Imperial gets green light for Regent deal

Johannesburg - Imperial Holdings [JSE:IPL] announced on Tuesday that on 24 April 2017 the Competition Tribunal approved its proposed transaction regarding Regent Group on revised terms.

On 29 September 2015 Imperial announced that it had accepted an offer made by Hollard Holdings to acquire the Regent Group's South African operations and Regent Africa. Hollard would, on implementation, sell the Regent Group's Vaps businesses to MotoVantage Holdings.

The proposed transaction required unconditional regulatory approvals in all the relevant jurisdictions.

On 23 October 2016, the Competition Commission recommended to the Competition Tribunal that the proposed transaction be prohibited. Subsequently, on 17 January 2017, the relevant Botswana and Lesotho authorities approved the disposal of Regent Africa to Hollard International Holdings, for a consideration of R697m.

Following the prohibition recommendation by the Competition Commission, Imperial, Hollard and MotoVantage (the merging parties) and their advisers engaged extensively with the Commission to seek remedies to those issues that were the basis of the prohibition recommendation.

During this process, MotoVantage elected to withdraw from the proposed transaction in order to obviate further delays and the distraction of key management in pursuit of remedies to the Commission's objections on the Vaps components of the proposed transaction.

Merging parties

The merging parties subsequently reached an agreement with the Commission on revised terms and conditions, which were recommended to the Competition Tribunal for approval.

Imperial's disposal of the Regent Group was motivated by the desire to exit any business unrelated to Imperial's core motor vehicle or logistics businesses, and any business that lacked the scale or potential to compete effectively in the long term.

Although portions of the Regent Group's business, namely the Value Added Products (Vaps) business were directly related to the motor vehicle business, it was decided that the interests of shareholders, staff and a prospective purchaser would best be served by disposing of the Regent Group in its entirety, with Imperial continuing to participate in the revenues and profits that accrued from the Vaps.  

Hollard will acquire 100% of the ordinary shares in and tier 2 capital against the Regent Group, excluding certain Vaps operations, entities and profits to be retained by Imperial.