RAND MERCHANT INVESTMENT HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration number: 2010/005770/06) ISIN: ZAE000210688 JSE ordinary share code: RMI ("RMI") ACQUISITION OF UP TO 29.9% IN UK-BASED AND LISTED SHORT-TERM INSURER 1. Introduction Shareholders of RMI (“RMI Shareholders”) are advised that RMI has entered into definitive agreements to acquire up to 29.9% of the issued share capital of Hastings Group Holdings plc (“Hastings” or the “Group”) (“Acquisition”) at a price per share (depending on the closing dates) between 248 pence and 255 pence, for an aggregate cash consideration (depending on the closing dates) of between approximately GBP487.3 million and GBP499.5 million (“Acquisition Consideration”). RMI will become the single largest shareholder of Hastings post implementation of the Acquisition. This Acquisition is consistent with RMI’s previously articulated strategy that, in addition to its role as an active and value-adding shareholder in its existing portfolio companies, RMI intends to optimise, diversify and modernise its investment portfolio through investments across a broad spectrum of scale and lifecycles of financial services businesses. The Acquisition meets RMI’s objectives of diversifying geographically, adding a significant traditional financial services business alongside its existing portfolio in partnership with a high quality and entrepreneurial management team. 2. Overview of Hastings Hastings began operations in 1997 and the ordinary shares in Hastings were admitted to the Premium listing segment of the Official List of the Financial Conduct Authority of the United Kingdom (“FCA”) and to trading on the Main Market for listed securities of the London Stock Exchange (“LSE”) on 15 October 2015. Hastings is a fast-growing agile digital general insurance provider operating principally in the United Kingdom (“UK”) motor market. It provides private car and other forms of personal insurance cover (home, van and bike). In recent years, the Group has achieved growth within its chosen insurance verticals through a combination of strategic focus, optimised digital distribution, superior data generation and utilisation, sophisticated risk selection and advanced fraud detection and claims management. Hastings is led by a highly regarded, experienced and entrepreneurial management team that drives a consumer-centric ethos and culture. As at 30 September 2016, Hastings had a 6.4% share of the UK private car insurance market and just under 2.3 million live customer policies (“LCP”) (having grown LCP by 17% compound annual growth rate (“CAGR”) over the last three financial years). The Group’s success in capturing market share has been combined with consistently strong underwriting performance and growing retail profitability, with a CAGR of 21.5% in operating profit between 2012 and 2015. Group operating profit for the six months ended 30 June 2016 was GBP70.8 million (for the year ended 31 December 2015: £126.1 million; for the year ended 31 December 2014: GBP103.5 million and for the year ended 31 December 2013: GBP90.1 million). The Group operates as an integrated provider through two principal operating entities, Hastings Insurance Services Limited (“HISL”) which is regulated by the FCA in the UK and Advantage Insurance Company Limited (“Advantage”), which is based in Gibraltar and regulated by the Financial Services Commission (“FSC”). HISL is one of the UK’s fastest growing personal lines insurance intermediaries. It operates across a number of products, the largest being private car insurance, which are distributed through a number of brands including Hastings Direct, Hastings Premier, Hastings Essential, People’s Choice and InsurePink. HISL has full flexibility and responsibility for managing the relationships with the Group’s customers, including policy sales, customer service and customer retention. The Group’s delivery systems are designed for Price Comparison Websites (“PCW”) and direct distribution. PCWs have in recent years become the most important distribution channel for customers seeking to purchase a new private car insurance policy in the UK market. Approximately 88% of the Group’s new business is generated through the PCW channel. The Group has achieved a significant share of new business private motor insurance sales on PCWs (11.0% in the year ended 31 December 2015), strong and balanced distribution across all the major PCWs and superior customer retention rates. Advantage is responsible for the Group’s risk selection, underlying technical policy pricing, fraud management, reserving and claims handling. Advantage manages risk appetite through adopting a sophisticated data-driven approach to risk selection and risk pricing, optimised for the PCW market place, resulting in a high- quality underwriting portfolio. Advantage’s primary goal is the delivery of consistent underwriting profitability. The Group has a market capitalisation of £1.46 billion (as at 13 December 2016), employs 2,700 people and is headquartered in Bexhill-on-Sea with offices in Newmarket, Leicester and Gibraltar. Further information on Hastings is available at https://www.hastingsplc.com/. 3. Rationale for the Acquisition RMI has a stated strategy to utilise its current balance sheet gearing capacity to add to its existing portfolio of significant stakes in financial services companies. In addition to exploring opportunities to invest in early-stage businesses, RMI has previously indicated that it will seek to add a further large investment (fourth pillar) to its portfolio alongside its existing three large holdings in Discovery Limited, MMI Holdings Limited and OUTsurance Holdings Limited (“OUTsurance”). The Acquisition is consistent with RMI’s current investment mandate and style which focuses on high-quality companies offering long-term growth prospects which are led by empowered and aligned management teams. Furthermore, the Acquisition facilitates diversification of the portfolio into a new geography and growing market segments. RMI has an 84% interest in OUTsurance. OUTsurance and Hastings employ similar business models specifically in relation to their dynamic and analytical approaches to risk underwriting and the use of modern direct distribution channels. OUTsurance and Hastings have identified areas of potential collaboration that may include the sharing of best practices and learnings between the businesses, as appropriate. 4. Terms of the Acquisition 4.1. RMI (through Main Street 1353 Proprietary Limited, a wholly- owned subsidiary of RMI) will acquire up to 29.9% (potentially in three tranches as detailed in paragraph 7 below) directly from the Selling Shareholders (defined in paragraph 8 below) at a price per share (depending on the closing dates) between 248 pence and 255 pence, for an aggregate Acquisition Consideration (depending on closing dates) of between approximately GBP487.3 million and GBP499.5 million. 4.2. RMI will fund the Acquisition through a debt facility, which will be fully-underwritten by Rand Merchant Bank (A division of FirstRand Bank Limited). 4.3. RMI has also entered into a relationship agreement with Hastings (“Relationship Agreement”). Under the terms of the Relationship Agreement, RMI will be able to nominate for appointment a director to the board of Hastings (“Hastings Board”) and appoint an observer to the Hastings Board and to all standing committees of the Hastings Board (other than the nominations committee) for so long as RMI holds a direct or indirect interest of between 15% and 29.9% in the ordinary share capital of Hastings. The first such appointees will be Herman Bosman, CEO of RMI as the director and Willem Roos, CEO of OUTsurance as the observer. The Relationship Agreement will remain in force for so long as RMI holds 10% or more of Hastings’ issued shares. 5. Net assets and profits of Hastings The reported net asset value of Hastings at 31 December 2015 and 30 June 2016 was GBP503.2 million and GBP536.6 million, respectively. Hastings’ reported adjusted profit after tax as per its published financial statements for the year ended 31 December 2015 and the six months ended 30 June 2016 was GBP76.2 million and GBP51.9 million, respectively. The Group’s historical financial statements have been prepared in accordance with International Financial Reporting Standards. 6. Conditions precedent The Acquisition is subject to the fulfilment or waiver (where possible) of the following conditions precedent: 6.1. Regulatory approvals in South Africa, UK and Gibraltar, being: 6.1.1. Approval by the Financial Surveillance Department (“FSD”) of the South African Reserve Bank; 6.1.2. Approval by the FCA; and 6.1.3. Approval by the FSC. 7. Effective Date It is anticipated that the transfer of the shares and payment of the Acquisition Consideration may occur in up to three tranches linked to the timing of the receipt of the specific regulatory approvals, namely from the FSD, FCA and FSC (as noted in paragraph 6 above). The Acquisition is expected to become effective by no later than 30 April 2017. The final aggregate Acquisition Consideration will be determined with reference to a pre-agreed formula based on the timing of the completion of each tranche of the Acquisition. 8. Identity of the Selling Shareholders RMI’s interest in Hastings will be acquired from Hastings Investco Limited (“InvestCo”) and certain individual shareholders. Investco is a wholly-owned subsidiary of Hastings Holdco Limited, a company controlled by Hastings A, L.P. (an entity which