The Competition Tribunal has approved what it’s described as a hostile bid by JSE-listed technology group Pinnacle to acquire a controlling interest in another listed technology company, Datacentrix, subject to conditions recommended by the Competition Commission.
Pinnacle has acquired 34,9% of the total voting shares in Datacentrix, the tribunal said. The deal gives Pinnacle “material influence over shareholders’ votes and therefore control over Datacentrix”.
Pinnacle first announced it was snapping up shares in September. At the time, it was reported that the company had bought the one-third stake in Datacentrix for R267m. Pinnacle CEO Arnold Fourie told Moneyweb at the time that the deal would allow his company to expand into the IT services space more aggressively.
The proposed takeover remains hostile as the offer by Pinnacle has not been recommended by the board of Datacentrix to its shareholders, the tribunal said.
“During the commission’s investigation of the deal, concerns were raised about Pinnacle’s ability to pass on customers’ competitively sensitive information to Datacentrix,” it said. “The commission found that original equipment manufacturers require distributors to collate certain confidential information on customers. Pinnacle, as a distributor, collects this information from customers who compete with Datacentrix.”
According to the commission, the transaction would therefore “allow for the free flow of Pinnacle’s customers’ competitively sensitive information to their competitor, Datacentrix”.
“Because of this concern, the commission recommended conditions for the approval of the deal aimed at preventing Pinnacle from disclosing commercially sensitive customer information to Datacentrix. Pinnacle agreed to the conditions.” — (c) 2013 NewsCentral Media
