2019 Investec PLC - Update on Asset Management Demerger Proposals 29 November 2019 Further to the announcement by Investec (comprising Investec plc and Investec Limited) on 14 September 2018 relating to the proposed demerger and public listing of its global Asset Management business (the "Demerger"), Investec plc and Investec Limited today announce further details of the proposals related to the Demerger ("Proposals") and key next steps. It is expected that Investec plc and Investec Limited will shortly publish a joint circular (the "Circular") to their shareholders (the "Investec Shareholders") relating to the Demerger, which should be read in conjunction with this announcement. Post Demerger, the Asset Management business (currently known as Investec Asset Management) will be known as Ninety One. The separation will be implemented by way of a demerger of Ninety One to a new dual-listed company structure ("DLC"), comprising Ninety One plc, a company incorporated in England and Wales, and Ninety One Limited, a company incorporated in South Africa. Ninety One plc is expected to have a premium listing on the London Stock Exchange and a secondary inward listing on the Johannesburg Stock Exchange and Ninety One Limited is expected to have a primary listing on the Johannesburg Stock Exchange. Following the Demerger, the business of Investec plc, Investec Limited and their respective subsidiaries ("Investec Group") will comprise the Investec Specialist Banking and Wealth & Investment businesses (together, "Investec Bank and Wealth") and will continue to be held under Investec Group's current DLC structure. The existing listings of Investec plc and Investec Limited will be retained. Demerger benefits for Investec Bank and Wealth The Demerger brings greater focus and simplicity to the Investec Specialist Banking and Wealth & Investment businesses, which should enhance the returns for shareholders and enable the businesses to grow with discipline. Investec Bank and Wealth has five key areas of focus to continue to enhance returns: Capital discipline:A more disciplined approach to capital allocation, particularly where businesses are non-core to the overall long-term growth and capital strategy, such as reducing the non-core equity investments portfolio in South Africa; Driving growth: Multiple strategic initiatives to deliver further growth in the medium term, including delivering a more holistic, client-centric offering in Specialist Banking, leveraging the investment in the UK private bank through client growth, and extending Wealth & Investment's proposition through the expansion of its UK financial planning and South African fiduciary capabilities; Cost management:Improved management of Investec Bank and Wealth's cost base, reducing the overall cost to income ratio through top line growth, moderating investment spend and cost savings (including central costs); Greater connectivity: Opportunity to build on the compelling existing linkages in Investec Bank and Wealth between business units and across geographies; and Digitalisation: Further developing digital capabilities, delivering an enhanced high-tech, high-touch client proposition and promoting greater connectivity and efficiency across all businesses. The Demerger also provides Investec Shareholders with a clear and transparent valuation for Investec Bank and Wealth's retained stake in Ninety One by virtue of Ninety One's public listing. Demerger benefits for Ninety One For Ninety One, the Demerger brings several core benefits: Enhances positioning: Establishes Ninety One as a truly independent global asset management business, better positioned to achieve its growth ambitions. Strategic flexibility: Provides the boards of directors of Ninety One ("Ninety One Boards") with the strategic freedom and flexibility to create value over the long-term. Talent acquisition and retention: Enhances Ninety One's ability to attract and retain the best talent in a competitive global market. Attractiveness for clients: Raises Ninety One's profile with both existing and prospective clients and improves ability for greater alignment with client objectives. Financial flexibility: Reduces some of the capital constraints placed on Ninety One through being part of Investec Group and, against a backdrop of continuing industry consolidation, provides Ninety One with a listed currency in the form of the Ninety One Shares. Demerger benefits for Investec Shareholders For the reasons outlined above, the Investec Boards strongly believe that implementing the Demerger simplifies the businesses and focuses them on their respective growth paths, which will enhance the long-term prospects of both businesses for the benefit of Investec Shareholders, clients, employees and other stakeholders. Specifically, the Investec Bank and Wealth management team have committed to deliver improved returns on equity with an Investec Bank and Wealth target of 12% to 16% to be achieved by the financial year ending 31 March 2022 (compared to 10.7% achieved by Investec Bank and Wealth for the six months ended 30 September 2019), alongside detailed financial targets for each of the underlying businesses, whilst Ninety One will remain focused on delivering profitable growth over the long term The Investec Boards believe Investec Shareholders should benefit from value creation over the medium term through direct ownership of two separately listed companies, each pursuing its own growth path. Following the Demerger, the combined dividend capacity of Investec Bank and Wealth and Ninety One is expected to be unchanged. Based on the proposed dividend policies of Investec Bank and Wealth and Ninety One, the Investec Boards expect that the aggregate level of dividends received by the holders of ordinary shares in Investec Limited and Investec plc ("Investec Ordinary Shareholders") from their two shareholdings will initially be comparable to the level of dividends they would have received if the Demerger did not happen. In taking the decision to separate Ninety One, the Investec Boards considered the importance of Investec Group to South Africa, and its continued commitment to South Africa and its development. Ninety One Limited will have a primary listing on the Johannesburg Stock Exchange and Ninety One plc will have a premium listing on the London Stock Exchange and a secondary inward listing on the Johannesburg Stock Exchange to ensure South African resident shareholders are treated equally with non-resident shareholders and can benefit from the expected future growth in Ninety One. Ninety One considers South Africa and the rest of Africa as important markets for its future and is committed to on-going investment and growth in these markets. Impact on Investec Shareholder Following the implementation of the Proposals, it is expected that: approximately 55.9% of the total issued share capital of Ninety One plc, representing approximately 37.7% of the combined total issued share capital of Ninety One, will be held by Investec plc Ordinary Shareholders; approximately 53.1% of the total issued share capital of Ninety One Limited representing approximately 17.3% of the combined total issued share capital of Ninety One, will be held by Investec Limited Ordinary Shareholders; up to approximately 8.3% of the total issued share capital of Ninety One plc and up to approximately 13.5% of the total issued share capital of Ninety One Limited, representing up to approximately 10% of the combined total issued share capital of Ninety One, will be held by new and/or existing institutional and certain other investors following a secondary cash placing that is expected to be carried out on the same day as Admission (the "Ninety One Share Sale"); approximately 15.8% of the total issued share capital of Ninety One plc, representing approximately 10.7% of the combined total issued share capital of Ninety One, will be held by Investec plc; approximately 13.4% of the total issued share capital of Ninety One Limited, representing approximately 4.3% of the combined total issued share capital of Ninety One, will be held by Investec Limited (through its wholly owned subsidiary, Investec Investments); and approximately 20% of the total issued share capital of Ninety One plc and approximately 20% of the total issued share capital of Ninety One Limited, representing approximately 20% of the combined total issued share capital of Ninety One, will be held by Forty Two Point Two (the investment vehicle through which management and directors of Ninety One participate in the business) The net proceeds of the Ninety One Share Sale will be retained by Investec plc and Investec Limited (through Investec Investments) strengthening the overall capital position of Investec Bank and Wealth, supporting its growth plans, funding tax liabilities arising as a result of the Ninety One Share Sale and costs arising as a result of the Proposal The Investec Ordinary Shareholders will: retain their shareholdings in Investec plc and/or Investec Limited, as applicable, and receive one Ninety One plc Share for every two Investec plc Ordinary Shares held and/or one Ninety One Limited Share for every two Investec Limited Ordinary Shares held, such that they will hold shares in two publicly listed companies which will have enhanced long-term prospects as a result of the Demerger; and receive dividends from two companies from the financial year ending 31 March 2021: with Ninety One expecting to target, subject to approval of the Ninety One Boards, an ordinary dividend pay-out ratio of at least 50% of operating earnings adjusted for tax. In addition, Ninety One is expected to retain only after tax earnings sufficient to meet current or expected changes in its regulatory capital requirements and investment needs, as well as a reasonable buffer to protect against fluctuations in those requirements. Subject to approval of the Ninety One Boards, it is expected that the remaining balance of after tax earnings, after taking into account any specific events, would be returned to Ninety One Shareholders through payment of a special dividend; and with Investec Bank and Wealth targeting a dividend pay-out ratio of 30% to 50% of the consolidated Investec Group's adjusted earnings per share in pounds sterling. Based on the proposed dividend policies of Investec Bank and Wealth and Ninety One, the Investec Boards expect that the aggregate level of dividends received by Investec Ordinary Shareholders from their two shareholdings will initially be comparable to the level of dividends they would have received if the Demerger did not happen. The transaction structure is expected to be as tax efficient as practicable for Investec Ordinary Shareholders from a UK and South African tax perspective. Further information in relation to tax, including a general description of certain tax consequences of the Proposals relevant to Investec Ordinary Shareholders who are resident for tax purposes in the UK, the United States, South Africa, Namibia or Botswana, will be set out in the Circular. Pro forma financial impact The implementation of the Proposals is expected to have a positive impact on the CET1 ratio of Investec plc, improving by circa 1.3% to 12.0% (as at 30 September 2019 on a pro forma basis before the deduction of foreseeable dividends), and a positive impact on the CET1 ratio of Investec Limited, improving by circa 0.6% to 12.3% (as at 30 September 2019 on a pro forma basis including unappropriated profits). To facilitate the Proposals, Investec Group will incur a number of transaction costs, estimated to be at least £56 million (excluding VAT or equivalent tax outside the UK), including tax costs estimated to be at least £19 million and advisory costs, underwriting fees and transaction expenses estimated to be £37 million. Further information on the expected financial effects of implementing the Proposals, including the derivation of the pro forma CET1 ratios, will be set out in the Circular. Investec Shareholder and Court approvals required In order for the Proposals to be finalised, Investec Shareholder approval will be sought at a general meeting of Investec plc shareholders and a general meeting of Investec Limited shareholders (the "General Meetings") expected to be held at 10:30am (London time) on Monday, 10 February 2020, which will be followed by a separate meeting of Investec plc ordinary shareholders convened pursuant to an order of the Court (the "Court Meeting") in respect of the UK Demerger, expected to be held at 11:00am (London time) on the same day. The Proposals can be finalised only if they receive sufficient support from Investec Shareholders at each of these meetings and if the scheme of arrangement required to implement the UK Demerger is approved by the Court. Timings The effective time for the UK Demerger is currently expected to be 7.00 p.m. (London time) on Friday, 13 March 2020. At this time, Investec plc will transfer part of the Investec Asset Management Limited shares held by it to Ninety One plc and Ninety One plc will issue new shares in Ninety One plc to ordinary shareholders of Investec plc. The effective time for the SA Demerger is currently expected to be 9.00 p.m. (Johannesburg time) on Friday, 13 March 2020. At this time, Investec Limited will declare an unconditional distribution in respect of all of the Ninety One Limited shares that it will hold at the record date for Johannesburg Stock Exchange settlement purposes to ordinary shareholders of Investec Limited. Please refer to the timetable set out below. Further information on the expected key dates for the Proposals will be set out in the Circular. Fani Titi and Hendrik du Toit, Joint CEOs said: "We continue to make good progress with respect to the proposed demerger and listing of Ninety One. We remain excited about the benefits of this transaction and are determined to drive simplification across the group, focusing on enhancing the long-term prospects of Ninety One and Investec Bank and Wealth for the benefit of all our stakeholders. Our shareholders are set to benefit from the resulting value creation through their direct ownership of two distinct businesses, well-positioned for long-term growth." Conference call details A conference call to address any questions from investors on information contained in the Circular will be held at 09:00 UK time/11:00 SA time on Tuesday, 3 December 2019. Further details in this regard, along with the Circular, will be available later on Investec's website at: www.investec.com/demerger. Telephone conference options as below: SA participants: +27 10 201 6800 OR +27 11 535 3600 UK participants: +44 333 300 1418 Rest of Europe and other participants: +27 11 535 3600 OR +27 10 201 6800 USA participants: +1 508 924 4326 Enquiries / Advisers: Investec Investor Relations General enquiries: +27 (0) 11 286 7070 or +44 (0) 20 7597 5546 Carly Newton: +44 (0) 20 7597 4493 Lansons (UK PR advisers) Tom Baldock Tel: +44 (0) 207 566 9716 / +44 (0) 7860 101 715 (mobile) Brunswick (SA PR advisers) Graeme Coetzee Tel: +27 (0) 11 502 7419 / +27 (0) 63 685 6053 (mobile) J.P. Morgan Cazenove and Fenchurch Advisory Partners are acting as joint financial advisers to Investec Group in relation to the Demerger JSE Transaction Sponsor: J.P. 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