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Red Pen 2 General Trading (Pty) Ltd and Primedia Ltd (82/LM/Aug07) [2007] ZACT 73 (22 October 2007)
.RTF of original document
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 82/LM/Aug07
In the matter between
Red Pen 2 General Trading (Pty) Ltd
Acquiring Firm
And
Primedia Ltd
Target Firm
Panel
: D Lewis (Presiding Member), N Manoim (Tribunal Member) and Y Carrim (Tribunal Member)
Heard on
: 05 September 2007
Decided on
: 05 September 2007
Reasons Issued
: 22 October 2007
REASONS
Approval
[1]
On 08 August 2007 the Competition Tribunal issued a Merger Clearance Certificate approving the merger between Red Pen 2 General Trading (Pty) Ltd and Primedia Ltd unconditionally. The reasons appear below.
Parties
[2]
The acquiring firm is Red Pen 2 General Trading (Pty) Ltd (“Newco”). Newco is a shelf company, established specifically for the purposes of the proposed transaction.
[3]
The target firm is Primedia Ltd (“Primedia”). Primedia controls a range of radio stations and other media companies. Primedia is controlled by the Mine Workers Investment Company (Pty) Ltd (“MIC”) and the Kirsh Consortuim (“Kirsh
Consortium”) by virtue of a voting pool agreement concluded between them in March 2000.
Rationale for the Transaction
[4]
The transaction involves a buy-out of the Primedia Group, necessitating a restructuring thereof and a
consequential delisting of Primedia from the JSE Limited. Post merger, direct control over Primedia Group will vest in Newco. Newco
in turn will ultimately be controlled by the Kirsh Consortium and MIC by virtue of a shareholders’ agreement.
[5]
The parties have submitted that the proposed transaction will increase broad-based management participation
in Primedia through the acquisition by approximately 55 members of the incumbent Primedia management of an equity stake in Primedia.
The parties further submitted that the transaction will significantly increase Black Economic Empowerment (“BEE”) shareholding
in the restructured Primedia Group, thereby improving the group’s BEE status.
Competition Analysis
[6]
In our view the proposed transaction merely involves a restructuring of ownership interest in Primedia.
The implementation of the transaction will leave the competitive landscape unchanged. In addition, the transaction does not raise
any public interest concerns.
Conclusion
[7]
Based on the above the transaction is accordingly approved unconditionally.
___________________
22 October 2007
Y.Carrim
Date
Tribunal Member
N Manoim and D Lewis concurring
Tribunal Researcher
: J Ngobeni
For the merging parties
: Edward Nathan Sonnenberg
For the Commission
: HB Senekal (Mergers and
Acquisitions)
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