COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No:79/LM/Dec10
In the matter between:
Redfine Properties Limited Acquiring Firm
And
Bakford Properties (Pty) Ltd and Target Firm
Fedhurst Properties (Pty) Ltd
Panel : Norman Manoim (Presiding Member),
Andreas Wessels (Tribunal Member)
and Medi Mokuena (Tribunal Member)
Heard on : 08 February 2011
Order issued on : 08 February 2011
Reasons issued on : 10 February 2011
Reasons for Decision
Approval
1] On 8 February 2011 the Competition Tribunal (“Tribunal”) approved the
acquisition by Redfine Properties Limited of Bakford Properties (Pty)
Ltd and Fedhurst Properties (Pty) Ltd in respect of the property letting
enterprises known as Commerce Square and Esher Place. The
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reasons for approval follow below
The Transaction
2] The primary acquiring firm is Redefine Properties Ltd (“Redefine”).
Redefine is part of the Redefine Group, which is a property investment
company with diversified property holdings. Redefine is listed on the
Johannesburg Stock Exchange in the financial services sector and is
not controlled by any single shareholder.
3] The target firms are Bakford Properties (Pty) Ltd and Fedhurst
Properties (Pty) Ltd in respect of the property letting enterprises known
as Commerce Square and Esher Place. The target firms form part of
the Bakos Group whose five major shareholders are; Fiveways Ltd,
Dennis Bakos Trust, Sheldon Dennis Bakos, Tyrone P Bakos, Bernard
Victor Bakos.
4] The acquisition includes the lease agreements of the properties
Commerce Square and Esher Place, both properties are A-grade
rentable office space and are situated in the Sandton and environs
node.
The Rationale
5] Redefine Group’s rationale for purchasing Commerce Square and
Esher Place is that both properties are suited to Redefine’s current
property portfolio and as such are attractive additions to their existing
property portfolio.
6] The Bakos Group’s rationale for the proposed transaction is to obtain
equity in order to enable it to pursue other property investment
opportunities.
The parties and their activities
7] Both firms are involved in the property investment market.
The relevant market and the impact on competition
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8] There is an overlap in the activities of the parties with regard to
investment in A-grade office space. Given the nature of the market we
have opted for a narrow market definition, looking at the market for A-
grade office space in the Sandton and environs node.
9] The combined market share of the merged entity for A-grade office
space in Sandton and environs is a low 4,48% and even in this
narrowly defined market the merged entity will face competition from a
number of effective competitors, including but not limited to;
Growthpoint, Liberty, Standard Bank Properties and Investec
Properties.
10]In light of the above, we find that the transaction would not substantially
prevent or lessen competition the relevant markets.
CONCLUSION
11]There are no significant public interest issues and we accordingly
approve the transaction.
____________________ 10 February 2011
Norman Manoim DATE
Andreas Wessels and Medi Mokuena concurring.
Tribunal Researcher: Thandi Lamprecht
For the merging parties: Vani Chetty Competition Law
For the Commission: Mogalane Matsimela
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