Another hurdle cleared for Discovery Bank, as group raises R1.85bn in new share offering | Fin24
 
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Another hurdle cleared for Discovery Bank, as group raises R1.85bn in new share offering

Nov 09 2018 10:36
Lameez Omarjee and Khulekani Magubane, Fin24

Discovery [JSE:DSY] announced on Friday that it had raised R1.85bn in its accelerated bookbuild, as the health insurer and financial services provider cleared another hurdle for its banking business.

The bookbuild, announced on Thursday evening, is part of Discovery's plan to launch its own bank.

The group is intending to use the funds raised to buy out FirstRand Investment Holdings Limited's 25.01% interest in Discovery Bank, acquire the remaining 25.01% interest that FirstRand Bank owns in the Discovery card joint venture business, and acquire all rights to the Discovery card book and related assets.

In October 2017, Discovery announced the Registrar of Banks granted it a banking licence. At the time the registrar proposed that the 25.01% ultimate crossholding in Discovery Bank by FirstRand should be reduced and ultimately exited.

Discovery said in a notice to shareholder on Friday the bookbuild was oversubscribed, and it will issue over 11.4 million ordinary shares to qualifying investors at a price of R162 per share. 

"The sale price represents a 2% premium to Discovery’s 30 day Volume Weighted Average Price of R158.84 as at the close of trade on 8 November 2018."

Discovery directors, including Group CEO Adrian Gore, Barry Swartzberg and Herschel Mayers, collectively subscribed for 1.5 million shares. The subscription is subject to approval by shareholders at the annual general meeting scheduled for November 26.

Discovery will now make an application to the JSE for the listing of the placement shares, excluding those of the participating directors. Subject to approval, the listing and trading of these shares is expected to commence on Wednesday November 14. 

The group's shares were trading 3.80% weaker at R163.60 by 10:05. 

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discovery  |  adrian gore
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