Competition Tribunal clears two-part transaction involving luxury hotels and apartments
The Competition Tribunal has unconditionally approved proposed transactions whereby RMB Ventures Nine (Pty) Ltd (“RMBV”) will acquire Erf 18 Zimbali Coastal Resort (Pty) Ltd (“Erf 18”) and CAP HoldCo (Pty) Ltd (“CAP HoldCo”) will acquire Capital Apartments and Hotels (Pty) Ltd and CAH PropHoldCo (Pty) Ltd (“PropHoldCo”).
Following implementation of the proposed transactions, Erf 18 will be jointly controlled by RMBV and the Capital Apartments and Hotels Group (Pty) Ltd (“CAH Group”), while Capital Apartments and Hotels and PropHoldCo will be jointly controlled by CAP HoldCo. In turn, CAP HoldCo will be jointly controlled by CAH Group and RMBV.
The primary acquiring firms are RMBV and CAP HoldCo. RMBV is controlled by RMB Private Equity Holdco 1 (Pty) Ltd, which is ultimately controlled by FirstRand, a public company that is listed on the JSE Limited and the Namibian Stock Exchange. The FirstRand Group has three main divisions: First National Bank; Wesbank; and Rand Merchant Bank. CAP HoldCo is jointly controlled by the FirstRand Group (RMBV, FirstRand and all firms controlled directly by them), through RMBV and CAH Group. It is a special purpose vehicle incorporated specifically for the proposed transaction and does not conduct any business activities.
The primary target firms are: (i) Erf 18; (ii) Capital Apartments and Hotels; and (iii) PropHoldCo. Erf 18 is a property holding company that owns a number of four- and five-star hotels across various provinces. Capital Apartments and Hotels leases and provides hotel management services to a number of luxury apartments and hotels owned by Erf 18, PropHoldCo and Capital Apartments and Hotels. PropHoldCo owns a luxury hotel and apartment asset, as well as erven earmarked for the future development of hotels or apartments.