TP Hentiq Xeedan

The judgment

The court's own file

competitiontribunal South africa fax form to Paul Cleland fax 011 535 8600 Werksmans Inc Legal Services 44283 Competition Commission ref 45/LM/Jun11 date 03 October 2011 from Tebogo Mputle pages 4 (including this page) re Reasons This message is intended only for the use of the addressee and may contain information that is privileged and confidential. 4f you are not the intended recipient, you are hereby notified that any dissemination of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately by telephone. Attached please find the Tribunal’s reasons for the decision in the above matter. Regards ge Tebogo Mputle CC: Zanele Hadebe 44583 3° Floor, Mulayo, the dti Campus, 77 Meintjies Street, Sunnyside, Pretoria & Private Bag X24, Sunnyside 0132 Tel: +27 (12) 394 3300 Fax: +27 (12) 394.0169 Email: ctsa@comptrib.co.za Website: http:/Avww.comptrib.co.za Pewth aff tee counpetitiertribunal ote COMPETITION TRIBUNAL OF SOUTH AFRICA In the matter between: TP Hentiq 6159 (Pty) Ltd And Xeedan Property Portfolio Case No: 45/LM/Jun11 Acquiring Firm Target Firm Panel Heard on Order issued on Reasons issued on Norman Manoim (Presiding Member) Andreas Wessels (Tribunal Member) Yasmin Carrim (Tribunal Member) 07/09/2011 07/09/2011 03/10/2011 Reasons for Decision APPROVAL

[1]On 7 September 2011 the Competition Tribunal (“Tribunal”) unconditionally approved the proposed transaction involving TP Hentiq and Xeedan Property Portfolio. The reasons for approval of the proposed transaction follow below. THE TRANSACTION AND RATIONALE

[2]The proposed deal is a property merger in terms of which TP Hentiq 6159 (Pty) Ltd (‘TP Hentiq”) intends to acquire the Xeeden Property Portfolio (“Xeedan’), comprising of Xeeden Properties.

[3]TP Hentig, the acquirer in this transaction, was established for the purpose of this deal and is controlled by Investec Bank Limited (“Investec”) which provides a range of financial products and services solutions, including properties. Xeeden is a 1 property portfolio comprising residential, vacant land, commercial office, as well as golf estate, agriculture/farm and industrial properties.

[4]The rationale for the proposed transaction is essentially commercially driven as it arises from financial transactions between the merging parties in terms of which Investec advanced monies to Xeedan in relation to Xeeden property portfolio and acquired security rights in respect of the Xeedan property portfolio. Xeeden fell into default with the repayment obligation and Investec exercised its security rights in respect of the Xeeden properties so that it can sell these properties to discharge the debts due to it.

[5]Post merger, Hentiq will take transfer of the Xeedan property portfolio and retain ownership thereof for the purpose of later selling the properties in order to recover the indebtedness due to it. COMPETITION ASSESSMENT

[6]The Commission in its assessment of the proposed transaction found that the

[7]proposed transaction gives rise to horizontal product and geographic overlaps in rentable light or heavy industrial space in Wynberg node and grade A office space in Sandton and Environs node. However at the hearing the merging parties submitted that the Wynberg Property space has since been sold to third parties, which means that there is no overlap in that market. The Wynberg node therefore no longer becomes relevant for the purpose of competition assessment in this proposed deal, and the relevant market is the Grade A office Space in Sandon and Environs node. There are no competition concerns in the relevant market as the post merger combined market share of the merging parties in this property space is low. The Commission calculated the post merger combined market share in this market to be 3.98%, whereas the merging parties submitted that the post merger combined market share in this market is 3.98% if you take into account grade A and B, but that if you only take into account grade A, the post merger combined market share drops to 1.22%. {8] In addition, it was submitted that there are a large number of competitors in this relevant property space, and that customers have countervailing power as they are 2 able to negotiate the rent payable and are also able to switch to other office spaces within the nearest surroundings fairly easily, which further eliminates any potential competition concerns which may arise. PUBLIC INTEREST

[9]This deal does not give rise to any public interest issues. CONCLUSION

[10]The proposed transaction is unlikely to substantially prevent or lessen competition in any property market, and is accordingly approved without conditions. | 03/10/2014 N Manoim Vi Date Y Carrim and A Wessels concurring Tribunal Researcher: Londiwe Senona For the merging parties: Werksmans Attorneys For the Commission: Zanele Hadebe x & & Communication Result Report € 3. Oct. 2011 11:57 3 Ed 3 No Date/Time: 3. Qct. 2011 11:44 File se No, Mode Destination Pe (s) Result oe cent 1642 Memory TX 00115358600 > 4 ce | tebozo 44983 OK 44583 ot Reason for error E 2) Wang up or line fail E. 2) Busy o answer E.4) No # imi] E.5) Exceeded max. E-mail size ) No facsimile connection competitiontribunat santh africa <q to Paul Cleland fax 011 535 8600 Werksmans Inc Legal Services : 44283 Competition Commission ref 45/.MiJunt4 date 03 October 2011 from Tebogo Mputie pages 4 {including this page) re Reasons “This massage ls Intended only for the use of fre addresese and may contain information thats privllaged and confidential, 4f you are not the intended recipient, you are hereby ictitied that pny diseesminatlon of hia ie stvictly prohibited. If you have received this ‘communication in erver, please notifyus immediately by telephone. Attached please find the Tribunal's reasons for the decision in the above matter. Regards & Tebago Mputie CC; Zanele Hadebe 44583 af Flaor, Mulayo, the dii Campus, 77 Meinfies Strest, Sunnyside, Pretoria $i Private Bay X24, Sunnyside 0132 Tar 4771709089200 Fax 427 1232040189 Bait, ctsadleomnttih.ce.za — Websiie: http: Miewe.comptris.co.za