LIBERTY HOLDINGS LIMITED - Liberty Holdings sells its short-term insurance technology platform to Standard Bank

Liberty Holdings sells its short-term insurance technology platform to Standard Bank

LIBERTY HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1968/002095/06)
ISIN code: ZAE000127148
Alpha Code LBH
("Liberty Holdings")

Liberty Holdings sells its short-term insurance technology platform to
Standard Bank

1. Introduction

The board of directors (the “Board”) of Liberty Holdings Limited (“Liberty
Holdings”) wishes to advise shareholders (“Shareholders”) that the Company
has entered into a Sale and Purchase Agreement (“Agreement”) with The
Standard Bank of South Africa Limited (“SBSA” or the “Purchaser") to
dispose of 100% of the technology platform, operated as a division which
supports Liberty Holdings’ short-term insurance business, including all
moveable assets and intellectual property (the “Business”) (the
“Transaction”).

2. Nature of the short-term insurance business

Liberty Holdings developed a short-term insurance technology solution which
enables its financial advisers to offer a more comprehensive product
offering that supports clients on their life journey. These short-term
products are underwritten by Standard Insurance Limited ("SIL"), a wholly
owned subsidiary of Standard Bank Group Limited (“SBG”). The solution
leverages Liberty Holdings' extensive distribution network and allows
customers to pro-actively manage their short-term risk through the use of
an enhanced digital capability.

3. The Transaction

3.1 Rationale for the Transaction
Following Liberty Holdings' recent strategy refresh which refocused the
group on its South African ("SA") retail long-term insurance and asset
management operations, the Transaction provides Liberty Holdings with the
opportunity to reduce future capital requirements and de-risk its business.
Notwithstanding the sale of the technology platform to SBSA, the
Transaction ensures Liberty Holdings' short-term insurance offering will
still be available to its financial advisers and network in the SA market
to enhance the comprehensive product offering available to customers.

3.2   Purchase consideration for the Transaction
The purchase consideration of R145 million (one hundred and forty five
million rand), will be payable in cash by the Purchaser to the Company on
the closing date, namely the last business date of the month in which the
last of the conditions precedent are met or waived.

The proceeds from the disposal will be used to support Liberty Holdings'
existing business and the delivery of various initiatives relating to its
refreshed strategy.

3.3   Financial information pertaining to the transaction
For the financial period ended 31 December 2018, the recorded loss
attributable to the Business from costs incurred in establishing the
technology platform was R51 million and the capitalised expenditure
incurred up to 31 December 2018 was R94 million.

The Board's Significant Transaction Committee has considered the impact of
the Transaction and confirms that, although the implementation thereof will
have an insignificant impact on the financial results of Liberty Holdings
for the period, it will reduce future capital requirements and de-risk the
business. In addition, the Board's Related Party Committee, an independent
committee which considers transactions between Liberty Holdings and related
parties, has confirmed that, subject to the finalisation of the independent
advice as noted in paragraph 5 below, the transaction is fair to Liberty
Holdings' minority shareholders.

4. Conditions precedent and legal effective date

The Transaction is subject to conditions precedent that are typical of a
transaction of this nature.

Subject to these conditions being fulfilled, the effective date of the
Transaction is 2 January 2019.

5. Small Related Party Transaction

SBSA is a wholly owned subsidiary of SBG, which currently holds
approximately 56% of the issued share capital of Liberty Holdings.
Accordingly, in terms of the JSE Limited’s (“JSE”) Listings Requirements
(“Listings Requirements”), SBSA is a related party to Liberty Holdings.

The Transaction constitutes a small related party transaction in terms of
paragraph 10.7 of the Listings Requirements and consequently requires a
fairness opinion (“Opinion”) from an independent professional expert
(“Independent Expert”) acceptable to the JSE, advising that the terms of
the Transaction are fair as far as Liberty Holdings’ Shareholders, other
than SBG, are concerned.

In compliance with paragraph 10.7(b) of the Listings Requirements, Liberty
Holdings has appointed Ernst & Young Advisory Services (Pty) Limited, as
the Independent Expert, to provide the Opinion in this regard. A further
announcement will be published upon finalisation of the Opinion in respect
of the Transaction, advising Shareholders of its availability.

Braamfontein
27 February 2019

Sponsor:
Merrill Lynch South Africa (Pty) Limited

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