Media24, Paarl Media merger failsComment on this story
Johannesburg - Paarl Media Group had informed Media24 that it was abandoning its merger application following Caxton, a direct competitor, being allowed to intervene in the proceedings at the Competition Tribunal, Lambert Retief, the non-executive chairman of the printing company, said on Friday.
The merger involved Media24 buying shares it does not own in Paarl Media because Retief, who is 61, wants to retire.
Retief said: “We have therefore informed Media24 today (Friday) that I’m withdrawing our put option to sell our shares, and have accordingly collapsed the transaction.”
Media24, a subsidiary of the JSE-listed media and internet giant Naspers, said it understood Retief’s decision to withdraw his put option to sell his shares in Paarl Media.
“We are disappointed that what was an uncontentious transaction has been thwarted by Caxton, a direct competitor, and we are deeply concerned that the process of notifying transactions to the competition authorities is capable of such manipulation,” it said.
Retief said in a statement: “The Retief family signed an agreement with Media24, which gave us put options in future to oblige Media24 to buy the family’s shares in Paarl Media. After turning 60, I wanted to retire, so we exercised our put options to sell the remaining 5 percent and 12.5 percent shares in two companies in the heatset and coldset to Media24.”
The Competition Commission, after investigating the proposed merger, recommended to the tribunal that it be approved unconditionally.
Caxton successfully applied to the tribunal to be allowed to intervene in the proceedings.
Nandi Mokoena, a spokeswoman for the tribunal, said on Friday that it had not issued its reasons for allowing the intervention, but in terms of the Competition Act, if anybody was concerned about the impact a merger would have and they felt the commission had not adequately addressed these concerns, they could apply to the tribunal and ask to intervene in the case.
“It was after hearing Caxton and Media24 on this intervention application that the tribunal allowed Caxton to intervene,” she said.
The tribunal said Caxton had to be given access to documents filed in the case, could call for the discovery of further documents that relate to the direct or indirect control of Naspers, and would be allowed to cross-examine witnesses.
Caxton reportedly questioned the commission’s acceptance of the merging parties’ notification of the merger and said it was defective due to the insufficient disclosure of the direct and indirect interests of the controlling shareholders in Media24 and Paarl Media.