COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 28/LM/Jun10
In the matter between:
Newpark Towers (Pty) Ltd Acquiring Firm
And
Ferox Investments (Pty) Ltd Target Firm
Panel : Norman Manoim (Presiding Member),
Yasmin Carrim (Tribunal Member), and
Andreas Wessels (Tribunal Member)
Heard on : 21 July 2010
Order issued on : 21 July 2010
Reasons issued on : 24 August 2010
Reasons for Decision
APPROVAL
1] On 21 July 2010 the Competition Tribunal (“Tribunal”) unconditionally approved the
acquisition between Newpark Towers (Pty) Ltd and Ferox Investments (Pty) Ltd.
The reasons for approval follow below.
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THE PARTIES TO THE TRANSACTION
2] The primary acquiring firm is Newpark Towers (Pty) Ltd (“Newpark Towers”).
Newpark Towers is controlled by FHP Managers (Pty) Ltd 1, Renlia Developments
(Pty) Ltd, Ellerine Bros (Pty) Ltd, B D Van Wyk and Ellawain Investments (Pty) Ltd.
Newpark does not control any firm.
3] The primary target firm is Ferox Investments (Pty) Ltd (“Ferox”), in respect of the
property letting enterprise known as “24 Central”. Ferox is solely controlled by HBW
Group (Pty) Ltd. Ferox does not control any firm.
DESCRIPTION OF THE TRANSACTION
4] In terms of the sale of shares agreement entered into by the merging parties,
Newpark Towers is acquiring from Ferox, the property letting enterprise known as 24
Central. On completion of the proposed transaction, Newpark Towers will have sole
control over 24 Central.
ACTIVITIES OF THE MERGING PARTIES
5] Newpark is a property investment company specialising in the rental of office space.
Newpark has one asset, namely the JSE building, located in Sandown,
Johannesburg. The JSE building comprises specialised P-grade office space. The
broader acquiring group has properties in A-grade and B-grade rentable office space
as well as properties in the rentable retail space.
6] 24 Central comprises of two separate portions, i.e. rentable A-grade office space
and rentable specialist retail space. The retail portion of 24 Central comprises
restaurants which include “the Baron”, “News Cafe Sandton”, “Allora Sandton”, “Koi
Restaurant”, “the Gourmet Garage Sandton”, “Vida e Caffe” as well as a night club
called “Taboo”.
1 FHP Managers (Pty) Ltd is a wholly owned subsidiary of Standard Bank.
RATIONALE FOR THE TRANSACTION
7] Newpark Towers has submitted that this is an opportunistic acquisition which
satisfies its long-term intention of acquiring and holding property. Ferox’s rationale is
that it wishes to improve its group loan-to-value ratios and that this transaction will
provide it with additional capital.
COMPETITION ANALYSIS
8] There is an overlap in the activities of the merging parties in respect of the market
for rentable A-grade office space in the Sandton node, Johannesburg. The merging
parties’ combined post merger share in respect of this property is approximately 4%.
The merging parties compete with numerous firms in the property market such as
Acucap, Growthpoint, Pangbourne, Sycom, SA Corporate, Redefine and many
others.
CONCLUSION
[9] The proposed transaction is unlikely to substantially prevent or lessen competition in
the market for rentable A grade office space in the Sandton node as the merging
parties’ post merger market shares are low. In addition, there are no public interest
issues arising from the transaction.
____________________ 24 August 2010
Norman Manoim Date
Yasmin Carrim and Andreas Wessels concurring.
Tribunal Researcher: Ipeleng Selaledi
For the merging parties: Vani Chetty Competition Law (Pty) Ltd
For the Commission: Alex Constantinou
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