The Competition Tribunal has given Royal Bafokeng Finance the go-ahead to expand its shareholding in a technology company.
It said Royal Bafokeng Finance - a holding company for the Royal Bafokeng Nation's commercial interests - could proceed with exercising call option agreements to increase its stake in MB Technologies.
Coyote, Absa and Spiller initially granted the call options to Royal Bafokeng. The Competition Commission previously recommended the Tribunal approve the deal without conditions.
Royal Bafokeng Finance already has 26% of MB Technologies, an IT distribution organisation.
Towards the end of 2005, both companies announced the initial agreement, which resulted in MB Technologies becoming empowered. At the time, both companies said the deal was significant and could result in "the formation of the biggest black-empowered and privately-owned IT group in SA".
Search for partner
Leo Baxter, founder and CEO of MB Technologies, said the IT firm's search for a BEE partner had taken two years. "Over the two years that we were seeking a suitable partner, we met with numerous candidates," he said in a statement.
"We were attracted to MB Technologies because of its positioning in the local IT market," said Kgosi Leruo Molotlegi, king of the Bafokeng Nation. "Technology will play an ever-increasing strategic role in the development of our nation and we feel MB Technologies is strongly positioned to assist us in reaching our empowerment and upliftment goals."
The deal was to be funded through a proportional dilution of the current shareholding within the MB Technologies' fold. Payment for Royal Bafokeng's shares will take place in cash.
At the time, Baxter said shareholders had been offered the opportunity to retain their stake in the technology firm, an option Absa had indicated it would accept.
The transaction was expected to extend MB Technologies' reach beyond the first tier IT market into the second and third tier IT market.
"Since government is the most prominent buyer of solutions from the second and third tier market, we believe this will enable us to make inroads into that space," said Baxter.
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