Canal+ Now Has More Time to Make a MultiChoice Buyout Offer. A grace period of 25 days has been granted to Groupe Canal+, the French television broadcaster, to present a required offer to the shareholders of MultiChoice Group, a company listed on the JSE.
Canal+ Now Has More Time to Make MultiChoice Buyout Offer
The Takeover Regulation Panel (TRP) has given Canal+ until April 8 to make the compelled bid, the South African pay-TV operator revealed this in a statement to shareholders on Monday.
This follows the TRP’s ruling that Canal+ was obligated to make the necessary offer under South African law after purchasing more than 35% of MultiChoice’s shares.
On February 5, the board of MultiChoice rejected the Canal+ indicative offer of R105 per share and informed shareholders that they were no longer required to trade with caution in the company’s shares. But that was before Canal+ increased its ownership to more than 35%.
MultiChoice Advised to Shareholders
MultiChoice said in a statement to shareholders on 28 February that “Shareholders are advised that the TRP issued a ruling on 27 February to the effect that Canal+ has acquired 35.01% of the voting rights in MultiChoice and, accordingly, a mandatory offer in terms of section 123 of the Companies Act has been triggered.”
Canal+ is compelled by the regulations to notify MultiChoice shareholders of their “firm intention announcement.” TechCentral revealed last week that the offer price has to be at least the greatest amount Canal+ has paid for MultiChoice shares in the previous six months. As per Section 111(2) of the Companies Regulations, a supplement to the Companies Act.
However, if the party making the offer Canal+ feels that the highest-price-paid principle is not relevant in a specific situation, then regulation 111(3) permits departures from the highest-price-paid principle. The regulations state that an offeror may consult the [TRP], which is free to accept an amended offer consideration if it is suitable in the given situation.
The South African Broadcasting Group’s Share Price Surged
Since 2020, Canal+ has been gradually acquiring MultiChoice’s stock. The South African Broadcasting group’s share price surged above R120/share during a significant portion of that period. But over the past year, the price has fluctuated, falling from a high of almost R150/share in February 2023 to a low of R63.21/share in November of last year.
The maximum amount Canal+ paid for MultiChoice shares in the previous six months is unknown, but based on historical share price data, the value must be at least R63 to R92 per share, which is significantly less than the R105 per share that the French broadcaster has stated it is willing to pay shareholders to close a deal.
Canal+ is Not Free to Break Out of the Agreement
For the mandatory offer to be successful, fifty percent of the voting rights in MultiChoice apart from those held by Canal+, which are believed to be capped at twenty percent must concur. Canal+ is not free to break out of the agreement if that doesn’t happen.
However, if the proposal is approved by shareholders, rules capping foreign organizations’ voting influence over South African broadcasting licensees at 20% may still prevent Canal+ from acquiring MultiChoice. The Electronics Communications Act includes this restriction.
“Will continue to act in the best interests of the company and its shareholders,” MultiChoice’s board stated on Monday. Shortly after 10 a.m. on Monday, shares of the broadcaster were trading hands on the JSE for R105.40 apiece.
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