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[2013] ZACT 104
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Resilient Properties (Pty) Ltd v Arbour Town (Pty) Ltd (017772) [2013] ZACT 104 (29 October 2013)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No.: 017772
In
the matter between:
Resilient
Properties (Pty) Ltd Primary Acquiring Firm
and
Arbour
Town (Pty) Ltd Primary Target Firm
Panel
Norman
Manoim (Presiding Member)
Yasmin
Carrim (Tribunal Member)
Andreas
Wessels (Tribunal Member)
Heard
on
01
October 2013
Order
issued on
01
October 2013
Reasons
issued
29
October 2013
DECISION
Unconditional
approval
[1] On
01 October 2013, the Competition Tribunal (“Tribunal”)
unconditionally approved the proposed acquisition by Resilient
Properties (Pty) Ltd of Arbour Town (Pty) Ltd.
[2]
The reasons for approving the proposed transaction follow.
Parties
to transaction
[3]
The primary acquiring firm is Resilient Properties (Pty) Ltd
(“Resilient”). Resilient is controlled by the Resilient
Property Income Fund, a listed property loan stock company which owns
29 properties in 8 provinces, except the Western Cape.
[4]
The primary target firm is Arbour Town (Pty) Ltd (“Arbour
Town”). Arbour Town is controlled by Louis Peens, who
holds a
53% shareholding (32% thereof is directly controlled whilst the
remaining 21% interest is held indirectly through Marketcorp
Holdings). The remaining shares are held by Julie Peens, Anke
Beauregard, Roy Parbhoo, Silke Peens and Resilient. Resilient
currently
holds a 10% interest in Arbour Town.
[5]
The only business which Arbour Town conducts relates to its
investment in two retail properties located in Amanzimtoti, Kwa-Zuiu
Natal, namely Arbour Crossing and Galleria Shopping Centre.
[6]
Arbour Crossing is classified as a lifestyle shopping centre, whilst
Galleria Shopping Centre is classified as a regional shopping
centre.
[7]
Of relevance to this transaction is that Resilient currently owns a
10% interest in Arbour Town, as well two other centres in
the
Kwa-Zulu Natal region. One of these other two centres is a regional
centre located in Richards Bay and the other is a community
shopping
centre located in Ladysmith.
Proposed
transaction and rationale
[8]
In terms of the proposed transaction, Resilient will acquire the
remaining 90% interest in Arbour Town which it does not already
own.
Post-implementation of the proposed transaction, Resilient will have
sole control over Arbour Town. During the course of the
merger
hearing, it was indicated that Arbour Town will be dissolved,
resulting in Resilient holding a direct interest in the two
retail
properties.
1
[9]
Resilient submitted that the proposed transaction is aligned with its
strategy of investing in retail properties.
[10]
The Sellers are natural persons who view the transaction as an
attractive opportunity to reduce their financial exposure to
a single
business, thereby facilitating the diversification of their business
interests.
Competition
assessment
Overlaps
[11]
The Commission found that the proposed transaction will result in a
product overlap in the market for the provision of rentable
retail
property, more specifically relating to regional shopping centres.
The acquiring firm’s holding company, Resilient
Property Income
Fund, owns the Boardwalk Shopping Centre in Richards Bay, Kwa-Zulu
Natal. The Boardwalk Shopping Centre is also
a regional shopping
centre, however, it is located more than 190 kilometres from the
target property which has the same classification,
being the Galleria
Shopping Centre in Amanzimtoti, Kwa-Zulu Natal. Due to this distance
between the two centres, no geographic
overlap will arise from this
transaction.
Conclusion
[12]
We conclude that the proposed transaction is unlikely to
substantially prevent or lessen competition in any relevant market.
Public
interest
[13]
The merging parties confirmed that the proposed transaction will not
have any adverse impact on employment and that no retrenchments
will
result from the proposed transaction.
2
No other public interest issues arise as a result of this
transaction.
CONCLUSION
[14]
Having regard to the facts above, we find that the proposed
transaction is unlikely to substantially prevent or lessen
competition
in any relevant market. Furthermore, no public interest
concerns arise as a result of the proposed transaction. Accordingly,
we
approve the proposed merger unconditionally.
NORMAN
MANOIM
29
October 2013
DATE
Yasmin
Carrim and Andreas Wessels concurring
Tribunal
Researcher: Nicola IIgner
For
the Commission: Gilberto Biacuana
For
the merging parties: Susan Meyer of Cliffe Dekker Hofmeyr Inc.
1
See
page 3 of the transcript.
2
See
pages 40 and 51 of the merger record.