The feasibility of hostile take-overs In South Africa

Abstract

Since the dawn of democracy, South Africa has had ostensibly all of the essential elements that are assumed to be sufficient for a country to develop an active market for hostile takeovers, in other words dispersed shareholder ownership, depressed shareholding, and a United Kingdom- or United States-inspired regulatory framework. This has not gone unnoticed. But even with this essential element a wave of hostile takeovers has never hit South Africa. Renewed excitement surrounding hostile takeovers has been revived by the attempted takeover of Murray & Roberts by Aton. The conspiracy stalled when the bid was challenged by the independent board of directors of Murray & Roberts at the Takeover Regulation Panel (TRP) and opposed by the Competition Commission. It appears as if Murray & Roberts successfully defended the hostile takeover by Aton, thereby continuing the narrative that hostile takeovers seldom succeed in South Africa, which raises questions about the feasibility of hostile takeovers in South Africa. This is the enigma of hostile takeovers in South Africa which the study seeks to examine.

The research argues that, by applying abstract theories derived from the Anglo- American experience, most outside observers have neglected to properly account for local, idiosyncratic, South African factors that have stifled the market for corporate control in South Africa.