Tribunal approves Steinhoff’s Tekkie Town purchase
THE FOOTWEAR of Tekkie Town chief executive Bernard Mostert briefly became the focus of attention during a Competition Tribunal hearing this week.
The hearing was scheduled to hear a number of proposed mergers, including the proposed acquisition of the entire issued share capital of sport and lifestyle footwear chain Tekkie Town by Steinhoff International, which has a primary listing on the Frankfurt Stock Exchange and a secondary listing on the JSE.
Competition Tribunal chairman Norman Manoim asked Mostert how he would distinguish between a sports and a leisure shoe.
“I see you are wearing a pair that I would describe as somewhere in between sports and leisure,” Manoim said.
Mostert said Tekkie Town had in recent years benefited largely from the move in the fashion industry to what was called “at leisure shoes”, a shoe that could be used socially and also for athletic purposes.
“I guess the shoes that I am wearing would be regarded as ‘at leisure’ shoes and we sell them so I like to wear the things we sell,” he said.
Manoim remarked: “You are creating a new fashion statement at tribunal hearings.”
The tribunal on Wednesday approved the acquisition of Tekkie Town by Steinhoff International without any conditions. Steinhoff International has not disclosed the value of the transaction, which it announced in September.
However, global equity firm Actis in November 2004 invested $65 million (R920m) in Tekkie Town for a 42.5 percent stake in the sports shoe retailer.
Billy Mabatamela, appearing for the commission, told the tribunal on Wednesday that Tekkie Town had about 300 stores located throughout South Africa and sold branded sport leisure and lifestyle footwear and to a lesser degree related footwear.
Mabatamela said the commission considered the activities of the merging parties and found that the proposed transaction presented a horizontal overlap in the broad market for the retail of footwear.
However, he said given that Tekkie Town only operated in the branded sport and lifestyle footwear market, the commission considered the activities of the merging parties in the narrow market for branded sport and lifestyle footwear.
Mabatamela said the commission found that the proposed transaction was unlikely to substantially prevent or lessen competition in any market because Steinhoff International was mainly active in the retail of non-branded sports and lifestyle footwear with limited sales of branded sports and lifestyle footwear while Tekkie Town only sold branded sport and leisure/lifestyle footwear.
Mabatamela said the acquisition might impact on sales of branded sports and lifestyle footwear and the commission had considered the dynamics of this market. But the commission found there were several players in the market that would constrain the merged entity.