Acquisition of up to 29.9% holding in the Company

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO 596/2014.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

FOR IMMEDIATE RELEASE

Hastings Group Holdings plc ("Hastings" or the "Company")

14 December 2016

Statement re: Acquisition of up to 29.9% holding in the Company by RMI

The Company announces that it has been notified by Hastings Investco Limited ("Investco"), the Company's principal shareholder, that along with certain individual shareholders (together with Investco, the "Selling Shareholders"), it has reached a conditional agreement with Rand Merchant Investment Holdings Limited and its wholly owned subsidiary Main Street 1353 Proprietary Limited ("Bidco", and together with Rand Merchant Investment Holdings Limited, "RMI") to sell a proportion of its holding to RMI. The sale will result in RMI acquiring from the Selling Shareholders up to 29.9 per cent. of the Company's issued ordinary share capital, 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 £487.3 million and approximately £499.5 million (the "Transaction"). The Transaction may be completed in up to three stages, each of which is linked to the receipt of regulatory approvals from the Financial Surveillance Department of the South African Reserve Bank, the UK Financial Conduct Authority and/or the Gibraltar Financial Services Commission, respectively. The Transaction is expected to be completed on or before 2 May 2017.

The Board of the Company welcomes the investment by RMI in the Company. RMI's significant exposure to the insurance sector through a number of strategic investments, including in OUTsurance, which is a fast growing motor and home insurer, brings valuable experience and opportunities for potential co-operation in the future.

Relationship Agreement

The Company has entered into a relationship agreement with RMI (the "Relationship Agreement"), which is conditional upon RMI acquiring a direct or indirect interest in at least 15 per cent. of the issued ordinary share capital of the Company. The Relationship Agreement will remain in force for so long as RMI holds a direct or indirect interest in at least 10 per cent. of the Company's issued ordinary share capital.

Pursuant to the Relationship Agreement, for so long as RMI holds a direct or indirect interest of between 15 per cent. and 29.9 per cent. in the issued ordinary share capital of the Company, RMI will be able to nominate a director for appointment to the Board of the Company and have an observer attend, but not vote at, meetings of the Board and the audit, remuneration and risk committees of the Company. The first such nomination for director will be Herman Bosman, the Chief Executive Officer of RMI, and one of the observers will be Willem Roos, Chief Executive Officer of OUTsurance Holdings Limited (OUTsurance).

The Relationship Agreement also contains a standstill provision which prohibits RMI from increasing its holding in the Company beyond 29.9 per cent. until three months after its appointed director and observers resign from their respective positions, except where: (a) the Company has given its prior consent, or (b) a bona fide third party makes, or announces its firm intention to make, an offer for at least 50 per cent. of the voting rights of the Company. Furthermore, RMI has agreed that during the 180 days following RMI acquiring a direct or indirect interest in at least 15 per cent. of the issued ordinary share capital of the Company, RMI will not sell or otherwise dispose of its interests in the ordinary shares in the Company (the "Lock up"). The Lock up is subject to carve outs in relation to: accepting (or making an irrevocable commitment in connection with) a general offer made to all shareholders under the City Code on Takeovers and Mergers; participating in a share buy-back offer which is offered to all shareholders; accepting an offer in respect of a rights issue or other pre-emptive share offering or any renunciation of rights to subscribe for shares in such an offering; transferring the legal title to a nominee to hold on behalf of RMI; any dissolution of RMI; any scheme of reconstruction of the Company or pursuant to a compromise or arrangement between the Company and its creditors; transferring the ordinary shares to OUTsurance or any of its subsidiaries; and any requirement to comply with applicable law or regulation.

Selling Shareholders' retained shareholdings

If RMI acquires 29.9 per cent. of the issued ordinary share capital of the Company, it is anticipated that RMI will become the Company's largest individual shareholder. Following completion of the Transaction, the GS Shareholders and Founder Shareholders would directly and indirectly together hold ordinary shares representing approximately 35.8 per cent. of the voting rights in the Company, assuming that they do not acquire or dispose of ordinary shares in the Company other than in connection with the Transaction. On the basis of the same assumptions, the GS Shareholders will control approximately 22.6 per cent. of the voting rights in the Company and the Founder Shareholders will control approximately 13.2 per cent. of the voting rights in the Company.

RMI is not regarded by the Panel on Takeovers and Mergers (the "Panel") as acting in concert with any other shareholder in relation to Hastings. Investco, the GS Shareholders and the Founder Shareholders continue to be regarded by the Panel as acting in concert with one another, but not with any other shareholder, in relation to Hastings.

GS Shareholders' and Founder Shareholders' nominated directors

Both the GS Shareholders and the Founder Shareholders have provided letters to the Company agreeing, subject to RMI acquiring ordinary shares in the Company at certain threshold levels: (a) to irrevocably waive their rights under their relationship agreement with the Company to nominate a director for appointment to the Board, and (b) to procure that one director appointed by them resigns from the Board. For the GS Shareholders, the relevant threshold is 29.9 per cent. of the current ordinary share capital of the Company (being all the ordinary shares to be acquired by RMI pursuant to the Transaction) and for the Founder Shareholders it is 19.9 per cent. of the current ordinary share capital of the Company.

Commenting on the Transaction, Gary Hoffman, the Company's CEO said:

"We welcome RMI as shareholders of Hastings and look forward to working with Herman Bosman as we continue to execute on our attractive growth strategy. RMI has a number of investments in insurance businesses in South Africa, Australia, New Zealand and the UK. Given this experience, Hastings will look to explore potential areas of cooperation with RMI and OUTsurance in the future that would accelerate execution of our existing strategy including in the areas of home, data analytics, mobile propositions and operational efficiencies."

For further information, please contact:

Hastings Group

Richard Hoskins

Chief Financial Officer

T: +44 (0)1424 738244 [email protected]

Louise Underwood

Director of Investor Relations

T: +44 (0)1424 738011 [email protected] 

Notes:

About Hastings

Hastings is a fast growing, agile, digitally focussed general insurance provider to the UK market, with almost 2.3 million customers and employing over 2,700 colleagues at sites in Bexhill, Gibraltar, Leicester and Newmarket.

Hastings has built its business by championing the customer through its refreshingly straightforward service and products, offering car, bike, van and home insurance directly to the public.

Hastings Direct is a trading name of Hastings Insurance Services Limited, the Group's UK broker, which also trades via 'Hastings Premier', 'Hastings Essential', 'Hastings Direct SmartMiles', 'People's Choice' and 'insurePink'.

The Group directly underwrites car, bike and van business through its Gibraltar based insurer Advantage Insurance Company Limited. Home insurance is provided through a number of panel partners and a co-insurance agreement with AXA.

About RMI

Rand Merchant Investment Holdings Limited (formerly Rand Merchant Insurance Holdings Limited) is an investment holding company with an investment team of experienced, alternative thinking, financial services specialists who actively partner smart and industry-changing people by being a shareholder of influence.

RMI's investments include:

· a 25 per cent. holding in Discovery Limited, a South African-founded financial services organisation with operations in the healthcare, life insurance, short term insurance, savings and investment and wellness markets;

· a 25.5 per cent. holding in MMI Holdings Limited, a South African business which now operates in 13 countries, whose core businesses are long-term insurance, asset management, investment, healthcare administration and employee benefits; and

· an 84 per cent. holding in OUTsurance Holdings Limited, a direct personal lines and small business short-term insurer.

RMI's ordinary shares are listed on the Johannesburg Stock Exchange.

About Investco

Investco is a wholly-owned subsidiary of Hastings Holdco Limited, a company controlled by Hastings A, L.P. (an entity which is indirectly owned by The Goldman Sachs Group, Inc.), Keith Charlton and Edward Fitzmaurice. At the close of business on 13 December 2016, Investco held 337,626,576 ordinary shares in the Company, equivalent to approximately 51.4 per cent. of the entire ordinary share capital of the Company.

Founder Shareholders and GS Shareholders

For the purposes of this announcement, the "Founder Shareholders" are Neil Utley (and certain members of his immediate family), Edward Fitzmaurice, Keith Charlton, Richard Brewster and Narmali Utley and the "GS Shareholders" are Hastings A, L.P., Hastings B, L.P and Goldman Sachs & Co.

Forward-looking statements

This announcement may contain forward looking statements, including statements about market trends and our strategy, investments, future operations, industry forecasts, regulatory framework and levels of leverage and indebtedness. Forward-looking statements provide our current expectations, intentions or forecasts of future events. Forward looking statements include statements about expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not statements of historical fact. Words or phrases such as "anticipate", "believe", "continue", "ongoing", "estimate", "expect", "intend", "may", "plan", "potential", "predict", "project", "target", "seek" or similar words or phrases, or the negatives of those words or phrases, may identify forward looking statements, but the absence of these words does not necessarily mean that a statement is not forward looking. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward looking statements.

A copy of this announcement will be available on the Company's website at: https://www.hastingsplc.com. The content of the website is not incorporated into and does not form part of this announcement.