GROWTHPOINT PROPERTIES TO ACQUIRE STUDENT ACCOMMODATION FOLLOWING MERGER APPROVAL BY TRIBUNAL
The Tribunal has unconditionally approved the large merger whereby Growthpoint Properties Ltd (“Growthpoint”) will acquire Joburg Stay (Pty) Ltd (“Joburg Stay”) from Feenstra Group (Pty) Ltd ("Feenstra Group").
This transaction involves an internal reorganisation of the Feenstra Group. As such, the target firms are Joburg Stay, the seven Gauteng student accommodation properties and their rental enterprises that Joburg Stay will wholly own. Post-merger, Growthpoint will have control over Joburg Stay through its ability to appoint a majority of the board members.
In its competition analysis, the Tribunal has concluded that the merger is unlikely to substantially prevent or lessen competition in any market in South Africa as the transaction will not result in any market share accretion or any change in the competitive landscape in any relevant market. In addition, there is no vertical overlap between the merger parties’ activities as they do not participate at different levels of the same supply chain. Furthermore, the merger is unlikely to create a platform for the exchange of competitively sensitive information to the detriment of competition in the rentable office space market.
Public interest considerations
The Tribunal has concluded that the transaction is unlikely to raise any public interest concerns: the merger will not have an impact on employment i.e. there will be no retrenchments or job losses; and the merger is likely to promote a greater spread of ownership by historically disadvantaged persons (“HDPs”) in the market as Joburg Stay will benefit from the shareholding by HDPs in Growthpoint.
The merger parties
Growthpoint is a Real Estate Investment Trust (“REIT”) listed on the Johannesburg Securities Exchange (“JSE”) and is not controlled by any single shareholder. It is a property investment holding company that holds a property portfolio comprising rentable office, retail and industrial space. Most of Growthpoint's properties are located in Gauteng, the Western Cape, KwaZulu-Natal and the Eastern Cape. It operates as a landlord of the properties that it owns and lets the properties to its tenants. It does not hold any student accommodation properties in its current portfolio. Growthpoint also operates a funds management business.
Joburg Stay is a private company incorporated in South Africa. It is wholly owned by Varsity Stay (Pty) Ltd ("Varsity Stay") which is, in turn, solely controlled by the Feenstra Group. Joburg Stay currently owns shares in student accommodation properties together with the associated rental enterprises. These properties are built specifically for students and only students enrolled at the relevant universities are able to lease rooms.
Gillian de Gouveia, Communications Officer
On behalf of the Competition Tribunal of South Africa
Cell: +27 (0) 82 410 1195
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