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COMPETITION TRIBUNAL OF SOUTH AFRICA

Case No: 33/LM/Apr11

In the matter between:

Newshelf 1093 (Pty) Ltd

Capital Partners Group Holdings …................................................................Acquiring Firms

And

Pepkor Holdings Limited ….....................................................................................Target Firm

Panel : Norman Manoim (Presiding Member) YasminCarrim (Tribunal Member) Merle Holden(Tribunal Member)

Heard on : 22/06/2011

Order issued on : 22/06/2011

Reasons issued on : 07/07/2011

Reasons for Decision

Approval

1. On 22 June2011 the Competition Tribunal (“Tribunal”) unconditionally approved the proposed transaction involving Newshelf 1093 (Pty) Ltd, Capital Partners Group Holdings and Pepkor Holdings Limited. The reasons for approval of the proposed transaction follow below.

Parties to transaction

2. The primary acquiring firms are Newshelf 1093 (Pty) Ltd (“SPV”) and Capital Partners Group Holdings Limited (“CPGHL”). SPV is a private company incorporated in terms of the laws of the Republic of South Africa.¹The SPV does not directly or indirectly control any firm. The ordinary shares in the SPV are issued to and held by SPV Oryx Owner Trust, which is an administrative trust.

3. The primary target firm is Pepkor Holdings Limited (“Pepkor”), a public company in terms of the laws of the Republic of South Africa.² Pepkor is pre-merger jointly, controlled by Titan, Brait and OMLACSA.

Proposed transaction and rationale

4. The proposed transaction comprises a number of inter-related steps. Titan will acquire all the shares held in Pepkor by Brait Entities and Medu Capital Fund I (“Medu”), which collectively amounts to 24.27%. Titan will then acquire the shares held in Pepkor by the J &J Pepkor Empowerment Trust (J & J”) and OMLACSA, which collectively amounts to 24.27%. These are temporary interim steps and Titan will, for a very limited period and on a temporary basis only, hold 90.33% of the issued share capital of Pepkor, and will thus, temporarily, have sole control over Pepkor. Each of the SPV and CPGHL will subscribe for 24.43% of the shares in Pepkor.³ The parties will amend the shareholders agreement and articles of association to confer what they term ‘negative control’ on the SPV and CPGHL. Post-merger, Pepkor will be jointly controlled by SPV, Titan and Brait.

Merging parties’ activities

5. The SPV is a newly incorporated entity and as such, it does not supply any products and/or services. Oryx SPV Owner Trust, the trust has been established to hold ordinary shares in the SPV. The trust is a professional management company. It manages the SPV on behalf of its investors. CPGHL is an investment holding company and does not engage in any business activities in South Africa. It provides investment advisory services, outside South Africa, to Brait SA and other international private equity funds.BraitSA is an international investment company that manages third party capital committed by a combination of international and South African investors. Brait SA business involves the raising and management of investment funds classifies as alternative assets.

6. Brait SA’s operations are currently organised into three business units, namely; private capital (activities in equity and debts markets), public market (includes activities in public or highly traded securities market), and treasury capital (includes activities relating to managing Brait’s cash and funding requirements). Titan group is an investment holding group, which has interests in firms involved in food and clothing retail, property investment, hotel management, farming events, leasing of property, wine making, game farming, mining, air chartering, and share investments. RMB a division of FirstRand Bank Ltd, is an investment bank, which inter alia provides advisory services in respect of BEE transactions, mergers and acquisitions and JSE sponsor services.

7. Pepkor is an investment holding company, which holds interests in various subsidiaries that operate in the clothing and household retail market.⁴

Competitive assessment

8. There is no overlap in the products and services of the SPV, Brait and those of Pepkor. The merging parties have submitted that other than Brait SA’s pre-existing interest in Pepkor, neither Brait SA nor its investee companies engage in any business activities which overlap with those of Pepkor. Global Sourcing is a distributor, but does not operate at the retail level of the market. It does not compete with Pepkor. Wechsler, Sunpac and GA Agencies operate at a distribution level and therefore do not compete with Pepkor.

9. The Commission concluded that any horizontal or vertical relationship that might exist between the parties, have existed prior to this notification

Public interest

10. The parties submitted that the proposed transaction will have no impact on the public interest. They submitted further that the transaction is merely a restructuring amongst the shareholders of Pepkor and does not affect Pepkor’s operations.

Conclusion

11. Based on the above we conclude that the proposed transaction,is merely a restructuring of shareholder interests and is unlikely to lead to a substantial prevention or lessening of competition in any relevant market. Furthermore, no public interest concerns arise from this deal. Accordingly the proposed transaction is approved unconditionally.

___________________ 07/07/2011

N Manoim Date

Y Carrim and M Holdenconcurring

Tribunal Researcher: ThabaniNgilande

For the merging parties:Cliffe Dekker Hofmeyer

For the Commission: LeratoMonareng

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