Fountainhead Property Trust v Fountainhead Property Trust Breeze Court Investments 33 (Pty) Ltd and Another (76/LM/Nov10) [2011] ZACT 8 (22 February 2011)
The Tribunal found that there is no horizontal overlap or vertical relationship between the merging parties, as Fountainhead does not own A-grade office space in the relevant geographic area. The transaction will not result in a substantial prevention or lessening of competition. No public interest concerns were...
Source-derived case information.
- Citation
- [2011] ZACT 8
- Parties
- Applicant: Fountainhead Property Trust; Respondent: All Top Properties (Pty) Ltd; Respondent: Breeze Court Investments 33 (Pty) Ltd
- Court
- Competition Tribunal
- Jurisdiction
- South Africa
- Case Number
- 76/LM/Nov10
- Procedural Posture
- Merger Application / Approval
- Outcome
- Merger approved unconditionally.
- Judges
- Norman Manoim, Yasmin Carrim, Medi Mokuena
- Legal Topics
- Merger Control, Substantial Prevention or Lessening of Competition, Public Interest, Horizontal Analysis, Vertical Analysis
Source-derived case record
Summary, issues, holding and outcome
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Parties
Fountainhead Property Trust
Applicant
All Top Properties (Pty) Ltd
Respondent
Breeze Court Investments 33 (Pty) Ltd
Respondent
Procedural Posture
Merger Application / Approval
Legal Issues
- 1 Whether the proposed merger will substantially prevent or lessen competition in the relevant market.
- 2 Whether there are any public interest concerns arising from the transaction.
Ratio Decidendi
The Tribunal found that there is no horizontal overlap or vertical relationship between the merging parties, as Fountainhead does not own A-grade office space in the relevant geographic area. The transaction will not result in a substantial prevention or lessening of competition. No public interest concerns were identified. Therefore, the merger was approved unconditionally.
Court Disposition
Merger approved unconditionally.
Orders
- The proposed transaction is approved unconditionally.
Full Case Text
Judgment text and source record
34 paragraphs
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 76/LM/Nov10
In the matter between:
Fountainhead Property Trust ….........................................................................Acquiring Firm
And
Fountainhead Property Trust
Breeze Court Investments 33 (Pty) Ltd
In respect of property letting enterprise known as Lefika …................................Target Firm
Panel : Norman Manoim (Presiding Member),
Yasmin Carrim (Tribunal Member) and Medi Mokuena (Tribunal Member)
Heard on : 16/02/2011
Order issued on : 16/02/2011
Reasons issued on : 22/02/2011
Reasons for Decision
Approval
On 16 February 2011 the Tribunal unconditionally approved the merger between Fountainhead Property Trust (“Fountainhead”) and All Top Properties (Pty) Ltd (“All Top”) and Breeze Court Investments 33 (Pty) Ltd (“Breeze Court”). The reasons follow below.
The Transaction
In terms of the proposed transaction, Fountainhead which is a publicly listed property trust managed by Fountainhead Property Management Limited and which is jointly controlled by Standard Bank Properties and Liberty Group, is acquiring the property letting enterprise known as Lefika House which is co-owned by All Top (60%) and Breeze Court (40%).
All Top and Breeze Court are both property owning companies which invest in and develop immovable properties for the purpose of earning rental income. They co-own the Lefika House property which is an A-grade office space located in Brooklyn/Nieuw Muckleneuk, Pretoria. Lefika House is currently occupied by the Auditor General in terms of a lease agreement which expires in 2019.
Post merger, Fountainhead will have sole control over Lefika House.
The Rationale
For Fountainhead the proposed transaction is in line with its growth strategy and both All Top and Breeze Court agreed to take the offer from Fountainhead in order to realise their investment in respect to the Lefika property.
Competition Analysis
Horizontal and Vertical Analysis
There is no horizontal overlap or vertical relationship between the parties as Fountainhead currently does not have A-grade office space in Brooklyn/Nieuw Muckleneuk where the target property is based.
CONCLUSION
[7] Consequently the proposed transaction is unlikely to lead to a substantial prevention or lessening of competition .There are no public interest concerns. Accordingly the proposed transaction is approved unconditionally.
____________________ 22/02/2011
N Manoim Date
Y Carrim and M Mokuena concurring
Tribunal Researcher: Londiwe Senona
For the merging parties: Vani Chetty Competition law
For the Commission: Lerato Monareng
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