PSG : Firm Intention Announcement Regarding The Value-Unlock Initiative and Withdrawal of Cautionary Announcement

PSG GROUP LIMITED

(Incorporated in the Republic of South Africa) (Registration number: 1970/008484/06)

JSE Limited ("JSE") share code: PSG ISIN code: ZAE000013017

LEI code: 378900CD0BEE79F35A34 ("PSG Group" or "the Company")

FIRM INTENTION ANNOUNCEMENT REGARDING THE VALUE-UNLOCK INITIATIVE OF PSG GROUP, COMPRISING -

• • THE UNBUNDLING OF PSG GROUP'S SHAREHOLDING IN LISTED ENTITIES BEING PSG KONSULT, CURRO, KAAP AGRI, CA&S AND 25.1% OF THE ISSUED SHARES IN STADIO TO PSG GROUP SHAREHOLDERS;

• • THE REPURCHASE OF PSG GROUP SHARES FROM EXITING SHAREHOLDERS; AND

• • THE DELISTING OF PSG GROUP FROM THE JSE.

WITHDRAWAL OF CAUTIONARY ANNOUNCEMENTS

Unless otherwise defined, capitalised terms shall have the meaning ascribed to them in the Definitions section at the end of this Firm Intention Announcement.

• 1. INTRODUCTION

• 1.1 PSG Group Shareholders are referred to the detailed cautionary announcement published by the Company on SENS on 1 March 2022 ("Detailed Cautionary Announcement") in terms whereof, inter alia, PSG Group Shareholders were advised that the PSG Group Board had, in principle, resolved to investigate the unlocking of value for the benefit of PSG Group Shareholders, through the steps detailed in that announcement.

• 1.2 PSG Group Shareholders are advised that, following the above investigation, the PSG Group Board (excluding any directors who have, or are deemed to have, a personal financial interest in terms of section 75 of the Companies Act) has resolved to proceed with the PSG Group Restructuring, as set out in this Firm Intention Announcement.

• 1.3 PSG Group Shareholders are advised to peruse the PSG Group Restructuring Conditions to which the PSG Group Restructuring is subject.

• 1.4 The Company has overall received positive feedback regarding the PSG Group Restructuring from its shareholders.

2. PSG GROUP RESTRUCTURING

2.1

PSG Group Shareholders are hereby advised that, subject to the fulfilment (or where permissible, waiver) of the PSG Group Restructuring Conditions, PSG Group will as one indivisible arrangement:

2.1.1

implement the PSG Group Unbundling by unbundling -

• 2.1.1.1 the PSG Konsult Unbundled Shares, comprising approximately 60.8 percent of the total issued share capital of PSG Konsult, to PSG Group Shareholders by way of a pro rata distribution in specie, in the ratio of 3.86921 PSG Konsult Shares for every PSG Group Share held on the PSG Group Unbundling record date;

• 2.1.1.2 the Curro Unbundled Shares, comprising approximately 63.6 percent of the total issued share capital of Curro, to PSG Group Shareholders by way of a pro rata distribution in specie, in the ratio of 1.81597 Curro Shares for every PSG Group Share held on the PSG Group Unbundling record date;

• 2.1.1.3 the Kaap Agri Unbundled Shares, expected to comprise approximately 34.9 percent of the total issued share capital of Kaap Agri, to PSG Group Shareholders by way of a pro rata distribution in specie, in the ratio of 0.12364 Kaap Agri Shares for every PSG Group Share held on the PSG Group Unbundling record date;

• 2.1.1.4 the CA&S Unbundled Shares, comprising approximately 47 percent of the total issued share capital of CA&S, to PSG Group Shareholders by way of a pro rata distribution in specie, in the ratio of 1.03650 CA&S Shares for every PSG Group Share held on the PSG Group Unbundling record date;

• 2.1.1.5 the Stadio Unbundled Shares, being a portion of PSG Group's shareholding in that company, comprising approximately 25.1 percent of the total issued share capital of Stadio, to PSG Group Shareholders by way of a pro rata distribution in specie, in the ratio of 1.02216 Stadio Shares for every PSG Group Share held on the PSG Group Unbundling record date,

in terms of section 46 of the Companies Act and section 46 of the Income Tax Act, and amounting to a disposal of the greater part of PSG Group's assets or undertaking in terms of section 112 of the Companies Act;

• 2.1.2 implement a number of internal restructuring steps to be undertaken by PSG Group to facilitate the PSG Group Unbundling;

• 2.1.3 propose that, inter-conditionally with the PSG Group Unbundling, Exiting Shareholders dispose of their shareholding in PSG Group to PSG Group by way of a scheme of arrangement under section 114 of the Companies Act, in terms of the PSG Group Scheme, for a cash scheme consideration of R23.00 per PSG

Group Share, following which the Remaining Shareholders of PSG Group will be the only shareholders of PSG Group; and

2.1.4

be delisted from the JSE following implementation of the PSG Group Unbundling and the PSG Group Scheme.

2.2

The purpose of this Firm Intention Announcement is to provide PSG Group Shareholders with detailed information regarding the terms and conditions of the PSG Group Restructuring and to advise PSG Group Shareholders that PSG Group is ready, able and willing to proceed with the PSG Group Restructuring.

• 3. RATIONALE FOR THE PSG GROUP RESTRUCTURING

• 3.1 PSG Group is an investment holding company consisting of underlying investments that operate across a diverse range of industries, which include financial services (PSG Konsult), education (Curro and Stadio), food and related businesses (Zeder and Kaap Agri), route-to-market services for fast-moving consumer goods in southern Africa (CA&S), as well as early-stage unlisted investments in select growth sectors.

• 3.2 As a JSE-listed investment holding company, the main objective of PSG Group remains to create wealth for PSG Group Shareholders on a per share basis. However, the share price of PSG Group has unfortunately been trading at a significant discount of approximately 30% to the value of its underlying investments (or the so-called sum-of-the-parts value) in recent years, despite significant value-unlock initiatives undertaken, such as the Company's unbundling of nearly its entire shareholding in Capitec during the financial year ended 28 February 2021, in terms of which approximately R21bn was unlocked for PSG Group Shareholders, based on Capitec's closing share price on 21 April 2022.

• 3.3 Given the significant discount at which PSG Group has been trading to its sum-of-the-parts value in recent times, the PSG Group Board has investigated and decided on a value-unlock initiative by way of the PSG Group Restructuring.

• 3.4 The PSG Group Restructuring will entail the unbundling by PSG Group of its JSE-listed investments in PSG Konsult, Curro, Kaap Agri, CA&S and 25.1% of the total issued shares in Stadio to PSG Group Shareholders and thereafter the repurchase for cash of all the PSG Group Shares held by Exiting Shareholders by way of a scheme of arrangement in terms of section 114 of the Companies Act. The Remaining Shareholders will then hold 100 percent of PSG Group, with its remaining assets comprising mainly its investments in Zeder and PSG Alpha (the latter which holds predominantly early-stage investments and a remaining shareholding in Stadio).

• 3.5 The relevant steps to give effect to the PSG Group Restructuring as described in this Firm Intention Announcement are indivisible. Ultimately, it will result in the delisting of PSG Group from the JSE, allowing the Remaining Shareholders to focus on the remaining investments, most notably the early-stage investments that require further capital, management oversight and strategic input. The PSG Group Restructuring will accordingly ease the Company's administrative and regulatory compliance

obligations, whilst at the same time unlocking significant value for Exiting Shareholders.

3.6

The PSG Group investments forming part of the PSG Group Unbundling are mainly established businesses with strong balance sheets and no immediate requirement for additional capital and which no longer require an anchor shareholder. Furthermore, they have exceptional management teams and experienced boards. This allows the PSG Group Board to propose the PSG Group Restructuring. The reason why the entire indirect shareholding of PSG Group in Stadio will not be unbundled, is that PSG Group is of the view that it can still add value and support the business operations of Stadio, even though Stadio has substantially grown and consolidated over the last few years. This will be to the benefit of Stadio and will therefore also benefit Exiting Shareholders. In order to achieve this goal, PSG Group needs to retain a significant enough shareholding in Stadio following the PSG Group Restructuring.

• 4. SALIENT TERMS AND MECHANICS OF THE PSG GROUP RESTRUCTURING

• 4.1 Implementation of the PSG Group Restructuring

• 4.1.1 PSG Group will, subject to the fulfilment (or, where permissible, waiver) of the PSG Group Restructuring Conditions, unbundle the Unbundled Shares to PSG Group Shareholders, by way of a pro rata distribution in specie in terms of section 46 of the Companies Act and section 46 of the Income Tax Act.

• 4.1.2 The PSG Group Unbundling will be implemented in the distribution ratios set out in paragraph2.1.1above, based on the number of PSG Group Shares held by PSG Group Shareholders on the PSG Group Unbundling record date.

• 4.1.3 Inter-conditionally, but following the PSG Group Unbundling, the PSG Group Scheme will be implemented.

• 4.1.4 Thereafter, following the implementation of both the PSG Group Unbundling and the PSG Group Scheme, PSG Group is to be delisted from the JSE.

• 4.2 Anticipated Value Unlock

• 4.2.1 The table below illustrates the anticipated value to be unlocked by way of the PSG Group Restructuring for Exiting Shareholders, calculated as at the close of business on Monday, 28 February 2022 (prior to publication of the Detailed Cautionary Announcement on 1 March 2022) and on Thursday, 21 April 2022 -