PLND.L Regulatory News (PLND)

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

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

13 July 2016

RECOMMENDED CASH OFFER

for

Poundland Group PLCby

Steinhoff Europe AG

to be effected

by way of a Scheme of Arrangement

under Part 26 of the Companies Act 2006

Summary

Commenting on the Offer, Darren Shapland, Chairman of Poundland, said:

"The Poundland Board believes that SEAG's all-cash offer presents Poundland shareholders with an opportunity to realise their shareholding at a certain and attractive price, securing earlier delivery of the Poundland Group's medium term value than could be expected from the ongoing turnaround process against a background of increasing economic uncertainty in the UK and a more challenging trading environment.

The single-price sector has undergone significant modernisation and professionalisation in recent years and is now a mainstream feature of UK retail. Through the hard work and dedication of our many thousands of talented colleagues, Poundland has played a pivotal role in that transformation. Steinhoff is a well-capitalised, international business with a clear and proven commitment to value retailing. They share our vision for the growth and expansion of Poundland and, as such, we believe they are a suitable and appropriate partner for our colleagues, our suppliers and stakeholders."

Commenting on the Offer, Markus Jooste, CEO of Steinhoff, said:

"The Board of Steinhoff and its management team are enthusiastic about the opportunities that this transaction brings: we believe that there is significant merit in bringing Poundland into Steinhoff's global network. Steinhoff is developing a fast-growing, price-led retail business across the UK and the rest of Europe. Poundland would be a complementary fit to this growth story.

Steinhoff recognises the strength and value of the Poundland management team and anticipates that they will play a key role in the ongoing growth and development of Poundland as part of the Steinhoff group. We look forward to welcoming Poundland employees to be part of one of Europe's leading multi-format discount retailers."

This summary should be read in conjunction with, and is subject to, the full text of this Announcement (including its Appendices). The Offer shall be subject to the Conditions and further terms set out in Appendix I to this Announcement and to the full terms and conditions which shall be set out in the Scheme Document. Appendix II to this Announcement contains the sources of information and bases of calculations of certain information contained in this Announcement, Appendix III contains a summary of the irrevocable undertakings received in relation to this Offer and Appendix IV contains definitions of certain expressions used in this summary and in this Announcement.

Further Information

Linklaters LLP are providing legal advice to Steinhoff and SEAG. Freshfields Bruckhaus Deringer LLP are providing legal advice to Poundland.

Enquiries

Important Notices

Investec Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the UK. Investec Bank plc is acting exclusively as financial adviser to Steinhoff and SEAG and no one else in connection with the Offer and shall not be responsible to anyone other than Steinhoff and SEAG for providing the protections afforded to clients of Investec Bank plc nor for providing advice in connection with the Offer or any matter referred to herein.

J.P. Morgan Limited, which conducts its UK investment banking business as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised and regulated in the United Kingdom by the Financial Conduct Authority. J.P. Morgan Cazenove is acting as financial adviser exclusively for Poundland and no one else in connection with the matters set out in this Announcement and will not regard any other person as its client in relation to the matters in this Announcement and will not be responsible to anyone other than Poundland for providing the protections afforded to clients of J.P. Morgan Cazenove, nor for providing advice in relation to any matter referred to herein.

N. M. Rothschild & Sons Limited, which is authorised by the Prudential Regulation Authority and regulated by the FCA and the Prudential Regulation Authority in the United Kingdom, is acting exclusively for Poundland and no one else in connection with the Offer and will not be responsible to anyone other than Poundland for providing the protections afforded to its clients or for providing advice in relation to the Offer or any other matters referred to in this Announcement.

Shore Capital Stockbrokers Limited ("Shore Capital") which is authorised and regulated in the United Kingdom by the Financial Conduct Authority is acting as corporate broker to Poundland and no one else in connection with the Offer and other matters described in this Announcement and will not be responsible to anyone other than Poundland for providing the protections afforded to clients of Shore Capital or for providing advice in relation to the Offer and other matters described in this Announcement.

This Announcement is for information purposes only and does not constitute an offer to sell or an invitation to purchase any securities or the solicitation of an offer to buy any securities, pursuant to the Offer or otherwise. The Offer shall be made solely by means of the Scheme Document or any document by which the Offer is made which shall contain the full terms and Conditions of the Offer, including details of how to vote in respect of the acquisition.

This Announcement has been prepared for the purpose of complying with English law and the Takeover Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Poundland shall prepare the Scheme Document to be distributed to holders of Poundland Shares. Poundland, SEAG and Steinhoff urge Poundland Shareholders to read the Scheme Document when it becomes available because it shall contain important information relating to the Offer.

This Announcement does not constitute a prospectus or prospectus equivalent document.

Overseas Shareholders

The release, publication or distribution of this Announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements.

The Offer relates to shares of a UK company and is proposed to be effected by means of a scheme of arrangement under the laws of England and Wales. A transaction effected by means of a scheme of arrangement is not subject to proxy solicitation or tender offer rules under the US Securities Exchange Act of 1934 (the "US Exchange Act"). Accordingly, the Offer is subject to the disclosure requirements, rules and practices applicable in the United Kingdom to schemes of arrangement, which differ from the requirements of US proxy solicitation or tender offer rules. However, if SEAG were to elect to implement the Offer by means of a takeover offer in the circumstances provided for in this Announcement, such takeover offer shall be made in compliance with all applicable laws and regulations, including Section 14(e) of the US Exchange Act and Regulation 14E thereunder. Such a takeover would be made in the United States by SEAG and no one else. In addition to any such takeover offer, SEAG, certain affiliated companies and the nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in Poundland outside such takeover offer during the period in which such takeover offer would remain open for acceptance. If such purchases or arrangements to purchase were to be made they would be made outside the United States and would comply with applicable law, including the US Exchange Act.

Unless otherwise determined by SEAG or required by the Takeover Code, and permitted by applicable law and regulation, the Offer shall not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the offer by any such use, means, instrumentality or form within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Announcement and all documents relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this Announcement and all documents relating to the Offer (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction.

The availability of the Offer to Poundland Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.

The Offer shall be subject to the applicable requirements of the Takeover Code, the Panel, the London Stock Exchange, the Financial Conduct Authority and the UKLA.

Forward Looking Statements

This Announcement contains statements about Steinhoff, SEAG and Poundland that are or may be forward looking statements. All statements other than statements of historical facts included in this Announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "projects" or words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Steinhoff's or Poundland's operations and potential synergies resulting from the Offer; and (iii) the effects of government regulation on Steinhoff's or Poundland's business.

Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof. Each of Steinhoff, SEAG and Poundland disclaims any obligation to update any forward looking or other statements contained herein, except as required by applicable law.

No profit forecasts or estimates

No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for Steinhoff or Poundland, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Steinhoff or Poundland, as appropriate.

Disclosure requirements of the Takeover Code

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the Offer Period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th Business Day following the commencement of the Offer Period and, if appropriate, by no later than 3.30 pm (London time) on the 10th Business Day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the Business Day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at http://www.thetakeoverpanel.org.uk/, including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.

Publication on Website and Availability of Hard Copies

A copy of this Announcement shall be made available subject to certain restrictions relating to persons resident in Restricted Jurisdictions on Steinhoff's and Poundland's websites at www.steinhoffinternational.com and www.poundlandcorporate.com respectively by no later than 12 noon (London time) on 14 July 2016. For the avoidance of doubt, the contents of the websites referred to in this Announcement are not incorporated into and not do form part of this Announcement.

You may request a hard copy of this Announcement by:

You may also request that all future documents, announcements and information to be sent to you in relation to the Offer should be in hard copy form.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

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

13 July 2016

RECOMMENDED CASH OFFER

for

Poundland Group PLCby

Steinhoff Europe AG

to be effected

by way of a Scheme of Arrangement

under Part 26 of the Companies Act 2006

1 Introduction

The boards of Steinhoff and Poundland are pleased to announce that they have reached agreement on the terms of a recommended cash offer pursuant to which SEAG or a wholly-owned subsidiary of SEAG (with the support of its ultimate parent Company, Steinhoff) shall acquire the entire issued and to be issued share capital of Poundland not already directly or indirectly owned by it. As at 12 July 2016 (being the latest practicable date prior to publication of this Announcement) SEAG was directly interested in 63,473,352 Poundland Shares, representing approximately 23.6 per cent. of Poundland's issued share capital.

It is intended that the Offer is to be effected by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.

2 The Offer

Under the terms of the Offer, which shall be subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document, each Poundland Shareholder shall be entitled to receive:

for each Poundland Share 220 pence in cash

The Offer, together with the Agreed Dividend, values the entire issued share capital of Poundland at approximately £597 million on a fully diluted basis.

The Agreed Dividend of two pence per Poundland Share was announced in the Poundland results announcement for the year ended 27 March 2016, dated 16 June 2016, and will be paid on 23 September 2016 to holders of Poundland Shares whose names are on the register at the close of business on 9 September 2016. 

The Cash Value of 222 pence in cash (being the aggregate of the Offer Price and the Agreed Dividend) represents a premium of approximately:

The Offer Price of 220 pence represents a premium of approximately 39.0 per cent. to the Closing Price per Poundland Share of 158.25 pence on 13 June 2016 (being the Business Day prior to the first acquisition of Poundland Shares by SEAG).

It is currently expected that the Scheme Document shall be published in early August, that the Court Meeting and the General Meeting shall be held on 7 September 2016 and that the Scheme shall become Effective by mid-September 2016.

3 Background to and reasons for the Offer

Steinhoff has a proven track record of acquiring and successfully integrating relevant companies and their brands into its network of retail companies supported by an efficient integrated supply chain in Europe, Africa and the Pacific Rim.

Steinhoff is developing a fast-growing, price-led retail business across the UK and the rest of Europe. Steinhoff believes the Poundland business will be an attractive addition to its existing multi-format discount retail business, and accelerate the group's customer proposition and growth dynamics.

4 Background to and reasons for the recommendation

The Poundland Board believes that SEAG's all-cash offer provides Poundland's shareholders with the opportunity to realise their shareholding at an attractive price and at a significant premium to Poundland's undisturbed share price.

The past year has been both challenging and transformative for Poundland. The acquisition of 99p Stores strengthened Poundland's position as Europe's biggest single-price discounter and positions it well for the long term, but also placed significant strain on the core business. The conversion of 99p Stores to the Poundland fascia was completed ahead of schedule, but was more capital intensive and needed more attention from management than expected. Also, as Poundland has reported over the past year, the impact of increased competition, falling high street footfall, and changing consumer shopping behaviour have impacted performance.

When considering the Offer, the Poundland Directors have taken into account the current market conditions, including the short term and long term challenges and opportunities for the business, and the likely time required for Poundland to improve performance and achieve its strategy. In addition, the UK's decision to leave the EU has increased short term uncertainty. The Poundland Directors have also considered the benefits that being part of a larger diversified retail group would bring to the Poundland business.

The Poundland Directors considered the Offer with regard to price, deliverability and with reference to the range of other strategic options available to Poundland. In particular, the Poundland Directors have evaluated the terms of the Offer in relation to the prospects of the business and the potential medium term standalone value of Poundland Shares. The Poundland Directors have also considered the interests of Poundland employees, customers and other stakeholders in addition to the economic benefits to Poundland Shareholders.

The Poundland Board believes that Steinhoff is a strong, well-capitalised partner which can continue to develop the Poundland business. Steinhoff provides Poundland with significantly greater access to broader and deeper capital resources and global synergies. The Poundland Board expects that Steinhoff will be able to accelerate Poundland's strategy by expanding its routes to market and exploiting the greater scale and reach of Steinhoff's operations.

Following careful consideration of the above factors, the Poundland Board believes that the Offer reflects an attractive price for the business and provides certainty, in cash, to Poundland Shareholders today.

5 Recommendation

Following careful consideration of the above factors, the Poundland Directors, who have been so advised by J.P. Morgan Cazenove and Rothschild as to the financial terms of the Offer, consider the terms of the Offer to be fair and reasonable. In providing advice to the Poundland Directors, J.P. Morgan Cazenove and Rothschild have taken into account the commercial assessments of the Poundland Directors. Rothschild is providing independent financial advice to the Poundland Directors for the purposes of Rule 3 of the Takeover Code.

Accordingly, the Poundland Directors intend to recommend unanimously that Poundland Shareholders vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting, as the Poundland Directors who hold Poundland Shares have irrevocably undertaken to do (in their personal capacity) in respect of their own beneficial holdings (or those they otherwise control the exercise of) of 14,719,261 Poundland Shares, representing approximately 5.5 per cent. of the share capital of Poundland in issue on 12 July 2016 (being the latest practicable date prior to the date of publication of this Announcement).

6 Irrevocable undertakings

Steinhoff has received irrevocable undertakings from each of the Poundland Directors to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting, in respect of a total of 14,719,261 Poundland Shares, representing approximately 5.5 per cent. of the share capital of Poundland in issue on 12 July 2016 (being the latest practicable date prior to publication of this Announcement). These irrevocable undertakings remain binding in the event of a competing offer. Further details of these irrevocable undertakings (including the circumstances in which they shall fall away) are set out in Appendix III to this Announcement.

Steinhoff has also received an irrevocable undertaking to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting from Canada Life Investments in respect of a total of 4,075,404 Poundland Shares representing, in aggregate, approximately 2 per cent. of Poundland Shares held by holders eligible to vote at the Court Meeting and approximately 1.5 per cent. of Poundland's issued share capital.

Further details of these irrevocable undertakings are set out in Appendix III to this Announcement.

SEAG has also undertaken in the Co-operation Agreement to vote in favour of the resolutions proposed at the General Meeting in respect of its entire beneficial holding of Poundland Shares being 63,473,352 Poundland Shares, representing approximately 23.6 per cent. of Poundland's issued share capital. SEAG is not permitted to vote on the Scheme at the Court Meeting.

Taking into account the irrevocable undertakings from the Poundland Directors and Canada Life Investments, Steinhoff has therefore received irrevocable undertakings to vote in favour of (i) the Scheme at the Court Meeting representing, in aggregate, approximately 9 per cent. of Poundland Shares held by holders eligible to vote at the Court Meeting and (ii) the resolutions to be proposed at the General Meeting representing, in aggregate, approximately 7 per cent. of Poundland's issued share capital and, (for purposes of the General Meeting only) when aggregated with the Poundland Shares that Steinhoff already holds (through SEAG), 30.6 per cent. of the Poundland share capital in issue, in each case on 12 July 2016 (being the latest practicable date prior to publication of this Announcement).

7 Information on Steinhoff and SEAG

Steinhoff is an integrated retailer that manufactures, sources and retails furniture, household goods and general merchandise in Europe, Africa and Australasia. Steinhoff's vertically integrated business model is based upon a strategy of sourcing and manufacturing products at low cost and distributing them to its value-conscious customer base through its extensive retail footprint.

Steinhoff's integrated retail divisions comprise of:

Steinhoff has a primary listing on the Frankfurt Stock Exchange and a secondary listing on the Johannesburg Stock Exchange and as at 12 July 2016 (being the latest practicable date prior to publication of this Announcement) has a market capitalisation of approximately €21 billion. Steinhoff reported revenue and operating profit for the nine-months ended 31 March 2016 of €9.9 billion and €1.1 billion respectively, and employs approximately 105,000 people.

Steinhoff, through SEAG as its wholly owned subsidiary, is a holding company invested predominantly in household goods and diversified related industries with interests in the United Kingdom, Continental Europe, and the Pacific Rim. It employs a vertically integrated and geographically diverse business model, covering the full spectrum from raw material to retail outlets across an extensive product range.

8 Information on Poundland

Poundland is the largest single-price value general merchandise retailer in Europe by both sales and by number of stores. Poundland operates a network of over 900 stores across the UK, Republic of Ireland, and Spain.

Poundland is a price-driven, volume-led business offering an extensive range of products across 17 categories, with the average Poundland store carrying approximately 3,500 core range SKUs, including over 1,000 branded products, including Cadbury, Mars, Heinz, Nestle, Colgate, Coca Cola, Walkers and McVities, and a number of own branded products, including Jane Asher's Kitchen, Make-up Gallery cosmetics and Purple Ivy Jewellery.

Poundland operates from headquarters in Willenhall, West Midlands, and employed on average 18,000 colleagues in the financial year ended 27 March 2016. Poundland distribution capacity was enhanced in June 2016 with a new purpose built 350,000 sq. ft. distribution centre at Wigan.

In the financial year ended 27 March 2016, Poundland generated revenue of £1,326.0 million and Underlying EBITDA* of £56.9 million with an Underlying comparable EBITDA margin* of 4.6 per cent.

* Underlying includes contributions from converted 99p stores.

9 Management, employees and locations

The transaction will create an exciting opportunity for the Poundland management and employees to join Steinhoff. Steinhoff recognises the strength and value of the Poundland management and employees and considers them to be important to the future success of Poundland. Following the completion of the Offer, the existing contractual and statutory employment rights of the Poundland executive directors, Poundland Executive Committee and employees shall be fully observed and pension obligations complied with, in accordance with applicable law.

Steinhoff's plans for Poundland do not involve any material change in the conditions of employment of Poundland's employees. Steinhoff has no plans to change Poundland's places of business.

Steinhoff has agreed to enter into good faith discussions with Poundland to determine the treatment of Poundland's bonus arrangements for the current financial year.

10 Arrangements between Steinhoff and Poundland management

Steinhoff has agreed that any executive director or member of the Poundland Executive Committee who leaves employment within 24 months following the Effective Date for a good leaver reason will be eligible to a payment in lieu of any part of his or her notice period that is not required to be worked in a single lump sum.

Steinhoff has acknowledged that Poundland may make grants under the Poundland Performance Share Plan and the Poundland Restricted Share Plan prior to the Effective Date to satisfy pre-existing obligations to certain key executives, including executive directors and members of the Poundland Executive Committee, and Steinhoff has further agreed to offer to exchange those awards for equivalent awards over Steinhoff shares or cash of an equivalent value. If Poundland has not made such grants prior to the Effective Date, Steinhoff has agreed to grant awards over Steinhoff shares or cash awards of an equivalent value no later than three months after the Effective Date.

Various arrangements have also been agreed in relation to the treatment of existing awards under the Poundland Performance Share Plan, a plan in which a number of senior employees, including executive directors and members of the Poundland Executive Committee, participate. Steinhoff has agreed to offer each holder of Performance Share Plan awards granted in 2014 the opportunity to exchange one sixth of the Poundland Shares comprised in the award for an equivalent award over shares in Steinhoff, subject to performance targets that are to be agreed. The treatment of awards granted under the plan in 2015 remains subject to discussion between Poundland and Steinhoff.

11 Poundland Share Plans

Participants in the Poundland Share Plans will be contacted regarding the effect of the Offer on their rights under the Poundland Share Plans and appropriate proposals shall be made to such participants in due course. Further details of the terms of such proposals shall be included in the Scheme Document. Arrangements in relation to the Poundland Performance Share Plan are described in paragraph 10 above. In addition, Steinhoff has agreed that participants will be given the opportunity to exchange all outstanding options under the Poundland Company Share Option Plan and the Poundland Sharesave Scheme for options over Steinhoff shares of equivalent value. Exchange will not be offered in relation to awards currently outstanding under the Poundland Restricted Share Plan.

Steinhoff shall enter into good faith discussions to ensure that employees at or below executive level shall for a period of at least 12 month after the Effective Date be able to participate in broadly comparable arrangements to the ones provided to such employees by Poundland.

12 Financing

The cash consideration payable under the Offer will be funded from the acquisition facility provided by Crédit Agricole Corporate and Investment Bank and UniCredit Bank Austria AG.

Investec Bank plc, financial adviser to Steinhoff and SEAG, is satisfied that sufficient resources are available to satisfy in full the cash consideration payable to Poundland Shareholders under the terms of the Offer (which, for the avoidance of doubt, does not include the Agreed Dividend which is payable by Poundland).

13 Offer-related Arrangements

Confidentiality Agreement

Steinhoff and Poundland entered into a confidentiality and standstill agreement on 4 July 2016 (the "Confidentiality Agreement") pursuant to which Steinhoff has undertaken to keep confidential information relating to Poundland and not to disclose it to third parties (other than to permitted disclosees) unless required by law or regulation. These confidentiality obligations shall remain in force until (i) completion of the Offer, or, (ii) in the event of termination of discussions or negotiations, the expiry of a period of 12 months from the date of the Confidentiality Agreement.

This agreement also contains undertakings from Steinhoff that for a period of nine months Steinhoff shall not, without Poundland's prior written consent, acquire or offer to acquire any interest in any shares or other securities of Poundland (which undertaking ceases as of the date of this Announcement), and that, for a period of 12 months, Steinhoff shall not, without Poundland's prior written consent, approach any of Poundland's employees, offices or customers or employ or otherwise engage certain of the Poundland employees.

Co-operation Agreement

Pursuant to a co-operation agreement dated 13 July 2016 (the "Co-operation Agreement"): (i) Poundland and SEAG have agreed to co-operate with each other and provide each other with all reasonable information, assistance and access in a timely manner in order to make any regulatory filings; (ii) SEAG has agreed to provide Poundland with certain information for the purposes of the Scheme Document and to otherwise assist with the preparation of the Scheme Document; (iii) SEAG has reserved its right, with the consent of the Panel, to implement the Offer by way of a takeover offer and agreed to certain provisions that would apply in the event of a switch to a takeover offer; and (iv) each of Poundland and SEAG has agreed to take any action necessary to implement certain proposals in relation to the Poundland Share Plans.

SEAG has also undertaken in the Co-operation Agreement to vote in favour of the resolutions proposed at the General Meeting in respect of its entire beneficial holding of Poundland Shares. SEAG is not permitted to vote on the Scheme at the Court Meeting.

The Co-operation Agreement will terminate: (i) if agreed in writing by SEAG and Poundland; (ii) upon written notice from SEAG to Poundland if the Poundland Directors withdraw, adversely modify or adversely qualify their unconditional and unanimous recommendation of the Offer; (iii) upon written notice from SEAG to Poundland if a competing transaction, completes, becomes effective or is declared unconditional in all respects; (iv) if the Scheme is withdrawn or lapses (other than pursuant to SEAG's right to switch to a takeover offer or where such withdrawal or lapse is followed within ten Business Days by an announcement by SEAG or a person acting in concert with SEAG of a firm intention to make an offer on substantially the same or improved terms); or (v) upon written notice by either party, if the Offer has not become Effective by 30 November 2016.

14 Structure of the Offer

It is intended that the Offer shall be effected by means of a Court-approved scheme of arrangement between Poundland and Poundland Shareholders under Part 26 of the Companies Act. SEAG reserves the right to elect to implement the Offer by way of a takeover offer (subject to Panel consent).

The purpose of the Scheme is to provide for SEAG to become the holder of the entire issued and to be issued share capital of Poundland not already directly or indirectly owned by it. Under the Scheme, the Poundland Shares will be transferred to SEAG in consideration for which the Poundland Shareholders shall receive cash consideration on the basis set out in paragraph 2 of this Announcement.

To become Effective, the Scheme must be approved by a majority in number of the Poundland Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Poundland Shares voted (in both cases excluding SEAG who will not be permitted to vote at the Court Meeting). In addition, resolutions in relation to certain ancillary matters must be passed at the General Meeting, which requires the approval of holders of Poundland Shares representing at least 75 per cent. of votes cast at the General Meeting either in person or by proxy (including SEAG who will be permitted to vote at the General Meeting).

SEAG is not permitted to vote on the Scheme at the Court Meeting but has undertaken in the Co-operation Agreement to vote in favour of the resolutions proposed at the General Meeting in respect of its entire beneficial holding of Poundland Shares.

The Scheme is also subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document.

Once the necessary approvals from holders of Poundland Shares have been obtained and the other Conditions have been satisfied or (where applicable) waived, the Scheme must be approved by the Court. The Scheme shall then become Effective upon delivery of the Court Order to the Registrar of Companies. Subject to satisfaction of the Conditions, the Scheme is expected to become Effective by mid-September 2016.

Upon the Scheme becoming Effective, it shall be binding on all Poundland Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or the General Meeting.

Further details of the Scheme, including an indicative timetable for its implementation, shall be set out in the Scheme Document.

It is expected that the Scheme Document and the Forms of Proxy accompanying the Scheme Document will be published as soon as practicable and, in any event, (save with the consent of the Panel) within 28 days of this Announcement. The Scheme Document and Forms of Proxy will be made available to all holders of Poundland Shares at no charge to them.

15 Conditions to the Offer

The Offer shall be subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document.

The Scheme will be subject to the following conditions:

The Offer shall lapse if:

provided, however, that the deadlines for the timing of the Court Meeting and the General Meeting and the deadline for the Scheme to become Effective may be extended by agreement between Poundland and SEAG (with the consent of the Panel and the Court, if required).

The Offer is not conditional upon any antitrust approvals being obtained and will close shortly after receiving the requisite approvals at the Court Meeting and the General Meeting, and the Scheme being sanctioned by the Court.

16 De-listing and re-registration

Prior to the Scheme becoming Effective, Poundland shall make an application, which shall be conditional on the Scheme becoming Effective, for the cancellation of the listing of Poundland Shares on the Official List and for the cancellation of trading of the Poundland Shares on the London Stock Exchange's main market for listed securities in each case to take effect from or shortly after the Effective Date. The last day of dealings in Poundland Shares on the Main Market of the London Stock Exchange is expected to be the Business Day immediately prior to the Effective Date and no transfers shall be registered after 6.00p.m. on that date.

On the Effective Date, share certificates in respect of Poundland Shares shall cease to be valid and entitlements to Poundland Shares held within the CREST system shall be cancelled.

It is proposed, as part of the application to Court in connection with the Scheme, to seek an order of the Court pursuant to Section 651 of the Companies Act to re-register Poundland as a private limited company.

17 Dividend

Holders of Poundland Shares whose names are on the register on 9 September 2016 shall be entitled to receive the Agreed Dividend without any reduction in the Offer Price payable under the terms of the Offer. The Agreed Dividend will be paid on 23 September 2016.

If any dividend or other distribution is authorised, declared, made or paid in respect of Poundland Shares on or after the date of this Announcement and prior to closing of the Offer other than the Agreed Dividend, or in excess of the Agreed Dividend, the Offer Price shall be reduced by the amount of such dividend or other distribution or by the excess above the Agreed Dividend.

18 Disclosure of Interests in Poundland

Save in respect of the irrevocable undertakings referred to in paragraph 6 above and as disclosed below, as at the close of business on 12 July 2016 (being the last practicable date prior to the date of this Announcement) neither Steinhoff, SEAG nor any of its directors, nor, so far as Steinhoff is aware, any person acting in concert (within the meaning of the Takeover Code) with it has (i) any interest in or right to subscribe for any relevant securities of Poundland, nor (ii) any short positions in respect of relevant Poundland Shares (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery, nor (iii) borrowed or lent any relevant Poundland Shares (including, for these purposes, any financial collateral arrangements of the kind referred to in Note 4 on Rule 4.6 of the Takeover Code), save for any borrowed shares which had been either on-lent or sold:

'Interests in securities' for these purposes arise, in summary, when a person has long economic exposure, whether absolute or conditional, to changes in the price of securities (and a person who only has a short position in securities is not treated as interested in those securities). In particular, a person will be treated as having an 'interest' by virtue of the ownership, voting rights or control of securities, or by virtue of any agreement to purchase, option in respect of, or derivative referenced to, securities.

19 General

SEAG reserves the right to elect (subject to the consent of the Panel) to implement the acquisition of the Poundland Shares not already directly or indirectly owned by it by way of a takeover offer as an alternative to the Scheme. In such event, the acquisition shall be implemented on substantially the same terms as those which would apply to the Scheme (subject to appropriate amendments, including an acceptance condition set at 75 per cent. of the Poundland Shares or such lesser percentage, being more than 50 per cent., as SEAG may decide).

The Offer shall be made subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document. The bases and sources of certain financial information contained in this Announcement are set out in Appendix II to this Announcement. A summary of the irrevocable undertakings given in relation to the Offer is contained in Appendix III to this Announcement. Certain terms used in this Announcement are defined in Appendix IV to this Announcement.

Investec Bank plc, J.P. Morgan Cazenove and Rothschild have each given and not withdrawn their consent to the publication of this Announcement with the inclusion herein of the references to their names in the form and context in which they appear.

20 Documents available on website

Copies of the following documents shall be made available on Steinhoff's and Poundland's websites at www.steinhoffinternational.com and www.poundlandcorporate.com respectively) until the end of the Offer:

Further Information

Linklaters LLP are providing legal advice to Steinhoff and SEAG. Freshfields Bruckhaus Deringer LLP are providing legal advice to Poundland.

Enquiries

Important Notices

Investec Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the UK. Investec Bank plc is acting exclusively as financial adviser to Steinhoff and SEAG and no one else in connection with the Offer and shall not be responsible to anyone other than Steinhoff and SEAG for providing the protections afforded to clients of Investec Bank plc nor for providing advice in connection with the Offer or any matter referred to herein.

J.P. Morgan Limited, which conducts its UK investment banking business as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised and regulated in the United Kingdom by the Financial Conduct Authority. J.P. Morgan Cazenove is acting as financial adviser exclusively for Poundland and no one else in connection with the matters set out in this Announcement and will not regard any other person as its client in relation to the matters in this Announcement and will not be responsible to anyone other than Poundland for providing the protections afforded to clients of J.P. Morgan Cazenove, nor for providing advice in relation to any matter referred to herein.

N. M. Rothschild & Sons Limited, which is authorised by the Prudential Regulation Authority and regulated by the FCA and the Prudential Regulation Authority in the United Kingdom, is acting exclusively for Poundland and no one else in connection with the Offer and will not be responsible to anyone other than Poundland for providing the protections afforded to its clients or for providing advice in relation to the Offer or any other matters referred to in this Announcement.

Shore Capital Stockbrokers Limited ("Shore Capital") which is authorised and regulated in the United Kingdom by the Financial Conduct Authority is acting as corporate broker to Poundland and no one else in connection with the Offer and other matters described in this Announcement and will not be responsible to anyone other than Poundland for providing the protections afforded to clients of Shore Capital or for providing advice in relation to the Offer and other matters described in this Announcement.

This Announcement is for information purposes only and does not constitute an offer to sell or an invitation to purchase any securities or the solicitation of an offer to buy any securities, pursuant to the Offer or otherwise. The Offer shall be made solely by means of the Scheme Document or any document by which the Offer is made which shall contain the full terms and Conditions of the Offer, including details of how to vote in respect of the acquisition.

This Announcement has been prepared for the purpose of complying with English law and the Takeover Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Poundland shall prepare the Scheme Document to be distributed to holders of Poundland Shares. Poundland, SEAG and Steinhoff urge Poundland Shareholders to read the Scheme Document when it becomes available because it shall contain important information relating to the Offer.

Overseas Shareholders

The release, publication or distribution of this Announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements.

The Offer relates to shares of a UK company and is proposed to be effected by means of a scheme of arrangement under the laws of England and Wales. A transaction effected by means of a scheme of arrangement is not subject to proxy solicitation or tender offer rules under the US Securities Exchange Act of 1934 (the "US Exchange Act"). Accordingly, the Scheme is subject to the disclosure requirements, rules and practices applicable in the United Kingdom to schemes of arrangement, which differ from the requirements of US proxy solicitation or tender offer rules. However, if SEAG were to elect to implement the Offer by means of a takeover offer in the circumstances provided for in this Announcement, such takeover offer shall be made in compliance with all applicable laws and regulations, including Section 14(e) of the US Exchange Act and Regulation 14E thereunder. Such a takeover would be made in the United States by SEAG and no one else. In addition to any such takeover offer, SEAG, certain affiliated companies and the nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in Poundland outside such takeover offer during the period in which such takeover offer would remain open for acceptance. If such purchases or arrangements to purchase were to be made they would be made outside the United States and would comply with applicable law, including the US Exchange Act.

Unless otherwise determined by SEAG or required by the Takeover Code, and permitted by applicable law and regulation, the Offer shall not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the offer by any such use, means, instrumentality or form within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Announcement and all documents relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this Announcement and all documents relating to the Offer (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction.

The availability of the Offer to Poundland Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.

The Offer shall be subject to the applicable requirements of the Takeover Code, the Panel, the London Stock Exchange, the Financial Conduct Authority and the UKLA.

This Announcement does not constitute a prospectus or prospectus equivalent document.

Forward looking statements

This Announcement contains statements about Steinhoff, SEAG and Poundland that are or may be forward looking statements. All statements other than statements of historical facts included in this Announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "projects" or words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Steinhoff's or Poundland's operations and potential synergies resulting from the Offer; and (iii) the effects of government regulation on Steinhoff's or Poundland's business.

Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof. Each of Steinhoff, SEAG and Poundland disclaims any obligation to update any forward looking or other statements contained herein, except as required by applicable law.

No profit forecasts or estimates

No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for Steinhoff or Poundland, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Steinhoff or Poundland, as appropriate.

Disclosure requirements of the Takeover Code

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the Offer Period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th Business Day following the commencement of the Offer Period and, if appropriate, by no later than 3.30 pm (London time) on the 10th Business Day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the Business Day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at http://www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.

Publication on Website and Availability of Hard Copies

A copy of this Announcement shall be made available subject to certain restrictions relating to persons resident in Restricted Jurisdictions on Steinhoff's and Poundland's websites at www.steinhoffinternational.com and http://www.poundlandcorporate.com respectively by no later than 12 noon (London time) on 14 July 2016. For the avoidance of doubt, the content of the websites referred to in this Announcement are not incorporated into and do not form part of this Announcement.

You may request a hard copy of this Announcement by:

You may also request that all future documents, announcements and information to be sent to you in relation to the Offer should be in hard copy form.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

APPENDIX ICONDITIONS AND FURTHER TERMS OF THE OFFER

Part A: Conditions of the Scheme

The Offer is conditional upon the Scheme becoming unconditional and Effective, subject to the Takeover Code, by not later than 30 November 2016 or such later date (if any) as SEAG and Poundland may agree and (if required) the Panel and the Court may allow.

1 The Scheme shall be subject to the following conditions:

1.1

1.2

1.3 the sanction of the Scheme by the Court (with or without modification but subject to any modification being on terms acceptable to Poundland and SEAG) and the delivery of a copy of the Court Order to the Registrar of Companies.

2 In addition, subject as stated in Part B below and to the requirements of the Panel, the Offer shall be conditional upon the following Conditions and, accordingly, the Court Order shall not be delivered to the Registrar of Companies unless such Conditions (as amended if appropriate) have been satisfied or, where relevant, waived:

Certain matters arising as a result of any arrangement, agreement, etc.

and no event having occurred which, under any provision of any arrangement, agreement, licence, permit, franchise, lease or other instrument to which any member of the Wider Poundland Group is a party or by or to which any such member or any of its assets are bound, entitled or subject, would or might result in any of the events or circumstances as are referred to in Conditions (a)(i) to (viii);

Certain events occurring since 27 March 2016

No adverse change, litigation, regulatory enquiry or similar

No discovery of certain matters regarding information, liabilities and environmental issues

Anti-corruption

No criminal property

Part B: Certain further terms of the Offer

1 Subject to the requirements of the Panel, SEAG reserves the right to waive:

(i) any of the Conditions set out in the above Condition 1 for the timing of the Court Meeting and General Meeting. If any such deadline is not met, SEAG shall make an announcement by 8.00 a.m. on the Business Day following such deadline confirming whether it has invoked or waived the relevant Condition or agreed with Poundland to extend the deadline in relation to the relevant Condition; and

(ii) in whole or in part, all or any of the above Conditions 2(a) to (d) (inclusive).

2 If SEAG is required by the Panel to make an offer for Poundland Shares under the provisions of Rule 9 of the Takeover Code, SEAG may make such alterations to any of the above Conditions and terms of the Offer as are necessary to comply with the provisions of that Rule.

3 The Offer shall lapse if:

(a) in so far as the Offer or any matter arising from or relating to the Scheme or Offer constitutes a concentration with a Community dimension within the scope of the Regulation, the European Commission either initiates proceedings under Article 6(1)(c) of the Regulation or makes a referral to a competent authority in the United Kingdom under Article 9(1) of the Regulation and there is then a CMA Phase 2 Reference; or

(b) in so far as the Offer or any matter arising from the Scheme or Offer does not constitute a concentration with a Community dimension within the scope of the Regulation, the Scheme or Offer or any matter arising from or relating to the Offer becomes subject to a CMA Phase 2 Reference,

in each case, before the date of the Court Meeting.

4 Conditions 2(a) to (d) must be fulfilled or waived (if capable of waiver) by SEAG by no later than 11.59 p.m. on the Business Day immediately preceding the date of the Court hearing to sanction the Scheme. Subject to this obligation upon SEAG, SEAG shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or to treat as fulfilled any of Conditions 2(a) to (d) (inclusive) by a date earlier than the latest date for the fulfilment or waiver of that Condition notwithstanding that the other Conditions of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such Conditions may not be capable of fulfilment.

5 The Poundland Shares acquired under the Offer shall be acquired fully paid and free from all liens, equities, charges, encumbrances, options, rights of pre-emption and any other third party rights and interests of any nature and together with all rights now or hereafter attaching or accruing to them, including, without limitation, voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid, or any other return of capital (whether by reduction of share capital or share premium account or otherwise) made, on or after the date of this Announcement, save for the Agreed Dividend.

6 If, after the date of this Announcement but prior to the Effective Date, save for the Agreed Dividend, any dividend or other distribution is declared, paid or made or becomes payable by Poundland, SEAG reserves the right (without prejudice to any right of SEAG, with the consent of the Panel, to invoke Condition 2(b)(ii) above) to reduce the consideration payable under the Offer by the aggregate amount of such dividend or distribution, and accordingly reduce the Offer Price.

If any such dividend or distribution occurs (other than the Agreed Dividend), any reference in this Announcement to the consideration payable or the Offer Price shall be deemed to be a reference to the consideration or Offer Price as so reduced. If such reduction occurs, notwithstanding the terms on which the Poundland Shares are expressed to be acquired by SEAG pursuant to the Offer in Appendix I, the Poundland Shares shall be acquired by or on behalf of SEAG pursuant to the Offer together with all rights now and hereafter attaching to such shares including, without limitation, voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid, or any other return of capital (whether by reduction of share capital or share premium account or otherwise) made, on or after the date of this Announcement, save for the Agreed Dividend and such dividend or distribution in respect of which such reduction has been made, if applicable.

To the extent that such a dividend or distribution has been declared, paid, made or is payable, it shall be (i) transferred pursuant to the Offer on a basis which entitles SEAG to receive the dividend or distribution and to retain it; or (ii) cancelled, and the consideration payable and the Offer Price shall not be subject to change in accordance with this paragraph.

Any exercise by SEAG of its rights referred to in this paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the Offer.

7 SEAG reserves the right to elect (with the consent of the Panel) to implement the Offer by way of a takeover offer as it may determine in its absolute discretion. In such event, the acquisition shall be implemented on substantially the same terms, so far as applicable, as those which would apply to the Scheme, subject to appropriate amendments, including (without limitation) an acceptance condition set at 75 per cent. (or such lesser percentage, being more than 50 per cent., as SEAG may decide) of the Poundland Shares.

8 The availability of the Offer to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements.

9 The Offer is not being made, directly or indirectly, in, into or from, or by use of the mails of, or by any means of instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of, any jurisdiction where to do so would violate the laws of that jurisdiction.

10 The Offer is governed by the law of England and Wales and is subject to the jurisdiction of the English courts and to the Conditions and further terms set out in this Appendix I and to be set out in the Scheme Document. The Offer shall be subject to the applicable requirements of the Takeover Code, the Panel, the London Stock Exchange, the Financial Conduct Authority and the UKLA.

11 Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition.

APPENDIX IISOURCES OF INFORMATION AND BASES OF CALCULATION

(i) The Cash Value of the Offer of approximately £597 million is based on 268,911,781 fully diluted Poundland Shares consisting of:

(a) 268,701,797 Poundland Shares in issue on 12 July 2016, being the last dealing day prior to the date of this Announcement; and

(b) 209,984 Poundland Shares in respect of awards which may vest as a result of the Offer.

(ii) The Closing Prices on 13 June 2016 and 12 July 2016 are taken from the Daily Official List.

(iii) Unless otherwise stated, the financial information relating to Poundland is extracted from the audited consolidated financial statements of Poundland for the financial year to 27 March 2016, prepared in accordance with IFRS.

(iv) Unless otherwise stated, the financial information relating to Steinhoff is extracted from the Quarterly Statement of Steinhoff for the nine months ended 31 March 2016.

APPENDIX IIIIRREVOCABLE UNDERTAKINGS

Poundland Directors' Irrevocable Undertakings

Steinhoff has received irrevocable undertakings from each of the Poundland Directors to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting, in respect of a total of 14,719,261 Poundland Shares, representing approximately 5.5 per cent. of the share capital of Poundland in issue on 12 July 2016 (being the latest practicable date prior to publication of this Announcement), comprised as follows:

These irrevocable undertakings shall cease to be binding if (i) Steinhoff announces before publication of the Scheme Document that it does not intend to proceed with the Offer and no new, revised or replacement Scheme is announced by Steinhoff in accordance with Rule 2.7 of the Takeover Code, or (ii) the Scheme (or takeover offer, as applicable) does not become Effective or lapses in accordance with its terms, or is withdrawn. These irrevocable undertakings remain binding in the event of a competing offer.

Other Poundland Shareholders

Irrevocable Undertakings

In terms of the irrevocable undertaking given by Canada Life Investments, it agrees not to dispose of, charge, pledge or otherwise encumber or grant any option or other right over or otherwise deal in any of the Poundland Shares beneficially owned by it, except pursuant to the Offer.

In the event that a third party announces a proposal pursuant to Rule 2.7 of the Takeover Code to acquire the entire issued and to be issued share capital of Poundland, and such proposal provides for consideration of no less than 120 per cent. of the value of the Offer Price, and Steinhoff have not announced a higher offer on or before seven days after the date of announcement of the higher competing offer, then all of the obligations of Canada Life Investments under its irrevocable undertaking shall immediately lapse.

In addition, SEAG has undertaken in the Co-operation Agreement to vote in favour of the resolutions proposed at the General Meeting in respect of its entire beneficial holding of Poundland Shares. SEAG is not permitted to vote on the Scheme at the Court Meeting.

APPENDIX IVDEFINITIONS

The following definitions apply throughout this Announcement unless the context requires otherwise:

For the purposes of this Announcement, "subsidiary", "subsidiary undertaking", "undertaking" and "associated undertaking" have the respective meanings given thereto by the Companies Act.

All references to "pounds", "pounds Sterling", "Sterling", "£", "pence", "penny" and "p" are to the lawful currency of the United Kingdom.

All references to "Euros", "EUR" and "€" are to the lawful currency of the member states of the European Union that adopt a single currency in accordance with the Treaty establishing the European Community as amended by the Treaty on the European Union.

All the times referred to in this Announcement are London times unless otherwise stated.

References to the singular include the plural and vice versa.