Discovery reported on Wednesday that Gore sold R42.7 million worth of his Discovery ordinary shares in two transactions last Friday. Swartzberg sold more than R26 million of Discovery shares on the same day.
The company said the two sold these shares to use the proceeds to service individual funding arrangements entered into to subscribe to various rights offers for Discovery shares over time.
Gore said the sale is not about the co-founders offloading their stakes. What they've sold is less than 1% of what they own.
But because the arrangement was that their participation in the past Discovery rights offers would be funded by dividend flows, they've had to sell some of their shares due to the lack of dividends in 2020.
The Discovery board decided not to declare an ordinary interim dividend for the six months ended on 31 December 2020.
"All the time we don't dilute our shareholding. We've always followed our rights. But you have to continuously fund that. With the lack of dividends, we've sold shares to keep that in place," said Gore.
At the end of 2019, Gore entered into a massive hedging contract, which capped the upside of Discovery’s share price at R160. At the time, he was forced to schedule a teleconference to address market concerns about the contract, as well as about a transaction which saw Herschel Mayers, co-founder of Discovery Life, sell more than R117 million in Discovery shares in one go.
In September last year, Mayers sold another R387 million in Discovery shares over two days.
News of the most recent share sales by Gore and Swartzberg did not keep the Discovery share price from moving up 0.6% to R143.38 by early afternoon on Wednesday.
After falling below R70 at the height of pandemic fears in March last year, Discovery's share price has recovered by 148% in the interim.
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