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[2018] ZACT 61
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DiverCity Urban Property Fund (Pty) Ltd v Atterbury Property Fund (Pty) Ltd in respect of theshares and claims in Talis House (Pty) Ltd (LM084Jun18) [2018] ZACT 61 (25 October 2018)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM084Jun18
In
the matter between
DiverCity
Urban Property Fund (Pty)
Ltd
Primary Acquiring Firm
And
Atterbury
Property Fund (Pty) Ltd in respect of
the
Primary Target Firm
shares
and claims in Talis House (Pty) Ltd
Panel
: Y Carrim (Presiding Member)
: A Ndoni (Tribunal
Member)
: M Mokuena
(Tribunal Member)
Heard
on
: 3 October 2018
Order
Issued on : 3 October 2018
Reasons
Issued on : 25 October 2018
REASONS
FOR DECISION
Approval
[1]
On
3 October 2018, the Tribunal unconditionally approved the proposed
transaction in terms of which DiverCity Urban Property Fund
(Pty) Ltd
("DiverCity") is acquiring control over Talis House (Pty)
Ltd ("Talis").
[2]
The
reasons for the approval of the proposed transaction follow.
Parties
to the transaction
[3]
The
acqurnng firm, DiverCity is jointly controlled by Vestfund (Pty) Ltd
("Vestfund"), Atterbury Property Fund (Pty) Ltd
("Atterbury
Property Fund"), Genesis Properties (Pty) Ltd ("Genesis"),
and Propertuity Development (Pty) Ltd
("Propertuity").
DiverCity's shareholders are collectively referred to as the "Seed
Partners".
[4]
DiverCity
is an urban property fund focused on investing and renewing dense
urban precincts on a collaborative basis with its Seed
Partners.
[5]
The
target firm is Talis which is controlled by Atterbury Property Fund,
which is ultimately controlled by Atterbury ManFou (Pty)
Ltd.
[6]
Talis
is a property letting enterprise located in the Johannesburg Central
Business District (JHB CBD). Its assets consi
st
of 15273m2 of rentable Grade A office space.
Proposed
transaction and rationale
[7]
DiverCity
intends to acquire the entire share capital and claims in Talis from
Atterbury Property Fund. Upon implementation of the
proposed
transaction, DiverCity will acquire sole control over Talis House.
[8]
DiverCity
has identified Talis as having property which aligns with its
portfolio and vision for the JHB CBD.
Relevant
market and impact on competition
[9]
The
Competition Commission ("Commission") did not definitively
conclude on the relevant market. However, the Commission
assessed the
competitive effects of the proposed transaction in the broad market
for the provision of rentable Grade A and P office
space within a 5km
radius of the JHB CBD and surrounding areas which include Parktown
and Braamfontein.
[1]
The
Commission found a horizontal overlap which specifically arises
between the office properties owned by DiverCity's seed partners
(Grade P offices) and Talis House (Grade A offices).
[10]
The Commission further found that the merged entity's market share
will be 7.31% with a minimal market
share accretion. Further, the
Commission found that the merged entity will be competitively
constrained by other properties owned
by firms such as Redefine,
Growthpoint and Liberty Properties. In view of the above, the
Commission is of the view that the proposed
transaction is unlikely
to substantially prevention or lessen competition in any relevant
market. We find no reason to disagree
with the Commission.
Public
interest
[11]
The
merging parties confirmed that the proposed transaction will not have
any adverse effects on employment as DiverCity will take
over the
employees currently associated with Talis, including outsourced
services.
[2]
The proposed
transaction raises no other public interest concerns.
Conclusion
[12]
In
light of the above, we concluded 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 transaction. Accordingly, we approved the proposed
transaction unconditionally.
Ms
Yasmin Carrim
Mrs
Medi Mokuena and Ms Andiswa Ndoni concuring.
25
October 2018
Date
Tribunal
Case Manager
: Kgothatso
Kgobe
For
the Merging Parties
: V Chetty of
Vani Chetty Competition Law
For
the Commission
: N Msiza
[1]
The Commission notes that there is no horizontal overlap in the
narrow segments in respect of the office grading.
[2]
See Transcript, page 6.