COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 47/LM/Aug10
In the matter between:
Attfund Retail Limited Acquiring Firm
And
Parkdev (Pty) Ltd; and
The business enterprise know as
Willowbridge South Shopping Centre Target Firms
Panel : Andreas Wessels (Presiding Member)
Merle Holden (Tribunal Member)
Medi Mokuena (Tribunal Member)
Heard on : 29 September 2010
Order issued on : 29 September 2010
Reasons issued on : 12 October 2010
Reasons for Decision
Approval
1] On 29 September 2010, the Competition Tribunal (“Tribunal”) approved
the acquisition by Attfund Retail Limited (“Attfund Retail”) of (i) the
asset management business of Parkdev (Pty) Ltd (“Parkdev”) and (ii)
the business enterprise know as Willowbridge South Shopping Centre
from Siyathenga Properties Two (Pty) Ltd (“Siyathenga”) and Mini-
Cape Property Holdings (Pty) Ltd (“MCP”). The reasons for approval
follow below.
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The parties and their activities
2] The primary acquiring firm is Attfund Retail 1, a newly formed company
and wholly owned subsidiary of Attfund Limited (“Attfund”). Attfund is
currently an unlisted property fund. No single shareholder will control
Attfund Retail; its largest shareholders will be Atterbury Investment
Holding Limited, The Village Trust, Clidet No 683 (Pty) Ltd, De Katwijk
Trust and Y3K Investments (Pty) Ltd. 2 The newly formed Attfund Retail
does not have any directly held subsidiaries.
3] Post merger Attfund Retail, by virtue of an internal restructuring with
Attfund (see paragraph below), will have an investment holding of 12
properties in the retail and office space sectors of the South African
property market. These properties are located in Gauteng and the
Western Cape provinces. Attfund Retail will carry on the business of a
property investment company through the ownership of the transferred
property portfolio from Attfund.
4] The target businesses are (i) Parkdev and (ii) the business enterprise
known as Willowbridge South Shopping Centre, co-owned by
Siyathenga and MCP.
Parkdev
5] Parkdev is not directly or indirectly controlled by any specific firm 3.
Premerger Parkdev provides asset management services exclusively
in respect of Attfund’s property portfolio. Post merger Attfund Retail will
conduct its own asset management functions, as previously conducted
by Parkdev, on an in-house basis (see paragraph below).
Willowbridge South
1 Currently named Femtoworx Limited. It is in the process of having its name changed to
Attfund Retail Limited.
2 See page 4 of the record for details of individual shareholdings.
3 Parkdev’s shares are held by a variety of shareholders of which the five largest
shareholders owning more than 5% of its share capital are: The Village Trust, De Katwijk
Trust, Pereno Investments (Pty) Ltd, MVP Earth Trust and Rameros Investments (Pty) Ltd.
Trust, Pereno Investments (Pty) Ltd, MVP Earth Trust and Rameros Investments (Pty) Ltd.
See pages 5 and 6 of the record for details of individual shareholdings.
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6] The Willowbridge South Shopping Centre is a business categorised as
a minor regional centre, comprising 31,069 m 2 of rentable retail space,
located in Bellville in the Western Cape.
The proposed transaction
7] The proposed transaction consists of three parts, which collectively are
referred to as the merger. They are:
(i) Attfund Retail, as part of an internal restructuring, will acquire
the South African property assets of Attfund;
(ii) Attfund Retail proposes to acquire, as a going concern, the
asset management business from its current asset manager
Parkdev; and
(iii) Attfund Retail intends to acquire, as a going concern, the
business enterprise known as Willowbridge South Shopping
Centre from Siyathenga and MCD.
8] According to the merging parties, the collective transactions will be
implemented simultaneously and are conditional upon one another. 4
Upon completion of the collective transactions, Attfund Retail will have
sole control over Parkdev and the Willowbridge South Shopping
Centre. In addition, through said internal restructuring, Attfund Retail
will own Attfund’s South African property portfolio.
The rationale for the proposed transaction
9] The merging parties are of the opinion that it would be mutually
beneficial to merge their respective assets and conduct their respective
operations through a consolidated and amalgamated investment
vehicle.
The relevant markets and impact on competition
4 This conditionality is confirmed in the relevant concluded sale agreements.
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10]The proposed merger has both vertical and horizontal dimensions,
as explained below:
Horizontal analysis
11]In regard to the proposed acquisition of the Willowbridge South
Shopping Centre, the merging parties’ activities from a horizontal
perspective overlap broadly in respect of retail space in the Western
Cape.
12]Attfund Retail will, after the aforementioned internal restructuring, own
one property in the Goodwood/Parow/Bellville Node, which is known
as Willowbridge North. Willowbridge North is classified as a
community centre. Thus, the activities of the merging parties do not
overlap on a narrow delineation of the relevant product market since
the Willowbridge South Shopping Centre is classified as a minor
regional centre (see paragraph above).
13]If a potential broader delineation of the relevant product/geographic
market is adopted, namely either rentable retail space in the
Goodwood/Parow/Bellville Node, or shopping centres in the Greater
Bellville Node, the merged entity’s relatively low post merger market
share does not raise likely competition concerns.
Vertical assessment
14]The proposed transaction in regard to the Parkdev asset
management business has a vertical element since Parkdev
premerger, manages Attfund’s property portfolio. Parkdev, prior to
the transaction notified herein, administers asset management
services in the upstream market of which the only receiver of such
services in South Africa is Attfund. As stated in respectively
paragraphs and above, Attfund Retail will post merger house the
assets formerly owned by Attfund and will take over the asset
management services previously conducted by Parkdev.
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15]According to the merging parties Parkdev has an estimated market
share of less than 5% in a national market for the provision of asset
management services. Large competitors in this market include
Growthpoint, Old Mutual Group, Redefine and Liberty.
16]Given the relatively small market share of Parkdev in the provision of
asset management services in South Africa as well as by virtue of
said pre-existing exclusive relationship, input or customer foreclosure
is unlikely given that Parkdev premerger was the sole provider of
asset management services to Attfund.
17]In light of the above, we find that the proposed transaction is unlikely
to substantially prevent or lessen competition in any potential relevant
market.
Public interest
18]The merging parties have confirmed that the proposed deal will have
no effect on employment since no employees would be retrenched as
a result thereof. In addition, the proposed transaction raises no other
public interest concerns.
CONCLUSION
19]The proposed transaction does not result in a likely substantial
prevention or lessening of competition in any potential relevant
market. Furthermore, no public interest issues arise from the
proposed deal. We accordingly approve the proposed transaction
unconditionally.
____________________ 12 October 2010
Andreas Wessels DATE
Merle Holden and Medi Mokuena concurring
Tribunal Researcher: Thandi Lamprecht
For the merging parties: Vani Chetty Competition Law
For the Commission: Alex Constantinou
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