Following our newsflash update which broke early on Thursday morning last week, the Competition Commission has released this interim report.
The Competition Tribunal has conditionally approved two related mergers which together result in the sale of Gold Circle Pty (Ltd) assets and operations in the Western Cape to the Thoroughbred Horseracing Trust (“the Trust”).
This approval is subject to the condition that there are no merger specific retrenchments within 2 years of the date of the transaction.
The transaction structure is such that the assets and operations are sold to Kenilworth Racing first, with the shares in Kenilworth Racing then being sold to the Trust. Kenilworth would then conclude a managing agreement with Phumelela Gaming and Leisure.
In reaching this decision the Tribunal found that it was unlikely that the transaction would result in a substantial lessening of competition in the horseracing operator and sports betting markets.
The Tribunal, however, agreed with the Commission that the transaction, together with the additional agreements was likely to result in Kenilworth Racing not acting independently of Phumelela Gaming and Leisure.
Furthermore, the Tribunal agreed with the Commission that the Western Cape ‘division’ of Gold Circle did not meet the requirements of the failing firm defence.
In its reasons the Tribunal will consider the competition consequences of the present regulations governing the market and will discuss whether, notwithstanding such regulation, there might still be possibilities for sector regulators to allow competition for the market. Full reasons in the matter will follow in due course.
