Downside to Bidvest bid

IT MAY have been a kneejerk reaction, but the call by Social Development Minister Bathabile Dlamini for her department, the Reserve Bank, the Treasury and the Competition Commission to scrutinise Bidvest's proposed acquisition of Grindrod Bank conjured up images of something messier than Walmart's controversial acquisition of Massmart.

IT MAY have been a kneejerk reaction, but the call by Social Development Minister Bathabile Dlamini for her department, the Reserve Bank, the Treasury and the Competition Commission to scrutinise Bidvest's proposed acquisition of Grindrod Bank conjured up images of something messier than Walmart's controversial acquisition of Massmart.

Grindrod Financial Services's chief executive, David Polkinghorne, said that, given the size of the two entities involved, the proposed transaction did not have any competition implications. But he acknowledged that because Grindrod played a central role in the distribution of 10million social grants, which is managed by Cash Paymaster Services (CPS), there could be public interest issues that would concern the various regulatory bodies.

The announcement of the proposed transaction was made after the Constitutional Court ruled that the contract between Sassa and CPS was invalid.

This means that both Bidvest and Grindrod are alert to the possibility of Grindrod Bank losing the 20% of its revenue that comes from Sassa payments.