About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Competition Tribunal
SAFLII
>>
Databases
>>
South Africa: Competition Tribunal
>>
2014
>>
[2014] ZACT 69
|
|
Ellerine Bros (Pty) Ltd and Another v FHP Managers (Pty) Ltd (019430) [2014] ZACT 69 (31 October 2014)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No: 019430
In the matter
between:
ELLERINE BROS.
(PTY) LTD
and
ELLWAIN
INVESTMENTS (PTY)
LTD
..........................................................
Primary
Acquiring Firms
And
FHP MANAGERS
(PTY) LTD
in respect of its
25% interest in
NEWPARK
TOWERS (PTY)
LTD
...........................................................................
Primary
Target Firm
Panel: Yasmin Carrim
(Presiding Member)
: Anton Roskam
(Tribunal Member)
: Andiswa Ndoni
(Tribunal Member)
Heard on: 15 October
2014
Order Issued on: 15
October 2014
Reasons Issued on:
31 Octobér 2014
Reasons for
Decision
Approval
[1] On 15 October
2014, the Competition Tribunal unconditionally approved the
acquisition by Ellerine Bros. (Pty) Ltd and Ellwain
Investments (Pty)
Ltd of FHP Managers (Pty) Ltd.’s 25 % Interest in Newpark
Towers (Pty) Ltd.
[2] The reasons for
approving the proposed transaction follow.
Parties to
transaction
Primary
acquiring firm
[3]
The primary acquiring firms are Ellerine Bros. (Pty) Ltd
(“Ellerine
Bros”)
and
Ellwain Investments (Pty) Ltd
(“Ellwain”)
(collectively
referred to as the
“
Acquiring
Firms”).
The
Acquiring firms are investment companies with property portfolios
comprising of Retail and Office space in Gauteng. Ellerine
Bros is
jointly controlled by the Eric Ellerine Trust and the Sidney Ellerine
Trust. Ellwain is jointly controlled by the following
firms:
•
Oxiana
Limited (“
Oxiana
”);
•
Argon
Holdings Limited (“
Argon
Holdings
”);
•
Eric
Ellerine Family Trust;
•
Sidney
Ellerine Family Trust; and
•
Drawood
Trust.
Oxiana,
Argon Holdings and Drawood Trust do not own any firms in South
Africa. Ellerine Bros and Ellwain jointly control Newpark
Towers
(Pty) Ltd
(“Newpark”)
together
with FHP Managers (Pty) Ltd, Mr B D Van Wyk and Renlia Developments
(Pty) Ltd.
Primary target
firm
[4] The primary
target firm is FHP Managers, in respect of its 25% interest in
Newpark. Newpark is a property investment company
that currently owns
two office properties, classified as Grade A and B, situated in the
Sandton and Johannesburg CBDs, as well
as a specialist entertainment
centre located in the Sandton CBD. FHP Managers is 100% controlled by
the Standard Bank Group Limited.
FHP Managers and Newpark do not
control any other firms.
Proposed
Transaction and Rationale
[5] The Acquiring
Firms each own 23.86% of the shares and claims in Newpark. In terms
of the Sale of Shares Agreement, the Acquiring
Firms shall each
acquire 12.5% of the shares and claims in Newpark from FHP Managers.
Following the implementation of the proposed
transaction, the
Acquiring Firms will each hold 36.36% in Newpark.
[6] The Acquiring
Firms submit, as a rationale for the transaction, that they seek to
enhance their respective property portfolios.
Relevant Market
and Impact on Competition
[7] An assessment of
the merging parties’ activities found that the proposed
transaction results in a horizontal overlap in
respect of Grade A
office properties and retail properties. With respect to Grade A
office property, the merging parties will have
a combined post-merger
market share of between 1.5% and 3.5% in the Sandton and Environs
node with an accretion of between 0.5%
and 2%. The merged entity will
still face competition from other large property groups such as
Growthpoint, Annuity, Investec,
Redefine as well as many other
players in the market. Furthermore, there is a considerable amount of
vacant Grade A office space
in this node. The Tribunal further
accepts that nothing will change in this market as the Acquiring
Firms already have a pre-merger
shareholding in Newpark, and through
this transaction, are merely seeking to increase their respective
shareholding in this regard.
[8] With respect to
retail property, we find that there is no overlap between the retail
properties owned by the merging parties
outside of Newpark, as none
of the Acquiring Firm’s retail properties are classified as
speciality entertainment centres.
Therefore the proposed transaction
is unlikely to change the market structure of the market for the
provision of speciality entertainment
centres.
Conclusion
[11] In light of the
above we conclude that the proposed transaction is unlikely to
substantially prevent or lessen competition
in the relevant markets.
In addition, no public interest issues arise from the proposed
transactions. Accordingly we approve the
proposed transaction
unconditionally.
31 October 2014
DATE
Ms Yasmin Carrim
Andiswa Ndoni and
Anton Roskam concurring
Tribunal Researcher:
Derrick Bowles
For the merging
parties: Vani Chetty - Baker & McKenzie
For the Commission:
Seema Nunkoo assisted by Xolela Nokele