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[2014] ZACT 48
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Investec Property Fund Ltd v Bethlehem Property Development (Pty) Ltd (018978) [2014] ZACT 48 (13 August 2014)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: 018978
In
the matter between:
INVESTEC
PROPERTY FUND
LTD
Primary Acquiring Firm
And
BETHLEHEM
PROPERTY DEVELOPMENT
(PTY)
LTD
Primary Target Firm
Panel
: Mr N
Manoim (Presiding Member)
:
Dr T Madima (Tribunal Member)
:
Mr A Roskam (Tribunal Member)
Heard
on
:
24 July
2014
Order
Issued on
:
24 July
2014
Reasons
Issued on :
13 August 2014
Reasons
for Decision
Approval
[1]
On 24 July, The Competition Tribunal (“
Tirbunal
”)
unconditionally approved the acquisition by Investec Property Fund
Ltd (“
Investec Fund
”)
to acquire 50% of the issued share capital in Bethlehem Property
Development (Pty) Ltd (“
Bethlem
Property
”)
[2]
The reasons for approving the proposed
transaction follow.
Parties
to the transaction
[3]
The primary acquiring firm is Investec
Fund, a company listed on the Johannesburg Securities Exchange.
Investec Fund is 45% controlled
by Investec Limited and the remaining
shares are held by private individuals. Investec wholly owns Investec
Bank Limited, Investec
Securities Limited, Investec Asset Management
Limited and Investec Property Group Holdings (Pty) (“Investec
Holdings”).
Investec Holdings wholly owns Investec Property
(Pty) Ltd (“Investec Property”), which in turn holds a
50% share in
Bethlehem Property.
[4]
The primary target firm is Bethlehem
Property, a company controlled by Investec Fund, Investec Property
and Betheas Properties (Pty)
Ltd (“Betheas Properties).
Proposed
Transaction
[5]
The Investec Fund intends to acquire the
50% shares held by Investec Property and Betheas Properties in
Bethlehem Property in terms
of a sale of equity agreement.
Post-merger Investec will have increased its shareholding in
Bethlehem Property from 50% to 100%
and it will become the sole
controller.
Rationale
[6]
The Investec Fund is in the process of
growing and enhancing its property portfolio on behalf of its
investors. This is the primary
reason for the Bethlehem Property
acquisition from the vendors. The vendors on the other hand wish to
realise their investment
in Bethlehem Property.
Relevant
Market and Impact on Competition
[7]
The Investec Fund is a property
investment company which carries Real Estate Investment Trust status
on the Johannesburg Securities
Exchange. The Investec Group is an
international specialist bank and asset manager that provides a
diverse range of financial products
and services mainly in the United
Kingdom, South Africa and Australia. Investec Group’s core
focus is asset management, wealth
and investment and specialist
banking.
[8]
Bethlehem Property is a property owning
company, with Dihlabeng Mall a regional shopping centre in Bethlehem
in the Free State being
its only interest.
[9]
The Investec Group also owns another
comparable retail centre in the Free State Province called Fleurdal
Properties. This property
is located in Bloemfontein 284 km away from
Dihlabeng Mall. Given the distance the Commission is of the view that
Fleurdal Properties
does not pose a competitive constraint to
Dihlabeng Mall. For this reason Dihlabeng Mall and Fleurdal are in
different markets
and there is no overlap in the activities of the
parties.
[10]
In addition the Commission noted that
there are several other regional centres that are closer to Dihlabeng
than Fleurdal. These
are owned by competitors of the acquiring firm
and hence more likely to impose constraints on Dihlabeng than
Fleurdal.
[11]
The proposed transaction is unlikely to
raise employment concerns as the acquiring groups interest in
Dihlabeng Mall existed pre-merger.
There will be no effect on small
businesses and there are no exclusivity clauses in the lease
agreement between Betheas Properties
and Shoprite Checkers (Pty) Ltd,
the anchor tenant at Dihlabeng Mall. There are also no significant
barriers to entry.
Conclusion
[12]
In light of the above we conclude that
the proposed transaction is unlikely to substantially prevent or
lessen competition. In addition,
no public interest issues arise from
the proposed transaction. Accordingly we approve the proposed
transaction unconditionally.
13
August 2014
DATE
________________________
Mr
N
Manoim
Dr
T Madima and Mr A Roskam concurring
Tribunal
Researcher:
Moleboheng Moleko
For
the merging parties:
Andile Nikani - Fluxmans Attorneys
For
the Commission:
Hardin Ratshisusu, Seema Nunkoo and Relebohile
Thabane.