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STEINHOFF INTERNATIONAL HOLDINGS N.V. - Recommended Cash Offer For Poundland Group Plc By Steinhoff Europe Ag To Be Effected By Way Of A Scheme Of Arrangeme

Release Date: 13/07/2016 08:32
Code(s): SNH     PDF:  
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Recommended Cash Offer For Poundland Group Plc By Steinhoff Europe Ag To Be Effected By Way Of A Scheme Of Arrangeme

STEINHOFF INTERNATIONAL HOLDINGS N.V.

(Incorporated in the Netherlands)

(Registration number: 63570173)

Share code: SNH

ISIN: NL0011375019



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION

                  THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

                                                                                        13 July 2016

                                 RECOMMENDED CASH OFFER

                                           for

                                      Poundland Group PLC
                                           by
                                       Steinhoff Europe AG

                                        to be effected
                                 by way of a Scheme of Arrangement
                               under Part 26 of the Companies Act 2006

Summary
-     The boards of Steinhoff International Holdings N.V. (“Steinhoff”) and Poundland Group PLC
      (“Poundland”) are pleased to announce that they have reached agreement on the terms of a
      recommended cash offer pursuant to which Steinhoff Europe AG (“SEAG”) or a wholly-owned
      subsidiary of SEAG (with the support of its ultimate parent company, Steinhoff) shall acquire
      the entire issued and to be issued share capital of Poundland not already directly or indirectly
      owned by it (the “Offer”).

-     Each Poundland Shareholder shall be entitled to receive 222 pence in cash for each
      Poundland Share held (the “Cash Value”), comprising:

      -       under the terms of the Offer, 220 pence in cash for each Poundland Share held by
              each Poundland Shareholder (the “Offer Price”); and

      -       the final dividend of two pence per Poundland Share announced in the Poundland
              results announcement for the year ended 27 March 2016, dated 16 June 2016 (the
              “Agreed Dividend”), which will be paid on 23 September 2016 to holders of
              Poundland Shares whose names are on the register at the close of business on
              9 September 2016,

      valuing the entire issued and to be issued share capital of Poundland at approximately £597
      million on a fully diluted basis.

-     The Cash Value of 222 pence in cash represents a premium of approximately:
    -      40.3 per cent. to the Closing Price per Poundland Share of 158.25 pence on 13 June
           2016 (being the last Business Day prior to the first acquisition of Poundland Shares
           by SEAG); and

    -      13.3 per cent. to the Closing Price per Poundland Share of 196 pence on 12 July 2016
           (being the latest practicable date prior to publication of this Announcement).

-   The Offer Price of 220 pence represents a premium of approximately 39.0 per cent. to the
    Closing Price per Poundland Share of 158.25 pence on 13 June 2016 (being the Business
    Day prior to the first acquisition of Poundland Shares by SEAG).

-   It is intended that the Offer will be implemented by way of a Court-sanctioned scheme of
    arrangement under Part 26 of the Companies Act (or, if SEAG elects, with the consent of the
    Panel, a takeover offer under Part 28 of the Companies Act).

-   The Poundland Directors, who have been so advised by J.P. Morgan Cazenove and
    Rothschild as to the financial terms of the Offer, consider the terms of the Offer to be
    fair and reasonable. In providing advice to the Poundland Directors, J.P. Morgan
    Cazenove and Rothschild have taken into account the commercial assessments of the
    Poundland Directors. Rothschild is providing independent financial advice to the
    Poundland Directors for the purposes of Rule 3 of the Takeover Code.

-   Accordingly, the Poundland Directors intend to recommend unanimously that
    Poundland Shareholders vote in favour of the Scheme at the Court Meeting and the
    resolutions to be proposed at the General Meeting as the Poundland Directors who
    hold Poundland Shares have irrevocably undertaken to do (in their personal capacity)
    in respect of their own beneficial holdings (or those they otherwise control the exercise
    of) of 14,719,261 Poundland Shares, representing approximately 5.5 per cent. of the
    share capital of Poundland in issue on 12 July 2016 (being the latest practicable date
    prior to the date of publication of this Announcement).

-   As at 12 July (being the latest practicable date prior to publication of this Announcement)
    SEAG was directly interested in 63,473,352 Poundland Shares, representing approximately
    23.6 per cent. of Poundland’s issued share capital. SEAG has undertaken in the Co-operation
    Agreement to vote in favour of the resolutions to be proposed at the General Meeting in
    respect of its entire beneficial holding of Poundland Shares (but SEAG will not be permitted
    to vote at the Court Meeting).

    Taking into account the irrevocable undertakings from the Poundland Directors and Canada
    Life Investments, Steinhoff has therefore received irrevocable undertakings to vote in favour
    of (i) the Scheme at the Court Meeting representing, in aggregate, approximately 9 per cent.
    of Poundland Shares held by holders eligible to vote at the Court Meeting and (ii) the
    resolutions to be proposed at the General Meeting representing, in aggregate, approximately
    7 per cent. of Poundland’s issued share capital and, (for purposes of the General Meeting
    only) when aggregated with the Poundland Shares that Steinhoff already holds (through
    SEAG), 30.6 per cent. of the Poundland share capital in issue, in each case on 12 July 2016
    (being the latest practicable date prior to publication of this Announcement).

    Further details of these irrevocable undertakings are set out in Appendix III to this
    Announcement.

-   The Offer shall be put to Poundland Shareholders at the Court Meeting and at the General
    Meeting. In order to become Effective, the Scheme must be approved by a majority in number
    of the Poundland Shareholders voting at the Court Meeting, either in person or by proxy,
      representing at least 75 per cent. in value of the Poundland Shares voted (in both cases
      excluding SEAG who will not be permitted to vote at the Court Meeting). In addition, a special
      resolution implementing the Scheme must be passed by holders of Poundland Shares
      representing at least 75 per cent. of votes cast at the General Meeting, either in person or by
      proxy (including SEAG who will be permitted to vote at the General Meeting).

-     The Scheme Document, containing further information about the Offer and notices of the Court
      Meeting and the General Meeting shall be published as soon as practicable and, in any event,
      within 28 days of this Announcement, unless SEAG and Poundland otherwise agree, and the
      Takeover Panel consents, to a later date. Subject to the Conditions and certain further terms
      set out in Appendix I to this Announcement, the Offer is expected to become Effective by mid-
      September 2016. The Scheme Document will contain an expected timetable for the Offer
      process.

Commenting on the Offer, Darren Shapland, Chairman of Poundland, said:

“The Poundland Board believes that SEAG’s all-cash offer presents Poundland shareholders with
an opportunity to realise their shareholding at a certain and attractive price, securing earlier delivery
of the Poundland Group’s medium term value than could be expected from the ongoing turnaround
process against a background of increasing economic uncertainty in the UK and a more challenging
trading environment.

The single-price sector has undergone significant modernisation and professionalisation in recent
years and is now a mainstream feature of UK retail. Through the hard work and dedication of our
many thousands of talented colleagues, Poundland has played a pivotal role in that transformation.
Steinhoff is a well-capitalised, international business with a clear and proven commitment to value
retailing. They share our vision for the growth and expansion of Poundland and, as such, we believe
they are a suitable and appropriate partner for our colleagues, our suppliers and stakeholders.”

Commenting on the Offer, Markus Jooste, CEO of Steinhoff, said:

“The Board of Steinhoff and its management team are enthusiastic about the opportunities that this
transaction brings: we believe that there is significant merit in bringing Poundland into Steinhoff’s
global network. Steinhoff is developing a fast-growing, price-led retail business across the UK and
the rest of Europe. Poundland would be a complementary fit to this growth story.

Steinhoff recognises the strength and value of the Poundland management team and anticipates
that they will play a key role in the ongoing growth and development of Poundland as part of the
Steinhoff group. We look forward to welcoming Poundland employees to be part of one of Europe’s
leading multi-format discount retailers.”

This summary should be read in conjunction with, and is subject to, the full text of this
Announcement (including its Appendices). The Offer shall be subject to the Conditions and
further terms set out in Appendix I to this Announcement and to the full terms and conditions
which shall be set out in the Scheme Document. Appendix II to this Announcement contains
the sources of information and bases of calculations of certain information contained in this
Announcement, Appendix III contains a summary of the irrevocable undertakings received
in relation to this Offer and Appendix IV contains definitions of certain expressions used in
this summary and in this Announcement.

Further Information
Linklaters LLP are providing legal advice to Steinhoff and SEAG. Freshfields Bruckhaus Deringer
LLP are providing legal advice to Poundland.
Enquiries

 Steinhoff and SEAG                                                    Tel: +27 (0)21 808 0711
 Mariza Nel, Director, Corporate Services (Investor Relations)
 Nick Agarwal (UK Press)                                               Tel: +44 (0)75 6810 1045
 Investec Bank plc (financial adviser to Steinhoff and SEAG)           Tel: +44 (0)20 7597 4000
 Andrew Pinder / David Anderson
 Sara Hale / Henry Reast (Corporate Broking)
 Poundland
 Darren Shapland, Chairman                                             Tel: +44 (0)12 1526 8688
 Philip Dorgan, Head of Investor Relations                             Tel: +44 (0)12 1568 7000
 J.P. Morgan Cazenove (joint financial adviser and corporate           Tel: +44 (0) 20 7742 4000
 broker to Poundland)
 Toby Radford / Caroline Thomlinson

 Mark Breuer / James Robinson
 Rothschild (joint financial adviser to Poundland)                     Tel: +44 (0) 20 7280 5000

 Majid Ishaq
 John Byrne
 Shore Capital (corporate broker to Poundland)                         Tel: +44 (0) 20 7408 4050
 Dru Danford

 Patrick Castle
 Citigate Dewe Rogerson (PR adviser to Poundland)

 Simon Rigby                                                           Tel: +44 (0) 20 7282 2847
 Kevin Smith                                                           Tel: +44 (0) 20 7282 1054
 Nick Hayns                                                            Tel: +44 (0) 20 7282 1032
PSG Capital Proprietary Limited (JSE Sponsor)


Important Notices

Investec Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial
Conduct Authority and the Prudential Regulation Authority in the UK. Investec Bank plc is acting
exclusively as financial adviser to Steinhoff and SEAG and no one else in connection with the Offer
and shall not be responsible to anyone other than Steinhoff and SEAG for providing the protections
afforded to clients of Investec Bank plc nor for providing advice in connection with the Offer or any
matter referred to herein.

J.P. Morgan Limited, which conducts its UK investment banking business as J.P. Morgan Cazenove
("J.P. Morgan Cazenove"), is authorised and regulated in the United Kingdom by the Financial
Conduct Authority. J.P. Morgan Cazenove is acting as financial adviser exclusively for Poundland
and no one else in connection with the matters set out in this Announcement and will not regard any
other person as its client in relation to the matters in this Announcement and will not be responsible
to anyone other than Poundland for providing the protections afforded to clients of J.P. Morgan
Cazenove, nor for providing advice in relation to any matter referred to herein.

N. M. Rothschild & Sons Limited, which is authorised by the Prudential Regulation Authority and
regulated by the FCA and the Prudential Regulation Authority in the United Kingdom, is acting
exclusively for Poundland and no one else in connection with the Offer and will not be responsible
to anyone other than Poundland for providing the protections afforded to its clients or for providing
advice in relation to the Offer or any other matters referred to in this Announcement.

Shore Capital Stockbrokers Limited (“Shore Capital”) which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority is acting as corporate broker to Poundland and no one
else in connection with the Offer and other matters described in this Announcement and will not be
responsible to anyone other than Poundland for providing the protections afforded to clients of Shore
Capital or for providing advice in relation to the Offer and other matters described in this
Announcement.

This Announcement is for information purposes only and does not constitute an offer to sell or an
invitation to purchase any securities or the solicitation of an offer to buy any securities, pursuant to
the Offer or otherwise. The Offer shall be made solely by means of the Scheme Document or any
document by which the Offer is made which shall contain the full terms and Conditions of the Offer,
including details of how to vote in respect of the acquisition.

This Announcement has been prepared for the purpose of complying with English law and the
Takeover Code and the information disclosed may not be the same as that which would have been
disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions
outside the United Kingdom.

Poundland shall prepare the Scheme Document to be distributed to holders of Poundland Shares.
Poundland, SEAG and Steinhoff urge Poundland Shareholders to read the Scheme Document when
it becomes available because it shall contain important information relating to the Offer.

This Announcement does not constitute a prospectus or prospectus equivalent document.

Overseas Shareholders

The release, publication or distribution of this Announcement in certain jurisdictions may be
restricted by law. Persons who are not resident in the United Kingdom or who are subject to other
jurisdictions should inform themselves of, and observe, any applicable requirements.

The Offer relates to shares of a UK company and is proposed to be effected by means of a scheme
of arrangement under the laws of England and Wales. A transaction effected by means of a scheme
of arrangement is not subject to proxy solicitation or tender offer rules under the US Securities
Exchange Act of 1934 (the “US Exchange Act”). Accordingly, the Offer is subject to the disclosure
requirements, rules and practices applicable in the United Kingdom to schemes of arrangement,
which differ from the requirements of US proxy solicitation or tender offer rules. However, if SEAG
were to elect to implement the Offer by means of a takeover offer in the circumstances provided for
in this Announcement, such takeover offer shall be made in compliance with all applicable laws and
regulations, including Section 14(e) of the US Exchange Act and Regulation 14E thereunder. Such
a takeover would be made in the United States by SEAG and no one else. In addition to any such
takeover offer, SEAG, certain affiliated companies and the nominees or brokers (acting as agents)
may make certain purchases of, or arrangements to purchase, shares in Poundland outside such
takeover offer during the period in which such takeover offer would remain open for acceptance. If
such purchases or arrangements to purchase were to be made they would be made outside the
United States and would comply with applicable law, including the US Exchange Act.
Unless otherwise determined by SEAG or required by the Takeover Code, and permitted by
applicable law and regulation, the Offer shall not be made available, directly or indirectly, in, into or
from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person
may vote in favour of the offer by any such use, means, instrumentality or form within a Restricted
Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that
jurisdiction. Accordingly, copies of this Announcement and all documents relating to the Offer are
not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent
in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction,
and persons receiving this Announcement and all documents relating to the Offer (including
custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or
from such jurisdictions where to do so would violate the laws in that jurisdiction.

The availability of the Offer to Poundland Shareholders who are not resident in the United Kingdom
may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are
not resident in the United Kingdom should inform themselves of, and observe, any applicable
requirements.

The Offer shall be subject to the applicable requirements of the Takeover Code, the Panel, the
London Stock Exchange, the Financial Conduct Authority and the UKLA.

Forward Looking Statements
This Announcement contains statements about Steinhoff, SEAG and Poundland that are or may be
forward looking statements. All statements other than statements of historical facts included in this
Announcement may be forward looking statements. Without limitation, any statements preceded or
followed by or that include the words “targets”, “plans”, “believes”, “expects”, “aims”, “intends”, “will”,
“may”, “anticipates”, “estimates”, “projects” or words or terms of similar substance or the negative
thereof, are forward looking statements. Forward looking statements include statements relating to
the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii)
business and management strategies and the expansion and growth of Steinhoff’s or Poundland’s
operations and potential synergies resulting from the Offer; and (iii) the effects of government
regulation on Steinhoff’s or Poundland’s business.

Such forward looking statements involve risks and uncertainties that could significantly affect
expected results and are based on certain key assumptions. Many factors could cause actual results
to differ materially from those projected or implied in any forward looking statements. Due to such
uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking
statements, which speak only as of the date hereof. Each of Steinhoff, SEAG and Poundland
disclaims any obligation to update any forward looking or other statements contained herein, except
as required by applicable law.

No profit forecasts or estimates
No statement in this Announcement is intended as a profit forecast or estimate for any period and
no statement in this Announcement should be interpreted to mean that earnings or earnings per
share for Steinhoff or Poundland, as appropriate, for the current or future financial years would
necessarily match or exceed the historical published earnings or earnings per share for Steinhoff or
Poundland, as appropriate.

Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per cent. or more of any
class of relevant securities of an offeree company or of any securities exchange offeror (being any
offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to
be, solely in cash) must make an Opening Position Disclosure following the commencement of the
Offer Period and, if later, following the announcement in which any securities exchange offeror is
first identified. An Opening Position Disclosure must contain details of the person’s interests and
short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to
whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th
Business Day following the commencement of the Offer Period and, if appropriate, by no later than
3.30 pm (London time) on the 10th Business Day following the announcement in which any
securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1 per cent.
or more of any class of relevant securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree
company or of any securities exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person’s interests and short positions in, and rights to subscribe for,
any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror,
save to the extent that these details have previously been disclosed under Rule 8. A Dealing
Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London
time) on the Business Day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or
informal, to acquire or control an interest in relevant securities of an offeree company or a securities
exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and
Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position
Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the
Panel’s website at http://www.thetakeoverpanel.org.uk/, including details of the number of relevant
securities in issue, when the Offer Period commenced and when any offeror was first identified. If
you are in any doubt as to whether you are required to make an Opening Position Disclosure or a
Dealing Disclosure, you should contact the Panel’s Market Surveillance Unit on +44 (0)20 7638
0129.

Publication on Website and Availability of Hard Copies
A copy of this Announcement shall be made available subject to certain restrictions relating to
persons resident in Restricted Jurisdictions on Steinhoff’s and Poundland’s websites at
www.steinhoffinternational.com and www.poundlandcorporate.com respectively by no later than 12
noon (London time) on 14 July 2016. For the avoidance of doubt, the contents of the websites
referred to in this Announcement are not incorporated into and not do form part of this
Announcement.

You may request a hard copy of this Announcement by:

     -   for Steinhoff shareholders, contacting the Company Secretary at Steinhoff UK Holdings
         Limited, 5th Floor Festival House, Jessop Avenue, Cheltenham, Gloucestershire, GL50
         3SH, United Kingdom. Telephone number: +44 (0) 1242 586360; or
     -   for Poundland Shareholders, by writing to Poundland’s registrar at Computershare, The
        Pavilions, Bridgwater Road, Bristol BS13 8AE or by calling them on 0370 707 1028 from
        within the UK or on +44 (0)370 707 1028 if calling from outside the UK.

You may also request that all future documents, announcements and information to be sent to you
in relation to the Offer should be in hard copy form.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments.
Accordingly, figures shown for the same category presented in different tables may vary slightly and
figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that
precede them.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION

                                                                                        13 July 2016

                               RECOMMENDED CASH OFFER

                                         for

                                    Poundland Group PLC
                                          by
                                     Steinhoff Europe AG

                                    to be effected
                             by way of a Scheme of Arrangement
                           under Part 26 of the Companies Act 2006

1   Introduction
    The boards of Steinhoff and Poundland are pleased to announce that they have reached
    agreement on the terms of a recommended cash offer pursuant to which SEAG or a wholly-
    owned subsidiary of SEAG (with the support of its ultimate parent Company, Steinhoff) shall
    acquire the entire issued and to be issued share capital of Poundland not already directly or
    indirectly owned by it. As at 12 July 2016 (being the latest practicable date prior to publication
    of this Announcement) SEAG was directly interested in 63,473,352 Poundland Shares,
    representing approximately 23.6 per cent. of Poundland’s issued share capital.

    It is intended that the Offer is to be effected by means of a Court-sanctioned scheme of
    arrangement under Part 26 of the Companies Act.

2   The Offer
    Under the terms of the Offer, which shall be subject to the Conditions and further terms set
    out in Appendix I to this Announcement and to be set out in the Scheme Document, each
    Poundland Shareholder shall be entitled to receive:

                 for each Poundland Share                 220 pence in cash

    The Offer, together with the Agreed Dividend, values the entire issued share capital of
    Poundland at approximately £597 million on a fully diluted basis.

    The Agreed Dividend of two pence per Poundland Share was announced in the Poundland
    results announcement for the year ended 27 March 2016, dated 16 June 2016, and will be
    paid on 23 September 2016 to holders of Poundland Shares whose names are on the register
    at the close of business on 9 September 2016.

    The Cash Value of 222 pence in cash (being the aggregate of the Offer Price and the Agreed
    Dividend) represents a premium of approximately:

    -       40.3 per cent. to the Closing Price per Poundland Share of 158.25 pence on 13 June
            2016 (being the last Business Day prior to the first acquisition of Poundland Shares
            by SEAG); and

    -       13.3 per cent. to the Closing Price per Poundland Share of 196 pence on 12 July 2016
            (being the latest practicable date prior to publication of this Announcement).
    The Offer Price of 220 pence represents a premium of approximately 39.0 per cent. to the
    Closing Price per Poundland Share of 158.25 pence on 13 June 2016 (being the Business
    Day prior to the first acquisition of Poundland Shares by SEAG).

    It is currently expected that the Scheme Document shall be published in early August, that
    the Court Meeting and the General Meeting shall be held on 7 September 2016 and that the
    Scheme shall become Effective by mid-September 2016.

3   Background to and reasons for the Offer
    Steinhoff has a proven track record of acquiring and successfully integrating relevant
    companies and their brands into its network of retail companies supported by an efficient
    integrated supply chain in Europe, Africa and the Pacific Rim.

    Steinhoff is developing a fast-growing, price-led retail business across the UK and the rest of
    Europe. Steinhoff believes the Poundland business will be an attractive addition to its existing
    multi-format discount retail business, and accelerate the group’s customer proposition and
    growth dynamics.

4   Background to and reasons for the recommendation
    The Poundland Board believes that SEAG’s all-cash offer provides Poundland’s shareholders
    with the opportunity to realise their shareholding at an attractive price and at a significant
    premium to Poundland’s undisturbed share price.

    The past year has been both challenging and transformative for Poundland. The acquisition
    of 99p Stores strengthened Poundland’s position as Europe’s biggest single-price discounter
    and positions it well for the long term, but also placed significant strain on the core business.
    The conversion of 99p Stores to the Poundland fascia was completed ahead of schedule, but
    was more capital intensive and needed more attention from management than expected. Also,
    as Poundland has reported over the past year, the impact of increased competition, falling
    high street footfall, and changing consumer shopping behaviour have impacted performance.

    When considering the Offer, the Poundland Directors have taken into account the current
    market conditions, including the short term and long term challenges and opportunities for the
    business, and the likely time required for Poundland to improve performance and achieve its
    strategy. In addition, the UK’s decision to leave the EU has increased short term uncertainty.
    The Poundland Directors have also considered the benefits that being part of a larger
    diversified retail group would bring to the Poundland business.

    The Poundland Directors considered the Offer with regard to price, deliverability and with
    reference to the range of other strategic options available to Poundland. In particular, the
    Poundland Directors have evaluated the terms of the Offer in relation to the prospects of the
    business and the potential medium term standalone value of Poundland Shares. The
    Poundland Directors have also considered the interests of Poundland employees, customers
    and other stakeholders in addition to the economic benefits to Poundland Shareholders.

    The Poundland Board believes that Steinhoff is a strong, well-capitalised partner which can
    continue to develop the Poundland business. Steinhoff provides Poundland with significantly
    greater access to broader and deeper capital resources and global synergies. The Poundland
    Board expects that Steinhoff will be able to accelerate Poundland’s strategy by expanding its
    routes to market and exploiting the greater scale and reach of Steinhoff’s operations.
    Following careful consideration of the above factors, the Poundland Board believes that the
    Offer reflects an attractive price for the business and provides certainty, in cash, to Poundland
    Shareholders today.

5   Recommendation
    Following careful consideration of the above factors, the Poundland Directors, who
    have been so advised by J.P. Morgan Cazenove and Rothschild as to the financial terms
    of the Offer, consider the terms of the Offer to be fair and reasonable. In providing
    advice to the Poundland Directors, J.P. Morgan Cazenove and Rothschild have taken
    into account the commercial assessments of the Poundland Directors. Rothschild is
    providing independent financial advice to the Poundland Directors for the purposes of
    Rule 3 of the Takeover Code.

    Accordingly, the Poundland Directors intend to recommend unanimously that
    Poundland Shareholders vote in favour of the Scheme at the Court Meeting and the
    resolutions to be proposed at the General Meeting, as the Poundland Directors who
    hold Poundland Shares have irrevocably undertaken to do (in their personal capacity)
    in respect of their own beneficial holdings (or those they otherwise control the exercise
    of) of 14,719,261 Poundland Shares, representing approximately 5.5 per cent. of the
    share capital of Poundland in issue on 12 July 2016 (being the latest practicable date
    prior to the date of publication of this Announcement).

6   Irrevocable undertakings
    Steinhoff has received irrevocable undertakings from each of the Poundland Directors to vote
    in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the
    General Meeting, in respect of a total of 14,719,261 Poundland Shares, representing
    approximately 5.5 per cent. of the share capital of Poundland in issue on 12 July 2016 (being
    the latest practicable date prior to publication of this Announcement). These irrevocable
    undertakings remain binding in the event of a competing offer. Further details of these
    irrevocable undertakings (including the circumstances in which they shall fall away) are set
    out in Appendix III to this Announcement.

    Steinhoff has also received an irrevocable undertaking to vote in favour of the Scheme at the
    Court Meeting and the resolutions to be proposed at the General Meeting from Canada Life
    Investments in respect of a total of 4,075,404 Poundland Shares representing, in aggregate,
    approximately 2 per cent. of Poundland Shares held by holders eligible to vote at the Court
    Meeting and approximately 1.5 per cent. of Poundland’s issued share capital.

    Further details of these irrevocable undertakings are set out in Appendix III to this
    Announcement.

    SEAG has also undertaken in the Co-operation Agreement to vote in favour of the resolutions
    proposed at the General Meeting in respect of its entire beneficial holding of Poundland
    Shares being 63,473,352 Poundland Shares, representing approximately 23.6 per cent. of
    Poundland’s issued share capital. SEAG is not permitted to vote on the Scheme at the Court
    Meeting.

    Taking into account the irrevocable undertakings from the Poundland Directors and Canada
    Life Investments, Steinhoff has therefore received irrevocable undertakings to vote in favour
    of (i) the Scheme at the Court Meeting representing, in aggregate, approximately 9 per cent.
    of Poundland Shares held by holders eligible to vote at the Court Meeting and (ii) the
    resolutions to be proposed at the General Meeting representing, in aggregate, approximately
    7 per cent. of Poundland’s issued share capital and, (for purposes of the General Meeting
    only) when aggregated with the Poundland Shares that Steinhoff already holds (through
    SEAG), 30.6 per cent. of the Poundland share capital in issue, in each case on 12 July 2016
    (being the latest practicable date prior to publication of this Announcement).

7   Information on Steinhoff and SEAG
    Steinhoff is an integrated retailer that manufactures, sources and retails furniture, household
    goods and general merchandise in Europe, Africa and Australasia. Steinhoff’s vertically
    integrated business model is based upon a strategy of sourcing and manufacturing products
    at low cost and distributing them to its value-conscious customer base through its extensive
    retail footprint.

    Steinhoff’s integrated retail divisions comprise of:

         -    Household goods comprising furniture and homeware retail businesses;

         -    General Merchandise focusing on clothing and footwear, accessories and
              homeware; and

         -    Automotive dealerships in South Africa which provide vehicles, parts, insurance,
              accessories and servicing.

    Steinhoff has a primary listing on the Frankfurt Stock Exchange and a secondary listing on
    the Johannesburg Stock Exchange and as at 12 July 2016 (being the latest practicable date
    prior to publication of this Announcement) has a market capitalisation of approximately
    €21 billion. Steinhoff reported revenue and operating profit for the nine-months ended 31
    March 2016 of €9.9 billion and €1.1 billion respectively, and employs approximately 105,000
    people.

    Steinhoff, through SEAG as its wholly owned subsidiary, is a holding company invested
    predominantly in household goods and diversified related industries with interests in the
    United Kingdom, Continental Europe, and the Pacific Rim. It employs a vertically integrated
    and geographically diverse business model, covering the full spectrum from raw material to
    retail outlets across an extensive product range.

8   Information on Poundland
    Poundland is the largest single-price value general merchandise retailer in Europe by both
    sales and by number of stores. Poundland operates a network of over 900 stores across the
    UK, Republic of Ireland, and Spain.

    Poundland is a price-driven, volume-led business offering an extensive range of products
    across 17 categories, with the average Poundland store carrying approximately 3,500 core
    range SKUs, including over 1,000 branded products, including Cadbury, Mars, Heinz, Nestle,
    Colgate, Coca Cola, Walkers and McVities, and a number of own branded products, including
    Jane Asher’s Kitchen, Make-up Gallery cosmetics and Purple Ivy Jewellery.

    Poundland operates from headquarters in Willenhall, West Midlands, and employed on
    average 18,000 colleagues in the financial year ended 27 March 2016. Poundland distribution
    capacity was enhanced in June 2016 with a new purpose built 350,000 sq. ft. distribution
    centre at Wigan.
     In the financial year ended 27 March 2016, Poundland generated revenue of £1,326.0 million
     and Underlying EBITDA* of £56.9 million with an Underlying comparable EBITDA margin* of
     4.6 per cent.
     * Underlying includes contributions from converted 99p stores.


9    Management, employees and locations
     The transaction will create an exciting opportunity for the Poundland management and
     employees to join Steinhoff. Steinhoff recognises the strength and value of the Poundland
     management and employees and considers them to be important to the future success of
     Poundland. Following the completion of the Offer, the existing contractual and statutory
     employment rights of the Poundland executive directors, Poundland Executive Committee
     and employees shall be fully observed and pension obligations complied with, in accordance
     with applicable law.

     Steinhoff’s plans for Poundland do not involve any material change in the conditions of
     employment of Poundland’s employees. Steinhoff has no plans to change Poundland’s places
     of business.

     Steinhoff has agreed to enter into good faith discussions with Poundland to determine the
     treatment of Poundland’s bonus arrangements for the current financial year.

10   Arrangements between Steinhoff and Poundland management

     Steinhoff has agreed that any executive director or member of the Poundland Executive
     Committee who leaves employment within 24 months following the Effective Date for a good
     leaver reason will be eligible to a payment in lieu of any part of his or her notice period that is
     not required to be worked in a single lump sum.

     Steinhoff has acknowledged that Poundland may make grants under the Poundland
     Performance Share Plan and the Poundland Restricted Share Plan prior to the Effective Date
     to satisfy pre-existing obligations to certain key executives, including executive directors and
     members of the Poundland Executive Committee, and Steinhoff has further agreed to offer to
     exchange those awards for equivalent awards over Steinhoff shares or cash of an equivalent
     value. If Poundland has not made such grants prior to the Effective Date, Steinhoff has agreed
     to grant awards over Steinhoff shares or cash awards of an equivalent value no later than
     three months after the Effective Date.

     Various arrangements have also been agreed in relation to the treatment of existing awards
     under the Poundland Performance Share Plan, a plan in which a number of senior employees,
     including executive directors and members of the Poundland Executive Committee,
     participate. Steinhoff has agreed to offer each holder of Performance Share Plan awards
     granted in 2014 the opportunity to exchange one sixth of the Poundland Shares comprised in
     the award for an equivalent award over shares in Steinhoff, subject to performance targets
     that are to be agreed. The treatment of awards granted under the plan in 2015 remains subject
     to discussion between Poundland and Steinhoff.

11   Poundland Share Plans
     Participants in the Poundland Share Plans will be contacted regarding the effect of the Offer
     on their rights under the Poundland Share Plans and appropriate proposals shall be made to
     such participants in due course. Further details of the terms of such proposals shall be
     included in the Scheme Document. Arrangements in relation to the Poundland Performance
     Share Plan are described in paragraph 10 above. In addition, Steinhoff has agreed that
     participants will be given the opportunity to exchange all outstanding options under the
     Poundland Company Share Option Plan and the Poundland Sharesave Scheme for options
     over Steinhoff shares of equivalent value. Exchange will not be offered in relation to awards
     currently outstanding under the Poundland Restricted Share Plan.

     Steinhoff shall enter into good faith discussions to ensure that employees at or below
     executive level shall for a period of at least 12 month after the Effective Date be able to
     participate in broadly comparable arrangements to the ones provided to such employees by
     Poundland.

12   Financing
     The cash consideration payable under the Offer will be funded from the acquisition facility
     provided by Crédit Agricole Corporate and Investment Bank and UniCredit Bank Austria AG.

     Investec Bank plc, financial adviser to Steinhoff and SEAG, is satisfied that sufficient
     resources are available to satisfy in full the cash consideration payable to Poundland
     Shareholders under the terms of the Offer (which, for the avoidance of doubt, does not include
     the Agreed Dividend which is payable by Poundland).

13   Offer-related Arrangements
     Confidentiality Agreement

     Steinhoff and Poundland entered into a confidentiality and standstill agreement on 4 July 2016
     (the “Confidentiality Agreement”) pursuant to which Steinhoff has undertaken to keep
     confidential information relating to Poundland and not to disclose it to third parties (other than
     to permitted disclosees) unless required by law or regulation. These confidentiality obligations
     shall remain in force until (i) completion of the Offer, or, (ii) in the event of termination of
     discussions or negotiations, the expiry of a period of 12 months from the date of the
     Confidentiality Agreement.

     This agreement also contains undertakings from Steinhoff that for a period of nine months
     Steinhoff shall not, without Poundland’s prior written consent, acquire or offer to acquire any
     interest in any shares or other securities of Poundland (which undertaking ceases as of the
     date of this Announcement), and that, for a period of 12 months, Steinhoff shall not, without
     Poundland’s prior written consent, approach any of Poundland’s employees, offices or
     customers or employ or otherwise engage certain of the Poundland employees.

     Co-operation Agreement

     Pursuant to a co-operation agreement dated 13 July 2016 (the “Co-operation Agreement”):
     (i) Poundland and SEAG have agreed to co-operate with each other and provide each other
     with all reasonable information, assistance and access in a timely manner in order to make
     any regulatory filings; (ii) SEAG has agreed to provide Poundland with certain information for
     the purposes of the Scheme Document and to otherwise assist with the preparation of the
     Scheme Document; (iii) SEAG has reserved its right, with the consent of the Panel, to
     implement the Offer by way of a takeover offer and agreed to certain provisions that would
     apply in the event of a switch to a takeover offer; and (iv) each of Poundland and SEAG has
     agreed to take any action necessary to implement certain proposals in relation to the
     Poundland Share Plans.

     SEAG has also undertaken in the Co-operation Agreement to vote in favour of the resolutions
     proposed at the General Meeting in respect of its entire beneficial holding of Poundland
     Shares. SEAG is not permitted to vote on the Scheme at the Court Meeting.

     The Co-operation Agreement will terminate: (i) if agreed in writing by SEAG and Poundland;
     (ii) upon written notice from SEAG to Poundland if the Poundland Directors withdraw,
     adversely modify or adversely qualify their unconditional and unanimous recommendation of
     the Offer; (iii) upon written notice from SEAG to Poundland if a competing transaction,
     completes, becomes effective or is declared unconditional in all respects; (iv) if the Scheme
     is withdrawn or lapses (other than pursuant to SEAG’s right to switch to a takeover offer or
     where such withdrawal or lapse is followed within ten Business Days by an announcement by
     SEAG or a person acting in concert with SEAG of a firm intention to make an offer on
     substantially the same or improved terms); or (v) upon written notice by either party, if the
     Offer has not become Effective by 30 November 2016.

14   Structure of the Offer
     It is intended that the Offer shall be effected by means of a Court-approved scheme of
     arrangement between Poundland and Poundland Shareholders under Part 26 of the
     Companies Act. SEAG reserves the right to elect to implement the Offer by way of a takeover
     offer (subject to Panel consent).

     The purpose of the Scheme is to provide for SEAG to become the holder of the entire issued
     and to be issued share capital of Poundland not already directly or indirectly owned by it.
     Under the Scheme, the Poundland Shares will be transferred to SEAG in consideration for
     which the Poundland Shareholders shall receive cash consideration on the basis set out in
     paragraph 2 of this Announcement.

     To become Effective, the Scheme must be approved by a majority in number of the Poundland
     Shareholders voting at the Court Meeting, either in person or by proxy, representing at least
     75 per cent. in value of the Poundland Shares voted (in both cases excluding SEAG who will
     not be permitted to vote at the Court Meeting). In addition, resolutions in relation to certain
     ancillary matters must be passed at the General Meeting, which requires the approval of
     holders of Poundland Shares representing at least 75 per cent. of votes cast at the General
     Meeting either in person or by proxy (including SEAG who will be permitted to vote at the
     General Meeting).

     SEAG is not permitted to vote on the Scheme at the Court Meeting but has undertaken in the
     Co-operation Agreement to vote in favour of the resolutions proposed at the General Meeting
     in respect of its entire beneficial holding of Poundland Shares.

     The Scheme is also subject to the Conditions and further terms set out in Appendix I to this
     Announcement and to be set out in the Scheme Document.

     Once the necessary approvals from holders of Poundland Shares have been obtained and
     the other Conditions have been satisfied or (where applicable) waived, the Scheme must be
     approved by the Court. The Scheme shall then become Effective upon delivery of the Court
     Order to the Registrar of Companies. Subject to satisfaction of the Conditions, the Scheme is
     expected to become Effective by mid-September 2016.
     Upon the Scheme becoming Effective, it shall be binding on all Poundland Shareholders,
     irrespective of whether or not they attended or voted at the Court Meeting or the General
     Meeting.

     Further details of the Scheme, including an indicative timetable for its implementation, shall
     be set out in the Scheme Document.

     It is expected that the Scheme Document and the Forms of Proxy accompanying the Scheme
     Document will be published as soon as practicable and, in any event, (save with the consent
     of the Panel) within 28 days of this Announcement. The Scheme Document and Forms of
     Proxy will be made available to all holders of Poundland Shares at no charge to them.

15   Conditions to the Offer
     The Offer shall be subject to the Conditions and further terms set out in Appendix I to this
     Announcement and to be set out in the Scheme Document.

     The Scheme will be subject to the following conditions:

         (i)      its approval by a majority in number of the Poundland Shareholders who are present
                  and vote, whether in person or by proxy, at the Court Meeting and who represent 75
                  per cent. in value of the Poundland Shares voted by those Poundland Shareholders;

         (ii)     the resolution(s) required to approve and implement the Scheme being duly passed
                  by holders of Poundland Shares representing 75 per cent. or more of votes cast at
                  the General Meeting; and

         (iii)    the approval of the Scheme by the Court (with or without modification but subject to
                  any modification being on terms acceptable to Poundland and SEAG) and the
                  delivery of a copy of the Court Order to the Registrar of Companies.

     The Offer shall lapse if:

     -           the Court Meeting and the General Meeting are not held by the 22 nd day after the
                 expected date of such meetings as set out in the Scheme Document (or such later
                 date as may be agreed between SEAG and Poundland); or

     -           the Scheme does not become Effective by 30 November 2016,

     provided, however, that the deadlines for the timing of the Court Meeting and the General
     Meeting and the deadline for the Scheme to become Effective may be extended by agreement
     between Poundland and SEAG (with the consent of the Panel and the Court, if required).

     The Offer is not conditional upon any antitrust approvals being obtained and will close shortly
     after receiving the requisite approvals at the Court Meeting and the General Meeting, and the
     Scheme being sanctioned by the Court.

16   De-listing and re-registration
     Prior to the Scheme becoming Effective, Poundland shall make an application, which shall be
     conditional on the Scheme becoming Effective, for the cancellation of the listing of Poundland
     Shares on the Official List and for the cancellation of trading of the Poundland Shares on the
     London Stock Exchange’s main market for listed securities in each case to take effect from or
     shortly after the Effective Date. The last day of dealings in Poundland Shares on the Main
     Market of the London Stock Exchange is expected to be the Business Day immediately prior
     to the Effective Date and no transfers shall be registered after 6.00p.m. on that date.
     On the Effective Date, share certificates in respect of Poundland Shares shall cease to be
     valid and entitlements to Poundland Shares held within the CREST system shall be cancelled.

     It is proposed, as part of the application to Court in connection with the Scheme, to seek an
     order of the Court pursuant to Section 651 of the Companies Act to re-register Poundland as
     a private limited company.

17   Dividend
     Holders of Poundland Shares whose names are on the register on 9 September 2016 shall
     be entitled to receive the Agreed Dividend without any reduction in the Offer Price payable
     under the terms of the Offer. The Agreed Dividend will be paid on 23 September 2016.

     If any dividend or other distribution is authorised, declared, made or paid in respect of
     Poundland Shares on or after the date of this Announcement and prior to closing of the Offer
     other than the Agreed Dividend, or in excess of the Agreed Dividend, the Offer Price shall be
     reduced by the amount of such dividend or other distribution or by the excess above the
     Agreed Dividend.

18   Disclosure of Interests in Poundland
     Save in respect of the irrevocable undertakings referred to in paragraph 6 above and as
     disclosed below, as at the close of business on 12 July 2016 (being the last practicable date
     prior to the date of this Announcement) neither Steinhoff, SEAG nor any of its directors, nor,
     so far as Steinhoff is aware, any person acting in concert (within the meaning of the Takeover
     Code) with it has (i) any interest in or right to subscribe for any relevant securities of
     Poundland, nor (ii) any short positions in respect of relevant Poundland Shares (whether
     conditional or absolute and whether in the money or otherwise), including any short position
     under a derivative, any agreement to sell or any delivery obligation or right to require another
     person to purchase or take delivery, nor (iii) borrowed or lent any relevant Poundland Shares
     (including, for these purposes, any financial collateral arrangements of the kind referred to in
     Note 4 on Rule 4.6 of the Takeover Code), save for any borrowed shares which had been
     either on-lent or sold:

                         Name                        Nature of Interest          Number of
                                                                              Poundland Shares
         Steinhoff Europe AG                          Securities owned            63,473,352
                                                      and/or controlled


     'Interests in securities' for these purposes arise, in summary, when a person has long
     economic exposure, whether absolute or conditional, to changes in the price of securities (and
     a person who only has a short position in securities is not treated as interested in those
     securities). In particular, a person will be treated as having an 'interest' by virtue of the
     ownership, voting rights or control of securities, or by virtue of any agreement to purchase,
     option in respect of, or derivative referenced to, securities.

19   General
     SEAG reserves the right to elect (subject to the consent of the Panel) to implement the
     acquisition of the Poundland Shares not already directly or indirectly owned by it by way of a
     takeover offer as an alternative to the Scheme. In such event, the acquisition shall be
     implemented on substantially the same terms as those which would apply to the Scheme
     (subject to appropriate amendments, including an acceptance condition set at 75 per cent. of
     the Poundland Shares or such lesser percentage, being more than 50 per cent., as SEAG
     may decide).

     The Offer shall be made subject to the Conditions and further terms set out in Appendix I to
     this Announcement and to be set out in the Scheme Document. The bases and sources of
     certain financial information contained in this Announcement are set out in Appendix II to this
     Announcement. A summary of the irrevocable undertakings given in relation to the Offer is
     contained in Appendix III to this Announcement. Certain terms used in this Announcement are
     defined in Appendix IV to this Announcement.

     Investec Bank plc, J.P. Morgan Cazenove and Rothschild have each given and not withdrawn
     their consent to the publication of this Announcement with the inclusion herein of the
     references to their names in the form and context in which they appear.

20   Documents available on website
     Copies of the following documents shall be made available on Steinhoff’s and Poundland’s
     websites at www.steinhoffinternational.com and www.poundlandcorporate.com respectively)
     until the end of the Offer:

     -      the irrevocable undertakings referred to in paragraph 6 above and summarised in
            Appendix III to this Announcement;

     -      documents relating to the financing of the Scheme referred to in paragraph 12 above;

     -      the written consents provided by each of Investec Bank plc, J.P. Morgan Cazenove
            and Rothschild;

     -      the Confidentiality Agreement referred to in paragraph 13 above; and

     -      the Co-operation Agreement referred to in paragraph 13 above.

     Further Information
     Linklaters LLP are providing legal advice to Steinhoff and SEAG. Freshfields Bruckhaus
     Deringer LLP are providing legal advice to Poundland.
Enquiries

  Steinhoff and SEAG                                          Tel: +27 (0)21 808 0711
  Mariza Nel, Director, Corporate Services (Investor
  Relations)
  Nick Agarwal (UK Press)                                     Tel: +44 (0)75 6810 1045
  Investec Bank plc (financial adviser to Steinhoff and       Tel: +44 (0)20 7597 4000
  SEAG)
  Andrew Pinder / David Anderson
  Sara Hale / Henry Reast (Corporate Broking)
  Poundland
  Darren Shapland, Chairman                                   Tel: +44 (0)12 1526 8688
  Philip Dorgan, Head of Investor Relations                   Tel: +44 (0)12 1568 7000
  J.P. Morgan Cazenove (joint financial adviser and           Tel: +44 (0) 20 7742 4000
  corporate broker to Poundland)
  Toby Radford / Caroline Thomlinson

  Mark Breuer / James Robinson
  Rothschild (joint financial adviser to Poundland)           Tel: +44 (0) 20 7280 5000

  Majid Ishaq
  John Byrne
  Shore Capital (corporate broker to Poundland)               Tel: +44 (0) 20 7408 4090

  Dru Danford
  Patrick Castle
  Citigate Dewe Rogerson (PR adviser to Poundland)
  Simon Rigby                                                 Tel: +44 (0) 20 7282 2847

  Kevin Smith                                                 Tel: +44 (0) 20 7282 1054

  Nick Hayns                                                  Tel: +44 (0) 20 7282 1032


Important Notices

Investec Bank plc is authorised by the Prudential Regulation Authority and regulated by the
Financial Conduct Authority and the Prudential Regulation Authority in the UK. Investec Bank
plc is acting exclusively as financial adviser to Steinhoff and SEAG and no one else in
connection with the Offer and shall not be responsible to anyone other than Steinhoff and
SEAG for providing the protections afforded to clients of Investec Bank plc nor for providing
advice in connection with the Offer or any matter referred to herein.

J.P. Morgan Limited, which conducts its UK investment banking business as J.P. Morgan
Cazenove ("J.P. Morgan Cazenove"), is authorised and regulated in the United Kingdom by
the Financial Conduct Authority. J.P. Morgan Cazenove is acting as financial adviser
exclusively for Poundland and no one else in connection with the matters set out in this
Announcement and will not regard any other person as its client in relation to the matters in
this Announcement and will not be responsible to anyone other than Poundland for providing
the protections afforded to clients of J.P. Morgan Cazenove, nor for providing advice in relation
to any matter referred to herein.

N. M. Rothschild & Sons Limited, which is authorised by the Prudential Regulation Authority
and regulated by the FCA and the Prudential Regulation Authority in the United Kingdom, is
acting exclusively for Poundland and no one else in connection with the Offer and will not be
responsible to anyone other than Poundland for providing the protections afforded to its clients
or for providing advice in relation to the Offer or any other matters referred to in this
Announcement.

Shore Capital Stockbrokers Limited (“Shore Capital”) which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority is acting as corporate broker to Poundland
and no one else in connection with the Offer and other matters described in this
Announcement and will not be responsible to anyone other than Poundland for providing the
protections afforded to clients of Shore Capital or for providing advice in relation to the Offer
and other matters described in this Announcement.

This Announcement is for information purposes only and does not constitute an offer to sell
or an invitation to purchase any securities or the solicitation of an offer to buy any securities,
pursuant to the Offer or otherwise. The Offer shall be made solely by means of the Scheme
Document or any document by which the Offer is made which shall contain the full terms and
Conditions of the Offer, including details of how to vote in respect of the acquisition.

This Announcement has been prepared for the purpose of complying with English law and
the Takeover Code and the information disclosed may not be the same as that which would
have been disclosed if this Announcement had been prepared in accordance with the laws of
jurisdictions outside the United Kingdom.

Poundland shall prepare the Scheme Document to be distributed to holders of Poundland
Shares. Poundland, SEAG and Steinhoff urge Poundland Shareholders to read the Scheme
Document when it becomes available because it shall contain important information relating
to the Offer.

Overseas Shareholders

The release, publication or distribution of this Announcement in certain jurisdictions may be
restricted by law. Persons who are not resident in the United Kingdom or who are subject to
other jurisdictions should inform themselves of, and observe, any applicable requirements.

The Offer relates to shares of a UK company and is proposed to be effected by means of a
scheme of arrangement under the laws of England and Wales. A transaction effected by
means of a scheme of arrangement is not subject to proxy solicitation or tender offer rules
under the US Securities Exchange Act of 1934 (the “US Exchange Act”). Accordingly, the
Scheme is subject to the disclosure requirements, rules and practices applicable in the United
Kingdom to schemes of arrangement, which differ from the requirements of US proxy
solicitation or tender offer rules. However, if SEAG were to elect to implement the Offer by
means of a takeover offer in the circumstances provided for in this Announcement, such
takeover offer shall be made in compliance with all applicable laws and regulations, including
Section 14(e) of the US Exchange Act and Regulation 14E thereunder. Such a takeover would
be made in the United States by SEAG and no one else. In addition to any such takeover
offer, SEAG, certain affiliated companies and the nominees or brokers (acting as agents) may
make certain purchases of, or arrangements to purchase, shares in Poundland outside such
takeover offer during the period in which such takeover offer would remain open for
acceptance. If such purchases or arrangements to purchase were to be made they would be
made outside the United States and would comply with applicable law, including the US
Exchange Act.

Unless otherwise determined by SEAG or required by the Takeover Code, and permitted by
applicable law and regulation, the Offer shall not be made available, directly or indirectly, in,
into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction
and no person may vote in favour of the offer by any such use, means, instrumentality or form
within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation
of the laws of that jurisdiction. Accordingly, copies of this Announcement and all documents
relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would
violate the laws in that jurisdiction, and persons receiving this Announcement and all
documents relating to the Offer (including custodians, nominees and trustees) must not mail
or otherwise distribute or send them in, into or from such jurisdictions where to do so would
violate the laws in that jurisdiction.

The availability of the Offer to Poundland Shareholders who are not resident in the United
Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident.
Persons who are not resident in the United Kingdom should inform themselves of, and
observe, any applicable requirements.

The Offer shall be subject to the applicable requirements of the Takeover Code, the Panel,
the London Stock Exchange, the Financial Conduct Authority and the UKLA.

This Announcement does not constitute a prospectus or prospectus equivalent document.

Forward looking statements

This Announcement contains statements about Steinhoff, SEAG and Poundland that are or
may be forward looking statements. All statements other than statements of historical facts
included in this Announcement may be forward looking statements. Without limitation, any
statements preceded or followed by or that include the words “targets”, “plans”, “believes”,
“expects”, “aims”, “intends”, “will”, “may”, “anticipates”, “estimates”, “projects” or words or
terms of similar substance or the negative thereof, are forward looking statements. Forward
looking statements include statements relating to the following: (i) future capital expenditures,
expenses, revenues, earnings, synergies, economic performance, indebtedness, financial
condition, dividend policy, losses and future prospects; (ii) business and management
strategies and the expansion and growth of Steinhoff’s or Poundland’s operations and
potential synergies resulting from the Offer; and (iii) the effects of government regulation on
Steinhoff’s or Poundland’s business.

Such forward looking statements involve risks and uncertainties that could significantly affect
expected results and are based on certain key assumptions. Many factors could cause actual
results to differ materially from those projected or implied in any forward looking statements.
Due to such uncertainties and risks, readers are cautioned not to place undue reliance on
such forward looking statements, which speak only as of the date hereof. Each of Steinhoff,
SEAG and Poundland disclaims any obligation to update any forward looking or other
statements contained herein, except as required by applicable law.
No profit forecasts or estimates
No statement in this Announcement is intended as a profit forecast or estimate for any period
and no statement in this Announcement should be interpreted to mean that earnings or
earnings per share for Steinhoff or Poundland, as appropriate, for the current or future
financial years would necessarily match or exceed the historical published earnings or
earnings per share for Steinhoff or Poundland, as appropriate.

Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per cent. or more
of any class of relevant securities of an offeree company or of any securities exchange offeror
(being any offeror other than an offeror in respect of which it has been announced that its offer
is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the
commencement of the Offer Period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening Position Disclosure must contain
details of the person’s interests and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An
Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no
later than 3.30 pm (London time) on the 10th Business Day following the commencement of
the Offer Period and, if appropriate, by no later than 3.30 pm (London time) on the 10th
Business Day following the announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of the offeree company or of
a securities exchange offeror prior to the deadline for making an Opening Position Disclosure
must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1 per
cent. or more of any class of relevant securities of the offeree company or of any securities
exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any securities exchange offeror. A Dealing Disclosure must
contain details of the dealing concerned and of the person’s interests and short positions in,
and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii)
any securities exchange offeror, save to the extent that these details have previously been
disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must
be made by no later than 3.30 pm (London time) on the Business Day following the date of
the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether
formal or informal, to acquire or control an interest in relevant securities of an offeree company
or a securities exchange offeror, they will be deemed to be a single person for the purpose of
Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror
and Dealing Disclosures must also be made by the offeree company, by any offeror and by
any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening
Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure
Table on the Panel’s website at http://www.thetakeoverpanel.org.uk, including details of the
number of relevant securities in issue, when the Offer Period commenced and when any
offeror was first identified. If you are in any doubt as to whether you are required to make an
Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel’s Market
Surveillance Unit on +44 (0)20 7638 0129.
Publication on Website and Availability of Hard Copies

A copy of this Announcement shall be made available subject to certain restrictions relating
to persons resident in Restricted Jurisdictions on Steinhoff’s and Poundland’s websites at
www.steinhoffinternational.com and http://www.poundlandcorporate.com respectively by no
later than 12 noon (London time) on 14 July 2016. For the avoidance of doubt, the content of
the websites referred to in this Announcement are not incorporated into and do not form part
of this Announcement.

You may request a hard copy of this Announcement by:

     -   for Steinhoff shareholders, contacting the Company Secretary at Steinhoff UK
         Holdings Limited, 5th Floor Festival House, Jessop Avenue, Cheltenham,
         Gloucestershire, GL50 3SH, United Kingdom. Telephone number: +44 (0) 1242
         586360; or

     -   for Poundland Shareholders, by writing to Poundland’s registrar at Computershare,
         The Pavilions, Bridgwater Road, Bristol BS13 8AE or by calling them on 0370 707
         1028 from within the UK or on +44 (0)370 707 1028 if calling from outside the UK.

You may also request that all future documents, announcements and information to be sent
to you in relation to the Offer should be in hard copy form.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments.
Accordingly, figures shown for the same category presented in different tables may vary
slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of
the figures that precede them.
                                      APPENDIX I
                      CONDITIONS AND FURTHER TERMS OF THE OFFER

Part A: Conditions of the Scheme
The Offer is conditional upon the Scheme becoming unconditional and Effective, subject to the
Takeover Code, by not later than 30 November 2016 or such later date (if any) as SEAG and
Poundland may agree and (if required) the Panel and the Court may allow.

1     The Scheme shall be subject to the following conditions:

      1.1
      (i)           its approval by a majority in number of the Poundland Shareholders who are present
                    and vote, whether in person or by proxy, at the Court Meeting and who represent 75
                    per cent. or more in value of the Poundland Shares voted by those Poundland
                    Shareholders; and

      (ii)          such Court Meeting being held on or before the 22nd day after the expected date of
                    the Court Meeting as set out in the Scheme Document (or such later date as may be
                    agreed by SEAG and Poundland and the Court may allow);

      1.2
      (iii)         the resolution(s) required to approve and implement the Scheme being duly passed
                    by holders of Poundland Shares representing 75 per cent. or more of votes cast at
                    the General Meeting; and

      (iv)          such General Meeting being held on or before the 22nd day after the expected date
                    of the General Meeting as set out in the Scheme Document (or such later date as may
                    be agreed by SEAG and Poundland and the Court may allow); and

      1.3           the sanction of the Scheme by the Court (with or without modification but subject to
                    any modification being on terms acceptable to Poundland and SEAG) and the delivery
                    of a copy of the Court Order to the Registrar of Companies.

2     In addition, subject as stated in Part B below and to the requirements of the Panel, the Offer
      shall be conditional upon the following Conditions and, accordingly, the Court Order shall not
      be delivered to the Registrar of Companies unless such Conditions (as amended if
      appropriate) have been satisfied or, where relevant, waived:

Certain matters arising as a result of any arrangement, agreement, etc.
    (a)       except as Disclosed, there being no provision of any arrangement, agreement, lease,
              licence, franchise, permit or other instrument to which any member of the Wider
              Poundland Group is a party or by or to which any such member or any of its assets is or
              may be bound, entitled or be subject or any event or circumstance which, as a
              consequence of the Offer or the acquisition or the proposed acquisition by any member
              of the Wider Steinhoff Group of any shares or other securities (or the equivalent) in
              Poundland or because of a change in the control or management of any member of the
              Wider Poundland Group or otherwise, could or might reasonably be expect to result in:

              (i)      any monies borrowed by, or any other indebtedness, actual or contingent, of, or
                       any grant available to, any member of the Wider Poundland Group being or
                       becoming repayable, or capable of being declared repayable, immediately or prior
                       to its or their stated maturity date or repayment date, or the ability of any such
                   member to borrow monies or incur any indebtedness being withdrawn or inhibited
                   or being capable of becoming or being withdrawn or inhibited;

          (ii)     the creation, save in the ordinary and usual course of business, or enforcement of
                   any mortgage, charge or other security interest over the whole or any part of the
                   business, property or assets of any member of the Wider Poundland Group or any
                   such mortgage, charge or other security interest (whenever created, arising or
                   having arisen) becoming enforceable;

          (iii)    any such arrangement, agreement, lease, licence, franchise, permit or other
                   instrument being terminated or the rights, liabilities, obligations or interests of any
                   member of the Wider Poundland Group being adversely modified or adversely
                   affected or any obligation or liability arising or any adverse action being taken or
                   arising thereunder;

          (iv)     any liability of any member of the Wider Poundland Group to make any severance,
                   termination, bonus or other payment to any of its directors, or other officers;

          (v)      the rights, liabilities, obligations, interests or business of any member of the Wider
                   Poundland Group or any member of the Wider Steinhoff Group under any such
                   arrangement, agreement, licence, permit, lease or instrument or the interests or
                   business of any member of the Wider Poundland Group or any member of the
                   Wider Steinhoff Group in or with any other person or body or firm or company (or
                   any arrangement or arrangement relating to any such interests or business) being
                   or becoming capable of being terminated, or adversely modified or affected or any
                   onerous obligation or liability arising or any adverse action being taken thereunder;

          (vi)     any member of the Wider Poundland Group ceasing to be able to carry on
                   business under any name under which it presently carries on business;

          (vii)    the value of, or the financial or trading position or prospects of, any member of the
                   Wider Poundland Group being prejudiced or adversely affected; or

          (viii)   the creation or acceleration of any liability (actual or contingent) by any member
                   of the Wider Poundland Group other than trade creditors or other liabilities incurred
                   in the ordinary course of business,

          and no event having occurred which, under any provision of any arrangement,
          agreement, licence, permit, franchise, lease or other instrument to which any member of
          the Wider Poundland Group is a party or by or to which any such member or any of its
          assets are bound, entitled or subject, would or might result in any of the events or
          circumstances as are referred to in Conditions (a)(i) to (viii);

Certain events occurring since 27 March 2016
    (b)   except as Disclosed, no member of the Wider Poundland Group having since 27 March
          2016:

          (i)      issued or agreed to issue or authorised or proposed or announced its intention to
                   authorise or propose the issue, of additional shares of any class, or securities or
                   securities convertible into, or exchangeable for, or rights, warrants or options to
                   subscribe for or acquire, any such shares, securities or convertible securities or
                   transferred or sold or agreed to transfer or sell or authorised or proposed the
                   transfer or sale of Poundland Shares out of treasury (except, where relevant, as
                   between Poundland and wholly owned subsidiaries of Poundland or between the
         wholly owned subsidiaries of Poundland and except for the issue or transfer out of
         treasury of Poundland Shares on the exercise of employee share options or
         vesting of employee share awards in the ordinary course under the Poundland
         Share Plans);

(ii)     except for the Agreed Dividend, recommended, declared, paid or made any bonus,
         dividend or other distribution (whether payable in cash or otherwise) other than
         dividends (or other distributions whether payable in cash or otherwise) lawfully
         paid or made by any wholly owned subsidiary of Poundland to Poundland or any
         of its wholly owned subsidiaries;

(iii)    other than pursuant to the Offer (and except for transactions between Poundland
         and its wholly owned subsidiaries or between the wholly owned subsidiaries of
         Poundland and transactions in the ordinary course of business), implemented,
         effected, authorised or proposed or announced its intention to implement, effect,
         authorise or propose any merger, demerger, reconstruction, amalgamation,
         scheme, commitment or acquisition or disposal of assets or shares or loan capital
         (or the equivalent thereof) in any undertaking or undertakings in any such case to
         an extent which is material in the context of the Wider Poundland Group taken as
         a whole;

(iv)     except for transactions between Poundland and its wholly owned subsidiaries or
         between the wholly owned subsidiaries of Poundland and transactions in the
         ordinary course of business, disposed of, or transferred, mortgaged or created any
         security interest over any material asset or any right, title or interest in any material
         asset or authorised, proposed or announced any intention to do so;

(v)      (except for transactions between Poundland and its wholly owned subsidiaries or
         between the wholly owned subsidiaries of Poundland) issued, authorised or
         proposed or announced an intention to authorise or propose, the issue of or made
         any change in or to the terms of any debentures or become subject to any
         contingent liability or incurred or increased any indebtedness which is material in
         the context of the Wider Poundland Group as a whole;

(vi)     except in the ordinary course of business, entered into or varied or authorised,
         proposed or announced its intention to enter into or vary any contract,
         arrangement, agreement, transaction or commitment (whether in respect of capital
         expenditure or otherwise), which is of a long term, unusual or onerous nature or
         magnitude or which is or which involves or is reasonably likely to involve an
         obligation of a nature or magnitude which is reasonably likely to be materially
         restrictive on the business of any member of the Wider Poundland Group which,
         taken together with any other such material transaction, arrangement, agreement,
         contract or commitment, is material in the context of the Wider Poundland Group
         as a whole;

(vii)    entered into or varied the terms of, or made any offer (which remains open for
         acceptance) to enter into or vary the terms of any contract, service agreement,
         commitment or arrangement with any director or senior executive of any member
         of the Wider Poundland Group;

(viii)   proposed, agreed to provide or modified the terms of any share option scheme,
         incentive scheme or other benefit relating to the employment or termination of
         employment of any employee of the Wider Poundland Group which are material
         in the context of the Wider Poundland Group taken as a whole;

(ix)     purchased, redeemed or repaid or announced any proposal to purchase, redeem
         or repay any of its own shares or other securities or reduced or, except in respect
         of the matters mentioned in sub-paragraph (i) above, made any other change to
         any part of its share capital;

(x)      except in the ordinary course of business, waived, compromised or settled any
         claim which is material in the context of the Wider Poundland Group as a whole;

(xi)     terminated or varied the terms of any agreement or arrangement between any
         member of the Wider Poundland Group and any other person in a manner which
         would or might reasonably be expected to have a material adverse effect on the
         financial position of the Wider Poundland Group taken as a whole;

(xii)    (except as disclosed on publicly available registers) made any alteration to its
         memorandum or articles of association or other incorporation documents;

(xiii)   except in relation to changes made or agreed as a result of, or arising from,
         changes to legislation, made or agreed or consented to any change to:

              (a)     the terms of the trust deeds and rules constituting the pension
                      scheme(s) established by any member of the Wider Poundland
                      Group for its directors, employees or their dependants;

              (b)     the contributions payable to any such scheme(s) or to the benefits
                      which accrue, or to the pensions which are payable, thereunder;

              (c)     the basis on which qualification for, or accrual or entitlement to, such
                      benefits or pensions are calculated or determined; or

              (d)     the basis upon which the liabilities (including pensions) of such
                      pension schemes are funded, valued, made, agreed or consented to,

              to an extent which is in any such case material in the context of the Wider
              Poundland Group;

(xiv) been unable, or admitted in writing that it is unable, to pay its debts or commenced
      negotiations with one or more of its creditors with a view to rescheduling or
      restructuring any of its indebtedness, or having stopped or suspended (or
      threatened to stop or suspend) payment of its debts generally or ceased or
      threatened to cease carrying on all or a substantial part of its business;

(xv)     (other than in respect of a member of the Wider Poundland Group which is
         dormant and was solvent at the relevant time) taken or proposed any steps,
         corporate action or had any legal proceedings instituted or threatened against it in
         relation to the suspension of payments, a moratorium of any indebtedness, its
         winding-up (voluntary or otherwise), dissolution, reorganisation or for the
         appointment of a receiver, administrator, manager, administrative receiver, trustee
         or similar officer of all or any material part of its assets or revenues or any
         analogous or equivalent steps or proceedings in any jurisdiction or appointed any
         analogous person in any jurisdiction or had any such person appointed;
          (xvi) (except for transactions between Poundland and its wholly owned subsidiaries or
                between the wholly owned subsidiaries), made, authorised, proposed or
                announced an intention to propose any change in its loan capital;

          (xvii) entered into, implemented or authorised the entry into, any joint venture, asset or
                 profit sharing arrangement, partnership or merger of business or corporate
                 entities; or

          (xviii) entered into any agreement, arrangement, commitment or contract or passed any
                  resolution or made any offer (which remains open for acceptance) with respect to
                  or announced an intention to, or to propose to, effect any of the transactions,
                  matters or events referred to in this Condition (b);

No adverse change, litigation, regulatory enquiry or similar
    (c)   except as Disclosed, since 27 March 2016 there having been:

          (i)     no adverse change and no circumstance having arisen which would or might be
                  expected to result in any adverse change in, the business, assets, financial or
                  trading position or profits or prospects or operational performance of any member
                  of the Wider Poundland Group which is material in the context of the Wider
                  Poundland Group;

          (ii)    no litigation, arbitration proceedings, prosecution or other legal proceedings
                  having been threatened, announced or instituted by or against or remaining
                  outstanding against or in respect of, any member of the Wider Poundland Group
                  or to which any member of the Wider Poundland Group is or may become a party
                  (whether as claimant, defendant or otherwise) having been threatened,
                  announced, instituted or remaining outstanding by, against or in respect of, any
                  member of the Wider Poundland Group, in each case which might reasonably be
                  expected to have a material adverse effect on the Wider Poundland Group taken
                  as a whole;

          (iii)   no enquiry, review or investigation by, or complaint or reference to, any Third Party
                  against or in respect of any member of the Wider Poundland Group having been
                  threatened, announced or instituted or remaining outstanding by, against or in
                  respect of any member of the Wider Poundland Group, in each case which might
                  reasonably be expected to have a material adverse effect on the Wider Poundland
                  Group taken as a whole;

          (iv)    no contingent or other liability having arisen or become apparent to SEAG or
                  increased other than in the ordinary course of business which is reasonably likely
                  to affect adversely the business, assets, financial or trading position or profits or
                  prospects of any member of the Wider Poundland Group to an extent which is
                  material in the context of the Wider Poundland Group taken as a whole; and

          (v)     no steps having been taken and no omissions having been made which are likely
                  to result in the withdrawal, cancellation, termination or modification of any licence
                  held by any member of the Wider Poundland Group which is necessary for the
                  proper carrying on of its business and the withdrawal, cancellation, termination or
                  modification of which might reasonably be expected to have a material adverse
                  effect on the Wider Poundland Group taken as a whole;
No discovery of certain matters regarding information, liabilities and environmental
issues
    (d)   except as Disclosed, SEAG not having discovered:

          (i)     that any financial, business or other information concerning the Wider Poundland
                  Group publicly announced prior to the date of this Announcement or disclosed at
                  any time to any member of the Wider Steinhoff Group by or on behalf of any
                  member of the Wider Poundland Group prior to the date of this Announcement is
                  misleading, contains a material misrepresentation of any fact, or omits to state a
                  fact necessary to make that information not misleading, in any such case to a
                  material extent;

          (ii)    that any member of the Wider Poundland Group or any partnership, company or
                  other entity in which any member of the Wider Poundland Group has a significant
                  economic interest and which is not a subsidiary undertaking of Poundland is
                  subject to any liability, contingent or otherwise and which is material in the context
                  of the Wider Poundland Group taken as a whole;

          (iii)   that any past or present member of the Wider Poundland Group has not complied
                  with all applicable legislation, regulations or other requirements of any jurisdiction
                  or any Authorisations relating to the use, treatment, storage, carriage, disposal,
                  discharge, spillage, release, leak or emission of any waste or hazardous
                  substance or any substance likely to impair the environment (including property)
                  or harm human or animal health or otherwise relating to environmental matters or
                  the health and safety of humans, which non-compliance would be likely to give
                  rise to any liability including any penalty for non-compliance (whether actual or
                  contingent) on the part of any member of the Wider Poundland Group;

          (iv)    that there has been a disposal, discharge, spillage, accumulation, release, leak,
                  emission or the migration, production, supply, treatment, storage, transport or use
                  of any waste or hazardous substance or any substance likely to impair the
                  environment (including any property) or harm human or animal health which
                  (whether or not giving rise to non-compliance with any law or regulation), would
                  be likely to give rise to any liability (whether actual or contingent) on the part of
                  any member of the Wider Poundland Group;

          (v)     that there is or is likely to be any obligation or liability (whether actual or contingent)
                  or requirement to make good, remediate, repair, reinstate or clean up any property,
                  asset or any controlled waters currently or previously owned, occupied, operated
                  or made use of or controlled by any past or present member of the Wider
                  Poundland Group (or on its behalf), or in which any such member may have or
                  previously have had or be deemed to have had an interest, under any
                  environmental legislation, common law, regulation, notice, circular, Authorisation
                  or order of any Third Party in any jurisdiction or to contribute to the cost thereof or
                  associated therewith or indemnify any person in relation thereto;

          (vi)    that circumstances exist (whether as a result of making the Offer or otherwise)
                  which would be reasonably likely to lead to any Third Party instituting (or whereby
                  any member of the Wider Poundland Group would be likely to be required to
                  institute), an environment audit or take any steps which would in any such case
                  be reasonably likely to result in any actual or contingent liability to improve or install
                  new plant or equipment or to make good, repair, reinstate or clean up any property
                     of any description or any asset now or previously owned, occupied or made use
                     of by any past or present member of the Wider Poundland Group (or on its behalf)
                     or by any person for which a member of the Wider Poundland Group is or has
                     been responsible, or in which any such member may have or previously have had
                     or be deemed to have had an interest, which is material in the context of the Wider
                     Poundland Group taken as a whole;

     Anti-corruption

            (vii)    any member of the Wider Poundland Group or any person that performs or has
                     performed services for or on behalf of any such company is or has engaged in any
                     activity, practice or conduct which would constitute an offence under the Bribery
                     Act 2010 or any other applicable anti-corruption legislation;

            (viii)   any member of the Wider Poundland Group is ineligible to be awarded any
                     contract or business under section 23 of the Public Contracts Regulations 2006 or
                     section 26 of the Utilities Contracts Regulations (2006) (each as amended);

            (ix)     any past or present member of the Wider Poundland Group has engaged in any
                     activity or business with, or made any investments in, or made any payments to
                     any government, entity or individual covered by any of the economic sanctions
                     administered by the United Nations or the European Union (or any of their
                     respective member states) or the United States Office of Foreign Assets Control
                     or any other governments or supranational body or authority in any jurisdiction; or

     No criminal property

            (x)      any asset of any member of the Wider Poundland Group constitutes criminal
                     property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but
                     disregarding paragraph (b) of that definition).

Part B: Certain further terms of the Offer

1    Subject to the requirements of the Panel, SEAG reserves the right to waive:

     (i)          any of the Conditions set out in the above Condition 1 for the timing of the Court
                  Meeting and General Meeting. If any such deadline is not met, SEAG shall make an
                  announcement by 8.00 a.m. on the Business Day following such deadline confirming
                  whether it has invoked or waived the relevant Condition or agreed with Poundland to
                  extend the deadline in relation to the relevant Condition; and

     (ii)         in whole or in part, all or any of the above Conditions 2(a) to (d) (inclusive).

2    If SEAG is required by the Panel to make an offer for Poundland Shares under the provisions
     of Rule 9 of the Takeover Code, SEAG may make such alterations to any of the above
     Conditions and terms of the Offer as are necessary to comply with the provisions of that Rule.

3    The Offer shall lapse if:

     (a)          in so far as the Offer or any matter arising from or relating to the Scheme or Offer
                  constitutes a concentration with a Community dimension within the scope of the
                  Regulation, the European Commission either initiates proceedings under Article
                  6(1)(c) of the Regulation or makes a referral to a competent authority in the United
            Kingdom under Article 9(1) of the Regulation and there is then a CMA Phase 2
            Reference; or

    (b)     in so far as the Offer or any matter arising from the Scheme or Offer does not
            constitute a concentration with a Community dimension within the scope of the
            Regulation, the Scheme or Offer or any matter arising from or relating to the Offer
            becomes subject to a CMA Phase 2 Reference,

    in each case, before the date of the Court Meeting.

4   Conditions 2(a) to (d) must be fulfilled or waived (if capable of waiver) by SEAG by no later
    than 11.59 p.m. on the Business Day immediately preceding the date of the Court hearing to
    sanction the Scheme. Subject to this obligation upon SEAG, SEAG shall be under no
    obligation to waive (if capable of waiver), to determine to be or remain satisfied or to treat as
    fulfilled any of Conditions 2(a) to (d) (inclusive) by a date earlier than the latest date for the
    fulfilment or waiver of that Condition notwithstanding that the other Conditions of the Offer
    may at such earlier date have been waived or fulfilled and that there are at such earlier date
    no circumstances indicating that any of such Conditions may not be capable of fulfilment.

5   The Poundland Shares acquired under the Offer shall be acquired fully paid and free from all
    liens, equities, charges, encumbrances, options, rights of pre-emption and any other third
    party rights and interests of any nature and together with all rights now or hereafter attaching
    or accruing to them, including, without limitation, voting rights and the right to receive and
    retain in full all dividends and other distributions (if any) declared, made or paid, or any other
    return of capital (whether by reduction of share capital or share premium account or
    otherwise) made, on or after the date of this Announcement, save for the Agreed Dividend.

6   If, after the date of this Announcement but prior to the Effective Date, save for the Agreed
    Dividend, any dividend or other distribution is declared, paid or made or becomes payable by
    Poundland, SEAG reserves the right (without prejudice to any right of SEAG, with the consent
    of the Panel, to invoke Condition 2(b)(ii) above) to reduce the consideration payable under
    the Offer by the aggregate amount of such dividend or distribution, and accordingly reduce
    the Offer Price.

    If any such dividend or distribution occurs (other than the Agreed Dividend), any reference in
    this Announcement to the consideration payable or the Offer Price shall be deemed to be a
    reference to the consideration or Offer Price as so reduced. If such reduction occurs,
    notwithstanding the terms on which the Poundland Shares are expressed to be acquired by
    SEAG pursuant to the Offer in Appendix I, the Poundland Shares shall be acquired by or on
    behalf of SEAG pursuant to the Offer together with all rights now and hereafter attaching to
    such shares including, without limitation, voting rights and the right to receive and retain in full
    all dividends and other distributions (if any) declared, made or paid, or any other return of
    capital (whether by reduction of share capital or share premium account or otherwise) made,
    on or after the date of this Announcement, save for the Agreed Dividend and such dividend
    or distribution in respect of which such reduction has been made, if applicable.

    To the extent that such a dividend or distribution has been declared, paid, made or is payable,
    it shall be (i) transferred pursuant to the Offer on a basis which entitles SEAG to receive the
    dividend or distribution and to retain it; or (ii) cancelled, and the consideration payable and
    the Offer Price shall not be subject to change in accordance with this paragraph.
     Any exercise by SEAG of its rights referred to in this paragraph shall be the subject of an
     announcement and, for the avoidance of doubt, shall not be regarded as constituting any
     revision or variation of the Offer.

7    SEAG reserves the right to elect (with the consent of the Panel) to implement the Offer by
     way of a takeover offer as it may determine in its absolute discretion. In such event, the
     acquisition shall be implemented on substantially the same terms, so far as applicable, as
     those which would apply to the Scheme, subject to appropriate amendments, including
     (without limitation) an acceptance condition set at 75 per cent. (or such lesser percentage,
     being more than 50 per cent., as SEAG may decide) of the Poundland Shares.

8    The availability of the Offer to persons not resident in the United Kingdom may be affected by
     the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom
     should inform themselves about and observe any applicable requirements.

9    The Offer is not being made, directly or indirectly, in, into or from, or by use of the mails of, or
     by any means of instrumentality (including, but not limited to, facsimile, e-mail or other
     electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any
     facility of a national, state or other securities exchange of, any jurisdiction where to do so
     would violate the laws of that jurisdiction.

10   The Offer is governed by the law of England and Wales and is subject to the jurisdiction of
     the English courts and to the Conditions and further terms set out in this Appendix I and to be
     set out in the Scheme Document. The Offer shall be subject to the applicable requirements
     of the Takeover Code, the Panel, the London Stock Exchange, the Financial Conduct
     Authority and the UKLA.

11   Each of the Conditions shall be regarded as a separate Condition and shall not be limited by
     reference to any other Condition.
                                APPENDIX II
              SOURCES OF INFORMATION AND BASES OF CALCULATION

(i)     The Cash Value of the Offer of approximately £597 million is based on 268,911,781 fully
        diluted Poundland Shares consisting of:

        (a)   268,701,797 Poundland Shares in issue on 12 July 2016, being the last dealing day
              prior to the date of this Announcement; and

        (b)   209,984 Poundland Shares in respect of awards which may vest as a result of the Offer.

(ii)    The Closing Prices on 13 June 2016 and 12 July 2016 are taken from the Daily Official List.

(iii)   Unless otherwise stated, the financial information relating to Poundland is extracted from the
        audited consolidated financial statements of Poundland for the financial year to 27 March
        2016, prepared in accordance with IFRS.

(iv)    Unless otherwise stated, the financial information relating to Steinhoff is extracted from the
        Quarterly Statement of Steinhoff for the nine months ended 31 March 2016.
                                     APPENDIX III
                              IRREVOCABLE UNDERTAKINGS

                          Poundland Directors’ Irrevocable Undertakings

Steinhoff has received irrevocable undertakings from each of the Poundland Directors to vote in
favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General
Meeting, in respect of a total of 14,719,261 Poundland Shares, representing approximately 5.5 per
cent. of the share capital of Poundland in issue on 12 July 2016 (being the latest practicable date
prior to publication of this Announcement), comprised as follows:

                                   Number of Poundland
                                   Shares in respect of which       Percentage of Poundland
 Name of Poundland Director        undertaking is given             issued share capital
        Darren Shapland                          65,000                           0.024%

          Jim McCarthy                      10,000,000                            3.722%

         Kevin O’Byrne                         340,000                            0.127%

          Nick Hateley                       4,254,198                            1.583%

        Teresa Colaianni                         33,823                           0.013%

          Grant Hearn                            10,000                           0.004%

           Tim Jones                              3,500                           0.001%

          Miles Roberts                          10,918                           0.004%

          Mary Barnard                            1,822                           0.001%


These irrevocable undertakings shall cease to be binding if (i) Steinhoff announces before
publication of the Scheme Document that it does not intend to proceed with the Offer and no new,
revised or replacement Scheme is announced by Steinhoff in accordance with Rule 2.7 of the
Takeover Code, or (ii) the Scheme (or takeover offer, as applicable) does not become Effective or
lapses in accordance with its terms, or is withdrawn. These irrevocable undertakings remain binding
in the event of a competing offer.

                                 Other Poundland Shareholders

Irrevocable Undertakings

 Name of Poundland                 Number of Poundland
 Shareholder giving                Shares in respect of which       Percentage of Poundland
 undertaking                       undertaking is given             issued share capital
    Canada Life Investments                  4,075,404                           1.520


In terms of the irrevocable undertaking given by Canada Life Investments, it agrees not to dispose
of, charge, pledge or otherwise encumber or grant any option or other right over or otherwise deal
in any of the Poundland Shares beneficially owned by it, except pursuant to the Offer.

In the event that a third party announces a proposal pursuant to Rule 2.7 of the Takeover Code to
acquire the entire issued and to be issued share capital of Poundland, and such proposal provides
for consideration of no less than 120 per cent. of the value of the Offer Price, and Steinhoff have not
announced a higher offer on or before seven days after the date of announcement of the higher
competing offer, then all of the obligations of Canada Life Investments under its irrevocable
undertaking shall immediately lapse.

In addition, SEAG has undertaken in the Co-operation Agreement to vote in favour of the resolutions
proposed at the General Meeting in respect of its entire beneficial holding of Poundland Shares.
SEAG is not permitted to vote on the Scheme at the Court Meeting.
                                         APPENDIX IV
                                         DEFINITIONS

The following definitions apply throughout this Announcement unless the context requires otherwise:

 “Agreed Dividend”                       the final dividend of two pence per Poundland Share
                                         announced in the announcement of the Poundland full year
                                         results for the year ended 27 March 2016, dated 16 June
                                         2016;
 “Authorisations”                        regulatory authorisations, orders, recognitions, grants,
                                         consents, clearances, confirmations, certificates, licences,
                                         permissions or approvals;
 “Announcement”                          this announcement made pursuant to Rule 2.7 of the
                                         Takeover Code;
 “Business Day”                          a day (other than Saturdays, Sundays and public holidays
                                         in the UK) on which banks are open for business in the City
                                         of London;
 “Cash Value”                            the total cash value of 222 pence per Poundland Share,
                                         being the aggregate of the Offer Price and the Agreed
                                         Dividend;
 “Closing Price”                         the closing middle market price of a Poundland Share on a
                                         particular trading day as derived from the Daily Official List;
 “CMA Phase 2 Reference”                 a reference of the Offer to the chair of the Competition and
                                         Markets Authority for the constitution of a group under
                                         Schedule 4 to the Enterprise and Regulatory Reform Act
                                         2013;
 “Companies Act”                         the Companies Act 2006, as amended;
 “Competition and Markets                a UK statutory body established under the Enterprise and
 Authority”                              Regulatory Reform Act 2013;
 “Conditions”                            the conditions to the implementation of the Offer, as set out
                                         in Appendix I to this Announcement and to be set out in the
                                         Scheme Document;
 “Court”                                 the High Court of Justice in England and Wales;
 “Court Meeting”                         the meeting of Poundland Shareholders to be convened
                                         pursuant to an order of the Court under the Companies Act
                                         for the purpose of considering and, if thought fit, approving
                                         the Scheme, including any adjournment, postponement or
                                         reconvention thereof;
 “Court Order”                           the order of the Court sanctioning the Scheme;
 “CREST”                                 the system for the paperless settlement of trades in
                                         securities and the holding of uncertificated securities
                                         operated by Euroclear UK and Ireland Limited;
“Daily Official List”         the Daily Official List published by the London Stock
                              Exchange;
“Dealing Disclosure”          has the same meaning as in Rule 8 of the Takeover Code;
“Disclosed”                   the information disclosed by, or on behalf of Poundland, (i)
                              in Poundland’s results announcement for the financial year
                              ended 27 March 2016, dated 16 June 2016; (ii) in this
                              Announcement; (iii) in any other announcement to a
                              Regulatory Information Service by, or on behalf of
                              Poundland prior to the publication of this announcement; or
                              (iv) as otherwise fairly disclosed to Steinhoff (or its
                              respective officers, employees, agents or advisers) prior to
                              the date of this announcement;
“Effective”                   in the context of the Offer: (i) if the Offer is implemented by
                              way of a Scheme, the Scheme having become effective in
                              accordance with its terms, upon the delivery of the Court
                              Order to the Registrar of Companies; or (ii) if the Offer is
                              implemented by way of a takeover offer pursuant to the
                              terms of the Co-operation Agreement, the takeover offer
                              having been declared or become unconditional in all
                              respects in accordance with the requirements of the Code;
“Effective Date”              the date on which (i) the Scheme becomes effective; or (ii)
                              if SEAG elects and the Panel consents to implement the
                              Offer by way of a takeover offer, the takeover offer
                              becomes Effective;
“FCA” or “Financial Conduct   the Financial Conduct Authority acting in its capacity as the
Authority”                    competent authority for the purposes of Part VI of the UK
                              Financial Services and Markets Act 2000;
“General Meeting”             the general meeting of holders of Poundland Shares
                              (including any adjournment, postponement or reconvention
                              thereof) to be convened in connection with the Scheme;
“IFRS”                        International Financial Reporting Standards;
“J.P. Morgan Cazenove”        J.P. Morgan Limited which conducts its UK investment
                              banking business as J.P. Morgan Cazenove;
“Listing Rules”               the rules and regulations made by the Financial Conduct
                              Authority in its capacity as the UKLA under the Financial
                              Services and Markets Act 2000, and contained in the
                              UKLA’s publication of the same name;
“London Stock Exchange”       London Stock Exchange plc;
“Offer”                       the recommended cash offer being made by SEAG to
                              acquire the entire issued and to be issued share capital of
                              Poundland not already directly or indirectly owned by
                              Steinhoff to be effected by means of the Scheme and,
                              where the context admits, any subsequent revision,
                              variation, extension or renewal thereof;
“Offer Period”                     the offer period (as defined by the Takeover Code) relating
                                   to Poundland, which commenced on 15 June 2016;
“Offer Price”                      220 pence per Poundland Share;
“Official List”                    the Official List maintained by the UKLA;
“Opening Position Disclosure”      has the same meaning as in Rule 8 of the Takeover Code;
“Overseas Shareholders”            Poundland Shareholders (or nominees of, or custodians or
                                   trustees for Poundland Shareholders) not resident in, or
                                   nationals or citizens of the United Kingdom;
“Panel”                            the Panel on Takeovers and Mergers;
“Poundland”                        Poundland Group plc;
“Poundland Directors”              the directors of Poundland;
“Poundland Group”                  Poundland and its subsidiary undertakings and, where the
                                   context permits, each of them;
“Poundland Shareholders” or        the holders of Poundland Shares (excluding SEAG);
“Shareholders”

“Poundland Shares”                 the shares of 1 pence each in the capital of Poundland;
“Poundland Share Plans”            the Poundland Restricted Share Plan, the Poundland
                                   Performance Share Plan, the Poundland Company Share
                                   Option Scheme and the Poundland Sharesave Scheme;
“Registrar of Companies”           the Registrar of Companies in England and Wales;
“Regulation”                       Council Regulation (EC) 139/2004;
“Regulatory Information Service”   any of the services set out in Appendix I to the Listing
                                   Rules;
"Restricted Jurisdiction"          any such jurisdiction where local laws or regulations may
                                   result in significant risk of civil, regulatory or criminal
                                   exposure if information concerning the Offer is sent or
                                   made available to Poundland Shareholders in that
                                   jurisdiction (in accordance with Rule 23.2 of the Takeover
                                   Code;
“Rothschild”                       N. M. Rothschild & Sons Limited;
“Scheme”                           the proposed scheme of arrangement under Part 26 of the
                                   Companies Act between Poundland and the Poundland
                                   Shareholders in connection with the Offer, with or subject to
                                   any modification, addition or condition approved or imposed
                                   by the Court and agreed by Poundland and SEAG;
“Scheme Document”                  the document to be sent to holders of Poundland Shares
                                   containing, amongst other things, the Scheme and the
                                   notices convening the Court Meeting and the General
                                   Meeting;
“Shore Capital”                    Shore Capital Stockbrokers Limited;
 “Significant Interest”                  in relation to an undertaking, a direct or indirect interest of
                                         20 per cent. or more of the total voting rights conferred by
                                         the equity share capital of such undertaking;
 “Steinhoff”                             Steinhoff International Holdings N.V.
 “Takeover Code”                         the City Code on Takeovers and Mergers;
 “Third Party”                           each of a central bank, government or governmental, quasi-
                                         governmental,      supranational,   statutory,    regulatory,
                                         environmental, administrative, fiscal or investigative body,
                                         court, trade agency, association, institution, environmental
                                         body, employee representative body or any other body or
                                         person whatsoever in any jurisdiction;
 “UKLA”                                  the UK Listing Authority, being the Financial Conduct
                                         Authority acting in its capacity as the competent authority
                                         for the purposes of Part VI of the Financial Services and
                                         Markets Act 2000;
 “United Kingdom” or “UK”                the United Kingdom of Great Britain and Northern Ireland;
 “United States” or “US”                 the United States of America, its territories and
                                         possessions, any state of the United States of America, the
                                         District of Columbia and all other areas subject to its
                                         jurisdiction and any political sub-division thereof;
 “Wider Poundland Group”                 Poundland and associated undertakings and any other
                                         body corporate, partnership, joint venture or person in which
                                         Poundland and such undertakings (aggregating their
                                         interests) have a Significant Interest; and
 “Wider Steinhoff Group”                 Steinhoff and associated undertakings and any other body
                                         corporate, partnership, joint venture or person in which
                                         Steinhoff and all such undertakings (aggregating their
                                         interests) have a Significant Interest.


For the purposes of this Announcement, “subsidiary”, “subsidiary undertaking”, “undertaking”
and “associated undertaking” have the respective meanings given thereto by the Companies Act.

All references to “pounds”, “pounds Sterling”, “Sterling”, “£”, “pence”, “penny” and “p” are to the
lawful currency of the United Kingdom.

All references to “Euros”, “EUR” and “€” are to the lawful currency of the member states of the
European Union that adopt a single currency in accordance with the Treaty establishing the
European Community as amended by the Treaty on the European Union.

All the times referred to in this Announcement are London times unless otherwise stated.

References to the singular include the plural and vice versa.

Date: 13/07/2016 08:32:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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