Massmart - Announcement Relating to the Proposed A
MSM
MSM
Massmart - Announcement Relating to the Proposed Acquisition of Moresport
Massmart Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1940/014066/06)
(Share code: MSM)
(ISIN: ZAE000029534)
("Massmart")
Announcement Relating to the Proposed Acquisition of Moresport
Having studied the reasons for the Competition Tribunal"s prohibition of the
acquisition of Moresport by Massmart, the parties and their advisors are of the
view that the Competition Commission and the Tribunal have erred in their
analysis and decisions.
The Commission and the Tribunal focussed almost exclusively on the share of the
"national market for the general retailing of sports and outdoor equipment"
which the merged entity would have. The parties do not consider this market
definition to be correct and are of the view that insufficient regard was had to
the evidence surrounding the correct delineation of the market and the
competitors therein, the current and proposed relative market positioning of the
companies and the imminent threats to the state of competition. The evidence
before the Tribunal did not show how the merged entity could possibly undermine
competition or impinge negatively on any stakeholder, none of whom were opposed
to the transaction.
Massmart would like to proceed with the appeal against the Tribunal"s decision
but, notwithstanding the accommodation by the Competition Appeal Court to hear
the matter on 1 August 2006, the possibility exists that a ruling may only be
handed down in September 2006 or later, 16 months or more after the transaction
was entered into.
While the parties respect the competition process as set out in the Competition
Act, this passage of time was never contemplated by the parties, presenting the
Sellers (Vestacor, Nedbank Private Equity and management) with a diminution of
relative value and with challenges relating to the management and growth of
Moresport within the constraints of a sale agreement.
The Sellers" position is now untenable and they have decided not to proceed with
an appeal.
In the circumstances the parties have, therefore, agreed to terminate all
agreements between them with immediate effect.
Johannesburg
29 May 2006
Date: 29/05/2006 04:03:04 PM Produced by the JSE SENS Department
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