TRP gags Caxton from talking out about its proposed acquisition of Mpact


A number of days in the past, on Thursday, 1 September, the Takeover Regulation Panel (TRP) issued a number of rulings towards the listed Caxton group (Caxton CTP Publishers and Printers), following a string of complaints from Mpact referring to bulletins and press releases issued by Caxton and media interviews carried out by its chair Paul Jenkins and managing director Tim Holden.

The rulings successfully gag Caxton and prohibit the corporate from making any additional public statements about its proposed acquisition of Mpact.

They arrive within the wake of Caxton accusing the Mpact administrators in public of failing of their fiduciary duties and withholding price-sensitive info from shareholders.

Caxton has indicated that it’s going to take the ruling on enchantment.

Surprisingly, neither the Mpact grievance to the TRP nor the TRP ruling disclosed that certainly one of Mpact’s non-executive administrators serves as chair of the panel.

That Neo Dongwana serves as a non-executive director on the Mpact board and as chair of the TRP just isn’t a secret. The newest Mpact annual report and the corporate’s web site disclose this.

Nonetheless, the obvious battle of curiosity just isn’t addressed within the TRP paperwork, regardless of its significance. Dongwana serves on Mpact’s Audit and Threat Committee, in addition to its Social and Ethics Committee.


The battle between Caxton and Mpact got here to a head on 2 June when Caxton voted towards the approval of non-executive remuneration at Mpact’s newest AGM.

Caxton owns 34% of Mpact’s shares, which suggests the decision couldn’t cross, because it required approval of 75%.

Learn: Tensions between Caxton and Mpact boil over

The result’s that the non-executive administrators, together with Dongwana, haven’t been paid for his or her companies since then.

Sporting a couple of hat is widespread in SA for someone of the calibre of Dongwana, however on this case, disclosure of the actual fact – and the way the battle of curiosity was managed – appears essential, given the back and forth of allegations and accusations between Caxton and Mpact.

TRP responds

Zano Nduli, govt director of the TRP, responded to a question associated to the battle by saying that Moneyweb’s request was “erroneously” addressed to the chair of the panel.

“Kindly notice that the chairperson of the panel (nor another member of the panel for that matter) just isn’t concerned within the day-to-day operating of the panel. Due to this fact, panel members (being non-executive members) are by no means concerned in energetic issues earlier than the panel, together with that which types the subject material of your enquiry,” says Nduli.

“The duty for the day-to-day operating of the panel falls totally on the executives and workers of the panel, beneath the supervision of the manager director, Andile Nikani.

“Accordingly, the e-mail acquired from you earlier right this moment has not been shared by the panel workers with the chairperson as she just isn’t an govt, nor will or not it’s shared along with her following this correspondence,” says Nduli.

“Relating to the subject material of your enquiry, we advise that the panel’s coverage isn’t to touch upon media enquiries referring to issues through which we’re concerned. What we are able to do, nonetheless, is to share a replica of our ruling on that matter, which is self-explanatory.

“The events to that matter are conscious of the contents of our ruling and their obligations regarding it. Due to this fact, we can not develop additional on what’s already contained in our ruling.”

It must be famous that Moneyweb disclosed the connection between Moneyweb proprietor African Media Leisure and Caxton’s majority shareholders within the first paragraph of the primary article printed when the argument grew to become public.

The hyperlink between Moneyweb and Caxton was additionally disclosed to Mpact administration in an e mail asking for commentary on the matter and defined in telephonic discussions with Mpact’s public relations guide and Mpact CEO Bruce Sturdy on the time.

The disclosure has been repeated at any time when sensible.


The panel’s rulings within the complaints by Mpact had been signed off by govt director Andile Nikani, who dominated in favour of Mpact in all of the issues.

The complaints relate to numerous statements made by Caxton on numerous platforms regarding Caxton’s intention to amass management of Mpact. Considered one of these publications is a press assertion Caxton printed on the JSE’s Sens information platform that lists the explanations why Caxton voted towards totally different resolutions at Mpact’s annual basic assembly.

Performing via legislation agency Webber Wentzel, Mpact complained to the TRP that the statements printed by Caxton contravened rules promulgated by way of the Corporations Act.

“The allegation is that the publications made by Caxton contravened Regulation 117 as such publications stem instantly or not directly from Caxton’s publicly said intention of buying management of Mpact, and that such publications weren’t authorized by the panel in accordance with Regulation 117,” in keeping with the TRP’s abstract of the primary grievance.

Caxton had the chance to reply, and Mpact a possibility to reply to that, with Nikani having the final phrase in his ruling.

“The information relied upon by Caxton within the grievance will not be in dispute, and for the aim of this resolution, we’ve regarded them to be widespread course,” says Nikani.

“In mild of the truth that the information are widespread course, and we’ve held in favour of Mpact, and towards Caxton, we’ve issued a direct ruling as a substitute of constructing our willpower beneath Part 169(1)(a) of the Corporations Act.”

Nikani stated it was not vital for the TRP to nominate an investigator to conduct an investigation into the issues as all of the information are identified.

“I discovered it prudent to determine the grievance by way of Regulation 118 of the Takeover Laws.”

The panel needed to determine on three points:

  1. Whether or not Caxton breached rules in publishing details about a proposed merger or takeover, particularly whether or not the publications fall throughout the definition of “paperwork” in relation to “an affected transaction”;
  2. Whether or not or not Mpact breached Part 126 of the Corporations Act for failing to co-operate with Caxton in Caxton’s efforts to make a suggestion; and
  3. Whether or not it’s competent for the TRP to subject the reduction sought by Mpact and gag Caxton from making additional publications or bulletins referring to its intention to amass management of or a controlling curiosity in Mpact with out prior approval of paperwork by the TRP (the ‘Gag order’).

Failure to co-operate

The TRP first determined Caxton’s grievance that Mpact has completed all the pieces in its energy “to frustrate Caxton from making a suggestion”. Nikani stated this assertion is “so obscure as to render it solely unhelpful” to the panel.

He lists the actions that the legislation regards as irritating in a merger or acquisition provide however concludes that Caxton has not made a suggestion by way of rules. Thus, Mpact didn’t frustrate the method.

“It’s common course that Mpact has not acquired an precise provide from Caxton. It’s also widespread course that Caxton’s publications don’t quantity to a suggestion that’s imminent, in any other case, it will have been compelled to make such a suggestion beneath our takeover legal guidelines,” in keeping with the ruling.

Nikani refers to extra laws: “Till a agency intention announcement is printed, a regulated firm that’s the topic of hearsay, hypothesis or a cautionary announcement printed by a possible offerer, might presume that a suggestion in good religion just isn’t imminent until the regulated firm is consensually negotiating with a possible offeror.

“Caxton’s publications in regards to the provide fall in need of the aforesaid, and might be simply considered rumours or hypothesis that Mpact can legally ignore.

“The Irritating Motion Grievance introduced by Caxton towards Mpact is dismissed,” dominated Nikani.

Different rulings

Nonetheless, referring to the definitions of “paperwork” and “affected transaction” and contemplating whether or not Caxton ought to have obtained approval earlier than the publication of its views and whether or not comparable publications in future have to be authorized, Nikani says the publications do relate to a suggestion.

He says the difficulty to be determined is whether or not Caxton breached rules for failing to acquire the approval of the TRP previous to publishing its publications, “extra particularly, whether or not the publications fall throughout the definition of ‘paperwork’ in relation to ‘an affected transaction’”.

He says Caxton’s argument that related rules solely apply to paperwork referring to an “affected transaction” is improper and dismisses Caxton’s defence that no provide has been made as but.

Caxton talked about in all of the publications and interviews that it’s going to solely be capable of make its provide as soon as it has acquired the approval of the competitors authorities. Thus, it maintains that any paperwork don’t represent an affected transaction as a result of there isn’t any agency provide.

Nikani disagrees, now saying that Caxton’s speak of a suggestion and no matter it publishes on the matter must be considered formal takeover speak.

“Caxton’s argument seems to be based mostly on a literal interpretation of Regulation 117 by way of which solely paperwork which relate to a dwell affected transaction (and never paperwork referring to a attainable affected transaction) require the prior approval of the panel,” says Nikani.

“Part 119(1) of the Corporations Act thus requires the panel to manage any affected transaction or provide (together with any proposal, which if accepted would end in an affected transaction) to make sure the integrity of {the marketplace}, among the many different objections in Part 119 of the Corporations Act.

“Moreover, Part 119(2)(d)(i) of the Corporations Act additionally requires the panel to manage the conduct of the events when an affected transaction is contemplated, which is previous to an affected transaction as outlined in Part 117(1)(c) of the Corporations Act.

“As well as, there are numerous different provisions in our takeover legal guidelines which empower and require the panel to manage affected transactions even earlier than they mature into precise and dwell affected transactions or affords.

“The interpretation superior by Caxton has the impact of limiting the panel’s powers and regulation of affected transactions to solely when a proposed transaction has matured to being a dwell affected transaction (i.e. adequate to make the method contemplated in Regulation 99 onwards).

“This interpretation undermines and limits the panel’s capacity to successfully regulate affected transactions in accordance with its mandate and aims as set out in Part 119 of the Corporations Act,” says Nikani.

The TRP dominated that each one paperwork referring to an affected transaction, together with those who relate to attainable transactions, fall throughout the jurisdiction of the panel and must be authorized earlier than publication.


Lastly, the TRP successfully gagged Caxton by upholding the grievance introduced by Mpact towards Caxton and prohibiting Caxton “from making any additional public statements/bulletins in any kind and on any platform in regards to the acquisition of Mpact with out the approval of the panel”.

Nikani says any individual issued with a ruling might apply to the Takeover Particular Committee for a listening to relating to the ruling.

Caxton has already indicated that it’s going to take the ruling on enchantment.

Hearken to each side of the Caxton vs Mpact spat (or learn the transcript of the interview with Mpact CEO Bruce Sturdy right here and Caxton chair Paul Jenkins right here):

Disclosure: Caxton’s majority shareholders are additionally majority shareholders in African Media Leisure (AME), the proprietor of Moneyweb.


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