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Media24 / Paarl Media: transaction collapsed

22 Aug 2014 12:53
Lambert Retief, Non-executive Chairman at Paarl Media, has issued the following statement...

(Image extracted form the Paarl Media website)
At 61, one would think that there are a few basic decisions a man can make about his own life - such as when he retires. The Retief Family signed an agreement with Media24 that 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% and 12.5% shares in two companies in the heatset and coldset printing businesses to Media24.

Media24 already has more than 80% of the shares in both companies, but because I had a management agreement that would lapse, we had to notify the transaction to the Competition Commission as a "merger". Caxton, a direct competitor, objected - as they always do. Terry Moolman has sued numerous companies in the past. The Competition Commission, after thoroughly considering the objections raised by Caxton, recommended to the Competition Tribunal that the merger be approved unconditionally.

Tribunal decision and its ramifications

Most unexpectedly, the Tribunal allowed Caxton to intervene on a wide range of issues. Quite extraordinarily, the Tribunal has refused to give any reasons whatsoever for its decision.

We simply can't proceed with the deal, as Caxton will be as disruptive as they can and will paralyse us operationally for years to come, given the width and depth of the interventions allowed by the Tribunal. Caxton and their lawyers can in this way access Media24's commercially sensitive information. The previous chair of the Competition Tribunal, Dave Lewis, once put it succinctly when he said Caxton's rivalry "borders on the obsessive. This was pure harassment - ... for the sheer pleasure of irritating Naspers, Caxton wasted shareholders' money and obliged Naspers to do the same."

I refuse to be part of the Caxton circus and further waste shareholders' money. We have therefore informed Media24 today that I'm withdrawing our put option to sell our shares, and have accordingly collapsed the transaction. My management agreement therefore remains in place.
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