The corporate jousting between Caxton and CTP Publishers and Printers (Caxton) and Mpact took a new turn on Friday when the Competition Tribunal set aside a Competition Commission decision to deny permission to file a separate notification of a merger with Mpact.
The Tribunal said Caxton’s separate application for approval for a merger, made in July 2021, was usually done in the context of a hostile merger. Caxton has for some time been trying to acquire Mpact and has accumulated a majority 34% stake in the paper and plastic recycler over the past two years.
Last month, hostility bubbled over when Mpact claimed Caxton had “ulterior motives” when it voted against executive pay resolutions at Mpact’s AGM, while Caxton, in turn, accused, Mpact of “inexplicable hostility.”
Caxton, a printer and distributor of newspapers, books and magazines, had a market capitalisation of R3.46 billion on the JSE. As of Friday, paper and plastics packaging business and recycler Mpact is worth R4.22bn.
Caxton applied to the Commission in June 2021 for permission to make a separate filing for a merger, in terms of which it sought to acquire majority control over Mpact. Mpact did not support the merger and refused to agree to a joint merger filing.
The Commission then refused Caxton’s application on the basis that it would not be just and reasonable to permit a separate filing.
Caxton approached the Tribunal to appeal the Commission’s decision. Mpact opposed the application. The Commission also made submissions during the Tribunal hearing but said it would abide by the Tribunal’s decision.
The Tribunal said it had referred the Commission’s decision back to it to reconsider. In addition, Caxton’s application for the Tribunal to grant it permission to file its separate merger notification has been dismissed.
The Tribunal said there are two mechanisms whereby a merger approval process might get underway. The first is in circumstances where the merging parties are agreeable to a merger and submit a joint merger notification.
The second allows an acquiring firm to apply to the Commission for permission to file a separate notification of a merger, usually in the context of hostile mergers. Caxton had applied to the Commission in line with the second mechanism, the Tribunal said in a statement on Friday.
BUSINESS REPORT