COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 50/LM/Jun06
In the matter between:
Attfund Limited Acquiring Firm
And
CapeGate Regional (Pty) Ltd
CapeGate Lifestyle (Pty) Ltd
CapeGate Wholesale (Pty) Ltd
Boness Development Phase 3 (Pty) Ltd Target Firms
Panel : D Lewis (Presiding Member), N Manoim (Tribunal
Member) and U Bhoola (Tribunal Member)
Heard on : 12 July 2006
Decided on : 13 July 2006
Reasons for Decision
APPROVAL
1] On 13 July 2006, the Tribunal approved the merger between Attfund Limited
and CapeGate Regional (Pty) Ltd and others. The reasons for approval follow.
THE TRANSACTION
2] The acquiring firm is Attfund Ltd, a property investment vehicle for three
property development companies, viz. Atterbury Properties, Parkdev and
Gryphon, which form part of the Attfund group. 1 The target firms are CapeGate
Wholesale (Pty) Ltd, CapeGate Lifestyle (Pty) Ltd and a joint venture consisting
1 Attfund’s major shareholders are Village Trust (20.62%), Mergon Trust (18.50%), BNF Trust
(10.88%), Interactive Trading (9.96%), Y3K Investments (9.05%) and others (30.99%).
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of CapeGate Regional (Pty) Ltd (60%) and Boness Development Phase 3 (Pty)
Ltd (40%).
3] In terms of the proposed transaction, Attfund will purchase the assets, meaning
the properties and business, of the target firms (all being rental enterprises).
According to the parties, the merger will improve the quality of Attfund’s
property portfolio and will also strengthen its foothold in the Western cape.
IMPACT ON COMPETITION
4] Attfund’s current property portfolio consists of retail, industrial and office
property, primarily in Gauteng and the Western Cape. The target firms’
properties are retail properties and are situated in Brackenfell in the Cape
Peninsula, Western Cape Province.
5] Attfund has two retail properties in the Western Cape neither of which is
situated in the Cape Peninsula. The first is situated in George the Garden
Route Mall; the second in Somerset West Somerset Value Mart. Since the
property situated in George is some 435km from the CapeGate properties, it
does not raise any concerns.
6] With regard to Attfund’s Somerset West property, the parties argued during the
hearing that the Somerset Value Mart is a value mart and therefore does not
compete with or constrain the CapeGate properties, which they submit are
primarily regional shopping centres. Since these properties are geographically
situated 4050km apart, we do not need to make a definitive finding on the
relevant product market, as we are satisfied that it is not likely that they
compete based on geographic location. However, even if we had to define a
broad market for retail property in the western cape, we are satisfied that the
acquisition does not raise any concerns.
7] The change in market share of the broader Western Cape market is
nevertheless reflected in the table below:
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CONCLUSION
8] There are no public interest issues and we accordingly approve this transaction
without conditions.
____________________
N Manoim
D Lewis and U Bhoola concurring.
Tribunal Researcher: M MuruganModise
For the merging parties: Advocate A Coetzee instructed by Roestoff Venter &
Kruse Attorneys
For the Commission : HB Senekal (Mergers and Acquisitions)
Gross Letting
Area % Market share
Total GLA for commercial retail property in the
Western Cape 1 244 893 m 2 100 %
Attfund Garden Route Mall (George) 53 135 m 2 5.28 %
12 566 m 2
Cape Gate 88 500 m 2 7.11 %
Post merger 154 201 m 2 12.39 %
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