Limited’s
     (“Prudential”) remaining 25% shareholding in the UK joint venture was to pursue strong, profitable growth and further
     opportunities. In particular, VitalityLife presents a strong case for further investment, given the success of the Vitality-
     integrated life insurance product, the scale and reach of the distribution and wellness network, and attractive returns
     on new business. Historically, new business was funded through the Prudential structure. Going forward, to maintain
     the rate of growth, additional capital is required.
-    In the South African Primary Market, Discovery is pursuing adjacent opportunities, which will require capital to fully
     pursue.

3.   Terms of the Rights Issue

The Rights Issue will be offered at an issue price of R90.00 per Discovery share.

The Rights Issue will raise proceeds of between R4 billion and R5 billion (which amount shall not exceed R5 billion). The
final terms of the Rights Issue, including the final offer size, will be announced on the finalisation date on or before 10 March
2015.

Qualifying Discovery shareholders will be entitled to apply for additional Rights Issue shares over and above their
entitlement.

4.   Shareholder commitments and underwriting

Rand Merchant Insurance Holdings Limited (“RMIH”), which holds 25.0% of Discovery shares, has irrevocably committed to
follow its rights pursuant to the Rights Issue. Discovery directors and senior management, who collectively hold 12.1% of
Discovery shares, have irrevocably committed to follow their rights pursuant to the Rights Issue.

The 62.9% balance of the Rights Issue is underwritten by RMIH.

In addition, Discovery directors and senior management, who collectively hold 1.4% of Discovery shares have confirmed in
writing to the Company that they intend to follow their full Rights Issue entitlement.

5.   Salient dates and times of the Rights Issue

The proposed salient dates and times for the Rights Issue are set out below:

                                                                                                                     2015

Finalisation date on or about                                                                           Tuesday, 10 March

Last day to trade in Discovery shares (cum rights) in order to qualify to participate in the Rights     Friday, 13 March
Issue on                                                                                                    

Shares commence trading ex rights on the JSE at 09h00 on                                                Monday, 16 March

Listing of and trading in the letters of allocation commences under JSE code DSYN and ISIN,             Monday, 16 March
ZAE000201430 at 09h00 on                                                                                     

Rights Issue circular posted on company website on                                                      Monday, 16 March

Rights Issue circular and form of instruction (where applicable) posted to qualifying, certificated     Tuesday, 17 March
Discovery shareholders on 
                                                                                                
Record date for purposes of determining the shareholders entitled to participate in the Rights          Friday, 20 March
Issue, at the close of business on                                                                      

Rights Issue opens at 09h00 on                                                                          Monday, 23 March

In respect of qualifying certificated Discovery shareholders, letters of allocation credited to an
electronic account held with the transfer secretaries at 09:00 on                                       Monday, 23 March

In respect of qualifying dematerialised Discovery shareholders, CSDP or broker accounts
credited with letters of allocation at 09:00 on                                                         Monday, 23 March

Rights Issue circular, where applicable, posted to qualifying dematerialised Discovery
shareholders on                                                                                        Tuesday, 24 March
                                                                                                 
Last day to trade in letters of allocation in order to participate in the Rights Issue on             Thursday, 26 March

In respect of qualifying certificated Discovery shareholders wishing to sell all or some of their     
letters of allocation, forms of instruction to be lodged with the transfer secretaries by 12:00 on    Thursday, 26 March

Listing of Rights Issue shares on the JSE at 09h00 on                                                   Friday, 27 March

In respect of qualifying certificated Discovery shareholders (or their renouncees) wishing to
exercise all or some of their rights, payment to be made and forms of instruction to be lodged          
with the transfer secretaries by 12:00 on                                                              Thursday, 2 April

Rights Issue closes at 12h00                                                                           Thursday, 2 April

Record date for letters of allocation on                                                               Thursday, 2 April

Rights Issue shares issued on                                                                           Tuesday, 7 April

In respect of qualifying dematerialised Discovery shareholders (or their renouncees), CSDP or
broker accounts debited with the aggregate Rights Issue price and updated with Rights Issue        
shares at 09:00 on                                                                                      Tuesday, 7 April

In respect of qualifying certificated Discovery shareholders (or their renouncees), share               Tuesday, 7 April
certificates in respect of Rights Issue shares posted on or about

Results of the Rights Issue announced on SENS on                                                        Tuesday, 7 April

Results of the Rights Issue published in the press on                                                 Wednesday, 8 April

In respect of successful excess applications (if applicable), rights issue shares issued to
qualifying dematerialised Discovery shareholders and/or share certificates posted to qualifying        Thursday, 9 April
certificated Discovery shareholders on or about

In respect of unsuccessful excess applications (if applicable), refund payments made to
certificated Discovery shareholders on or about                                                        Thursday, 9 April

Notes:
1.    All times referred to in the announcement are local times in South Africa.
2.    Qualifying dematerialised Discovery shareholders (or their renouncees) will have their accounts at their CSDP automatically
      credited with their rights
3.    CSDPs effect payment in respect of dematerialised Discovery shareholders (or their renouncees) on a delivery versus payment
      basis.
4.    Holders of dematerialised Discovery shares are required to notify their CSDP or broker of the action they wish to take in respect
      of the Rights Issue in the manner and by the time stipulated in their custody agreements.
5.    Qualifying certificated Discovery shareholders (or their renouncees) will have their rights credited to an account with the transfer
      secretaries.
6.    Discovery share certificates may not be dematerialised or rematerialised between Monday, 16 March 2015 and Friday, 20 March
      2015, both days inclusive.
7.    Share certificates will be posted at the risk of the qualifying certificated Discovery shareholders (or their renouncees)
8.    Any material changes to the dates and times above will be announced on SENS.



6.      Conditions precedent

The implementation of the Rights Issue is subject to the fulfilment of the following conditions:
-    approval being obtained from the JSE Limited (“JSE”) for the Rights Issue circular; and
-    approval being obtained from the JSE for the listing of the letters of allocation and the listing of the Rights Issue Shares.

7.      Further notices

It is anticipated that the finalisation announcement for the Rights Issue, including the final terms of the Rights Issue, will be
released on SENS on or about Tuesday, 10 March 2015 and in the South African press on or about Wednesday, 11 March
2015.

The Rights Issue circular and a form of instruction in respect of a letter of allocation will be posted to qualifying certificated
Discovery shareholders on Tuesday, 17 March 2015. The Rights Issue circular will be posted to qualifying dematerialised
Discovery shareholders registered on the record date for the Rights Issue on or about Tuesday, 24 March 2015.


Johannesburg
24 February 2015

Bookrunner, lead financial adviser and sponsor to Discovery
Rand Merchant Bank (A division of FirstRand Bank Limited)

Financial adviser to Discovery
Tamela Holdings Pty Ltd

South African legal counsel to Discovery
ENS Africa

International legal counsel to Discovery
Davis Polk & Wardwell London LLP.

This announcement is restricted and is not for release, publication or distribution, in whole or in part, directly or indirectly, in
or into the United States, Australia, Canada, Japan or any other jurisdiction in which such release, publication or distribution
would be unlawful. This announcement is for information purposes only, does not purport to be full or complete, is subject to
change and shall not constitute or form part of an offer or solicitation of an offer to purchase or subscribe for securities in the
United States or any other jurisdiction. No reliance may be placed for any purpose on the information contained in this
announcement or its accuracy or completeness.

The Rights Issue shares have not been and will not be registered under the United States Securities Act of 1933, as
amended (the "Securities Act"), and may not be offered or sold, directly or indirectly, in the United States, absent registration
or an exemption from, or transaction not subject to, the registration requirements of the Securities Act. There will be no
public offer of the Rights Issue shares in the United States.

Neither this announcement nor the Rights Issue constitutes or is intended to constitute an offer to the public in South Africa
in terms of the South African Companies Act 71 of 2008 (as amended).

In member states of the European Economic Area (“EEA”) which have implemented the Prospectus Directive (each, a
“Relevant Member State”), this announcement and any offer if made subsequently is directed exclusively at persons who
are “qualified investors” within the meaning of the Prospectus Directive (“Qualified Investors”). For these purposes, the
expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including Directive 2010/73/EU,
to the extent implemented in a Relevant Member State), and includes any relevant implementing measure in the Relevant
Member State.

In the United Kingdom this announcement is only being distributed to, and is only directed at, and any investment or
investment activity to which this announcement relates is available only to, and will be engaged in only with, Qualified
Investors who are (i) investment professionals falling with Article 19(5) of the UK Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (the “Order”); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order,
or (iii) other persons to whom it may otherwise be lawfully communicated (all such persons together being referred to as
“relevant persons”). Persons who are not relevant persons should not take any action on the basis of this announcement
and should not act or rely on it.

This announcement has been issued by and is the sole responsibility of Discovery. No representation or warranty, express
or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the advisers or
by any of their respective affiliates or agents as to, or in relation to, the accuracy or completeness of this announcement or
any other written or oral information made available to or publicly available to any interested party or its advisers, and any
liability therefore is expressly disclaimed.

This announcement does not purport to identify or suggest the risks (direct or indirect) which may be associated with an
investment in the securities. Any investment decision to buy securities in the Rights Issue must be made solely on the basis
of publicly available information which has not been independently verified by Rand Merchant Bank (A division of FirstRand
Bank Limited).

Rand Merchant Bank (A division of FirstRand Bank Limited) is acting for Discovery and no one else, in connection with the
Rights Issue and will not be responsible to anyone other than Discovery for providing the protections offered to clients of the
joint advisers, nor for providing advice in relation to the Rights Issue.

Date: 24/02/2015 09:00:00 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.

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