COMPETITION TRIBUNAL OF SOUTH AFRICA
Case NO: 27/LM/Mar08
In the matter between
Pangbourne Properties Ltd (Pty) Ltd Primary Acquiring firm
And
iFour Properties Ltd Primary Target Firm
Panel : D Lewis (Tribunal Member); Y Carrim (Tribunal Member) and N
Manoim (Tribunal Member)
Heard on : 07 May 2008
Decided on : 07 May 2008
Reasons Issued : 21 May 2008
Reasons for Decision
Approval
[1] On 07 May 2008 the Competition Tribunal issued a Merger Clearance Certificate
approving the merger between Pangbourne Properties Ltd and iFour Properties Ltd
unconditionally. The reasons for the approval appear below.
Parties
[2] The primary acquiring firm is Pangbourne Properties Ltd (“Pangbourne”), a listed
company incorporated in terms of the company laws of the Republic of South Africa.
Pangbourne is not controlled by a single shareholder. 1
[3] The primary target firm is iFour Properties Ltd (“iFour”), a company incorporated
under the company laws of the Republic of South Africa. iFour is indirectly controlled by
1 Pangbourne’s major shareholders are Stanlib Investment Solutions (16.09%), Standard Bank of
South Africa (Pty) Ltd (5.38%), Panya Investments (Pty) Ltd (7.99%), Old Mutual Life Assurance
Company (South Africa) Ltd (5.94%), Broker (Pty) Ltd (RMB) (6.41%) and Resilient Property Income
Fund Ltd (9.54%).
1
Pangbourne (the primary acquiring firm in the instant transaction), with 35.3%
shareholding.2
Transaction
[4] In terms of the structure of the transaction, Pangbourne intends to increase its
shareholding in iFour 3 from 41.45% to 100%. On completion of the transaction, iFour will be
wholly controlled by Pangbourne.
Rationale
[5] Pangbourne submits that as a result of the prevailing market conditions and investor
preferences, it has decided to consolidate its property portfolio in order to create a larger
portfolio, extract costsavings and synergies and maximise funding efficiencies.
[6] The transaction represents an opportunity for iFour’s unitholders to be part of a much
larger property fund with more diversification, less risk exposure and a greater potential for
future growth.
Parties’ Activities
[7] Pangbourne and iFour are property loan stock companies listed on the JSE Ltd
under the “FinancialReal Estate” category. Both firms own a property portfolio which
consists of industrial properties, office properties and retail properties throughout South
Africa.
Competition Analysis
[10] The transaction results in an overlap between the activities of the merging parties in
respect of office, retail and industrial properties. However, this overlap will not lead to a
substantial lessening or prevention of competition as the transaction represents a move by
Pangbourne from joint control in iFour to sole control.
Public interest
[12] The transaction does not give rise to any public interest issues and is approved
without conditions.
2 iFour’s other major unitholders include Broker (Pty) Ltd RMB (17.72%), Securities Lending/BOE
Online Share Trading (6.67%) and ABSA Commercial Property Finance (Pty) Ltd (5.48%).
3 Pangbourne acquired joint control in iFour in 2003.
2
_______________ 21 May 2008
D Lewis Date
Tribunal Member
Concurring: Y Carrim and N Manoim
Tribunal Researcher : I Selaledi
For the merging parties : Vani Chetty Competition Law (Pty) Ltd
For the Commission : Makgale Mohlala and Thaba Mavhase
3