Despite resistance by leading retailers including Sefalana Group and FurnMart, the Competition Authority has given a nod to the takeover of Warbler Holdings (Pty) Ltd by businessman, Ramachandran Ottapathu.
Ottapathu, who is the sole owner of BLUEHEARTS (PTY) LTD, and a director at Choppies Enterprise, a direct competitor of Sefalana Holdings has notified the market of his intention to acquire the entire issued shareholding of Warbler Holdings (Pty) Ltd in IT4Africa (Pty) Ltd; Goldtech (Pty) Ltd; Healthwest Africa (Pty) Ltd; and Solid Logistics (Pty) Ltd in mid July 2016.
Still in mid July, the Competition Authority held a public hearing regarding the intended acquisition where the leading retailers amongst them Sefalana and FurnMart opposed the move. Sefalana, Choppies and FurnMart are all listed companies at the Botswana Stock Exchange.
The leading retailers made counter arguments against Ottapathu’s intentions classifying it as “unfair” competition. Sefalana which was represented by its managing director Hans Kampann and Group Finance director Mohamed Osman presented a lengthy letter in which they gave details of why they opposed the proposed acquisition.
However on Monday, the Competition Authority said that is has since decided to “conditionally” authorise the proposed transaction.
“The proposed transaction is not likely to result in the prevention or substantial lessening of competition, or endanger the continuity of the services offered in the distribution of branded consumer electronics (domestic and commercial) to resellers. The market structure in the distribution of branded consumer electronics (domestic and commercial) to resellers will not be altered as the acquiring entity will be inheriting the position of the target enterprise,” reads part of the lengthy statement issued by the Authority late Monday.
The Authority further stated that in view of the fact that Ottapathu also has controlling interests in enterprises that deal with the retailing of branded consumer electronics – Choppies Enterprises Limited shall for a period of five (5) years from the date of this decision, not enter the market for the retailing of branded consumer electronics currently traded by Warbler Holdings (Pty) Ltd, for as long as he has a stake in Choppies Enterprises Limited.
The Authority says that in the event that Choppies Enterprises Limited decides to enter this market Ottapathu is to immediately notify the Authority of this intent and the terms under which Choppies would be supplied by Bluehearts (Pty) Ltd.
By the time of going to press, both Sefalana and FurnMart had not yet issued statements regarding their position on the matter.