Pangbourne Properties Limited and IFour

The judgment

The court's own file

1 COMPETITION TRIBUNAL OF SOUTH AFRICA Case NO: 27/LM/Mar08 In the matter between Pangbourne Properties Ltd (Pty) Ltd Primary Acquiring firm And iFour Properties Ltd Primary Target Firm Panel : D Lewis (Tribunal Member); Y Carrim (Tribunal Member) and N Manoim (Tribunal Member) Heard on : 07 May 2008 Decided on : 07 May 2008 Reasons Issued : 21 May 2008 Reasons for Decision Approval

[1]On 07 May 2008 the Competition Tribunal issued a Merger Clearance Certificate approving the merger between Pangbourne Properties Ltd and iFour Properties Ltd unconditionally. The reasons for the approval appear below. Parties

[2]The primary acquiring firm is Pangbourne Properties Ltd (“Pangbourne”), a listed company incorporated in terms of the company laws of the Republic of South Africa. Pangbourne is not controlled by a single shareholder. 1 1 Pangbourne’s major shareholders are Stanlib Investment Solutions (16.09%), Standard Bank of South Africa (Pty) Ltd (5.38%), Panya Investments (Pty) Ltd (7.99%), Old Mutual Life Assurance Company (South Africa) Ltd (5.94%), Broker (Pty) Ltd (RMB) (6.41%) and Resilient Property Income Fund Ltd (9.54%). 2

[3]The primary target firm is iFour Properties Ltd (“iFour”), a company incorporated under the company laws of the Republic of South Africa. iFour is indirectly controlled by Pangbourne (the primary acquiring firm in the instant transaction), with 35.3% shareholding. 2 Transaction

[4]In terms of the structure of the transaction, Pangbourne intends to increase its shareholding in iFour 3 from 41.45% to 100%. On completion of the transaction, iFour will be wholly controlled by Pangbourne. Rationale

[5]Pangbourne submits that as a result of the prevailing market conditions and investor preferences, it has decided to consolidate its property portfolio in order to create a larger portfolio, extract cost-savings and synergies and maximise funding efficiencies.

[6]The transaction represents an opportunity for iFour’s unitholders to be part of a much larger property fund with more diversification, less risk exposure and a greater potential for future growth. Parties’ Activities

[7]Pangbourne and iFour are property loan stock companies listed on the JSE Ltd under the “Financial-Real Estate” category. Both firms own a property portfolio which consists of industrial properties, office properties and retail properties throughout South Africa. Competition Analysis

[10]The transaction results in an overlap between the activities of the merging parties in respect of office, retail and industrial properties. However, this overlap will not lead to a substantial lessening or prevention of competition as the transaction represents a move by Pangbourne from joint control in iFour to sole control. 2 iFour’s other major unitholders include Broker (Pty) Ltd RMB (17.72%), Securities Lending/BOE Online Share Trading (6.67%) and ABSA Commercial Property Finance (Pty) Ltd (5.48%). 3 Pangbourne acquired joint control in iFour in 2003. 3 Public interest

[12]The transaction does not give rise to any public interest issues and is approved without conditions. _______________ 21 May 2008 D Lewis Date Tribunal Member Concurring: Y Carrim and N Manoim Tribunal Researcher : I Selaledi For the merging parties : Vani Chetty Competition Law (Pty) Ltd For the Commission : Makgale Mohlala and Thaba Mavhase