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[2014] ZACT 71
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Actis 4 PCC (Big Foot Cell) v Tekkie Town (Proprietary) Limited (019497) [2014] ZACT 71 (31 October 2014)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No: 019497
In the matter
between:
ACTIS 4 PCC (BIG
FOOT
CELL)
.....................................................................
Primary
Acquiring Firm
And
TEKKIE TOWN
(PROPRIETARY)
LIMITED
.....................................................
Primary
Target Firm
Panel : Yasmin
Carrim (Presiding Member)
: Andreas Wessels
(Tribunal Member)
: Prof Fiona
Tregenna (Tribunal Member)
Heard on : 22
October 2014
Order Issued on: 22
October 2014
Reasons Issued on :
31 October 2014
Reasons for
Decision
Approval
[1] On 22 October
2014, the Competition Tribunal unconditionally approved the
acquisition by Actis 4 PCC (Big Foot Cell) (“
Actis 4 PCC
”)
of a 42.5% interest in Tekkie Town (Pty) Ltd (“
Tekkie
Town"
).
[2] The reasons for
approving the proposed transaction follow.
Parties to
transaction
Primary acquiring
firm
[3] The primary
acquiring firm is Actis 4 PCC, a ‘special purpose vehicle
company’ incorporated under the laws of Mauritius.
Actis 4 PCC
was established specifically for the purposes of the proposed
transaction and does not provide any services or products.
[4]
Actis 4 PCC is controlled by Actis Africa 4 LP and Actis Global 4 LP,
which are private equity investment funds managed by Actis
GP LLP.
Actis LLP controls Actis GP LLP. Actis LLP is a limited liability
partnership of individuals, none of whom hold a controlling
interest
in Actis LLP for competition purposes. These entities will
hereinafter be referred to collectively as
“
the
Actis Group”.
[5]
The Actis Group is a global private equity investor. It directly or
indirectly controls a number of firms that have operations
in South
Africa.
1
Primary target
firm
[6]
The primary target firm is Tekkie Town, a private company registered
in South Africa. Tekkie Town is controlled by The Sports
City Trust.
The Sports City Trust is jointly controlled by the following
trustees: (i) Braam van Huyssteen; (ii) Bernard Eugene
Mostert; and
(iii) Daniel Jacobus Pretorius, The Sports City Trust holds 90% of
the issued share capital of Tekkie Town. The remaining
10% of the
issued share capital consists of a non-controlling stake held by The
Tekkie Town Trust.
2
The Tekkie Town Trust has two trustees namely: (i) Abraham Vlok van
der Bergh; and (ii) Marius Roelof van Huyssteen.
[7]
Tekkie Town is a sports and lifestyle shoe chain that has over 250
stores located throughout South Africa, It sells
inter
alia
leisure,
school, fashion and sports footwear.
Proposed
transaction and rationale
[8]
In terms of a
Subscription
Agreement
concluded
between Actis
4
PCC,
Tekkie Town and Bursacore (Pty) Ltd
(“Bursacore”),
3
Actis
4
PCC
will subscribe for
42.5%
of
the issued share capital of Tekkie Town. The Sports City Trust’s
shareholding will be diluted to
51.75%
4
and
The Tekkie Town Trust’s shareholding will be diluted to
5.75%.
Actis
4
PCC
will have joint control over Tekkie Town post merger.
[9] The Actis Group
submitted that the transaction presents an attractive private equity
opportunity to invest in the emerging retail
sector in South Africa.
Tekkie Town submitted that the transaction will limit its business
risk by it becoming less reliant on
one significant shareholder.
Impact on
competition
[10] An assessment
of the merging parties’ activities found that there are no
product/service overlaps between the activities
of the merging
parties since the Actis Group is not involved in any business
activities that are similar or related to that of
Tekkie Town. There
is also no vertical relationship between the merging parties.
Public interest
[11] The proposed
merger raises no public interest concerns. More specifically, no
employees will be retrenched as a result of the
proposed merger.
Conclusion
[12] In light of the
above we conclude that the proposed transaction is unlikely to
substantially prevent or lessen competition
in any relevant market.
In addition, no public interest issues arise from the proposed
transactions. Accordingly we approve the
proposed transaction
unconditionally.
31 October 2014
DATE
Andreas Wessels
Yasmin Carrim and
Fiona Tregenna concurring
Tribunal Researcher:
Derrick Bowles
For the merging
parties: Shawn van der Meulen of Webber Wentzel
For the Commission:
Daniela Bove and Grace Mohamed
1
See
Merger Record, pages 13, 14 and 34.
2
The
reasons for approving the proposed transaction follow.
3
A
special purpose vehicle company that was established specifically for
the purpose of professionalising the different commercial
entities of
The Sports City Trust.
4
Currently
held through Bursacore.