Discovery to issue 11.4 mln shares to buy out FirstRand JV stake

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South Africa’s Discovery Ltd said on Friday it will issue 11.4 million shares to fund the acquisition of FirstRand’s stake in their credit card joint venture, a condition for the launch of its planned Discovery Bank.

The firm, which announced the accelerated book build on Thursday, is issuing the shares to raise the R1.85 billion ($132 million) it needs to finance the deal, it said.

The sale price was at a 2.0% premium to Discovery’s 30-day volume-weighted average share price as of the Nov. 8close, the company said, and was below the book runner’s guidance price of between R160 and R162 per share.

Discovery, which offers health, life and car insurance, was granted a South African banking licence last year, but only on condition that FirstRand sell its stake in a joint venture focused on Discovery-branded credit cards.

Certain Discovery directors, which include founders Adrian Gore and Barry Swartzberg and Vitality Life chief executive Herschel Mayers, have subscribed for 1.48 million shares at the clearing price of the book build.

The listing of the shares is expected to be on Nov. 14.