JD Group Ltd : JD GROUP LIMITED - Acquisition Of Immovable Properties And Rental Enterprises In Respect Thereof From Steinhoff International Holdings

1.

Introduction

The board of directors of JD Group announces that agreement (the "Agreement") has been reached between JD Group and Steinhoff International Holdings Limited ("Steinhoff"), in terms of which Steinhoff Properties (Pty) Limited ("Steinprops"), a wholly-owned subsidiary of Steinhoff, will dispose of 19 immovable properties and accompanying leases in respect thereof ("Rental Enterprises") to JD Group in exchange for new ordinary shares issued by JD Group (the "Transaction").

2.

Nature of the Rental enterprises

The Rental Enterprises consist of 19 automotive dealership properties across the Republic of South Africa ("the Properties"), which are occupied by Unitrans Automotive (Pty) Limited, an indirect wholly-owned subsidiary of JD Group. The Properties are currently subject to nine-year leases that commenced on 1 July 2012.

3.

Rationale for the Transactions

This transaction is aligned with JD Group's strategy to own
strategic properties that will in time diversify the asset base of
the JD Group. These strategic properties consist of selected
automotive retail sites, distribution centres and office buildings
currently in use by JD Group.

JD Group Properties (Pty) Limited, a wholly-owned subsidiary of JD
Group ("JD Props"), will be the vehicle to own all the strategic
property interests.

The acquisition of the Properties and the Rental Enterprises by JD
Props will not only enable JD Group to increase and diversify its
strategic property portfolio, but will also strengthen the
financial position of JD Group, as the purchase consideration will
be settled through the issuing of equity to Steinhoff.

4.

Terms of the Transaction

In terms of the Agreement, JD Props will acquire the Rental Enterprises for a total consideration of R446 962 427 ("the Purchase Consideration"). The Purchase Consideration will consist of a fresh issue of 9 508 322 JD Group shares credited as fully paid at an issue price of 4700.75 cents per share ("the Consideration Shares"), being the 28-day Volume Weighted Average Prices, at which a JD Group share traded on the JSE Limited ("JSE") from 14 October 2012 (ex-dividend date for the 2012 final dividend) up to and including 20 November 2012, the date on which JD Group and Steinhoff formally started discussions.

The Purchase Consideration shall be discharged by JD Props procuring the issue by JD Group of Renounceable Letters of Allotment, allocating the right to Steinprops to receive the allotment and issue of that number of Consideration Shares required to settle that portion of the Purchase Consideration payable in respect of each relevant transferred Property. As a result of the Transaction and as at the date of this announcement, Steinhoff's shareholding in JD Group will increase from 54.01% to 55.95%, net of treasury shares. Save for the approval of the listing application for the Consideration Shares, there are no outstanding conditions precedent to the Transaction.

5.

JSE Small Related-Party Transaction

Steinhoff is the controlling shareholder of JD Group. The Transaction will therefore be categorised as a small Related-Party transaction for JD Group in terms of section 10.7 of the JSE Listing Requirements ("the Listings Requirements"). Accordingly, JD Group requires a valuation report from an independent expert. In this regard, JD Group appointed an approved independent valuator, namely Rode Valuators ("Rode"), to perform an independent open market valuation of the Properties and the Rental Enterprises. Rode concluded that, on 1 November 2012, the value of the collective property portfolio amounted to R454.9 million, based on a variant of the income capitalisation valuation methodology and recognising the existing lease agreements between Steinprops and the various Unitrans Automotive dealerships, which lease agreements will continue under JD Props. The valuation report is available for inspection at JD Group's registered office.

6.

Effective date of the Transaction

As the Transaction involves the sale and transfer of 19 Properties as rental enterprises, the effective date of the Transaction will be the transfer date of each of the Properties in question. In terms of the Agreement, the transfer date is defined as the date on which registration of each Property takes place.

7.

Financial effects of the Transaction on JD Group

The unaudited pro forma financial effects of the Transaction on the earnings and headline earnings per share and the net asset value per share for the year ended 30 June 2012 are not significant (being less than 3%).

8.

JD Group responsibility statement

Steinhoff directors who are also directors on the JD Group board, recused themselves from the approval process relating to this Transaction.

The JD Group board of directors collectively and each director individually who took part in this decision, accepts responsibility for the accuracy of the information contained in this announcement. To the best of the directors' knowledge and belief, the information contained in this announcement is true and correct and nothing has been omitted which would make this information false or misleading or would be likely to affect the importance of the information.