MultiChoice rejects Canal+’s $1.6 billion offer and citing undervaluation in the process as the reason behind it. the board also expressed their willingness to engage further with any party in regard to offers that are in the fair range and also subject to appropriate conditions.
MultiChoice Rejects Canal+’s Offer
Last Thursday, Canal+ announced its intention to acquire MultiChoice by making a non-binding indicative offer valued at R105 ($5.6) per share, which is 40% higher than MultiChoice’s closing share price of R75 ($4) on January 31, 2024. This offer places MultiChoice’s valuation at over R46 billion ($2.4 billion). Under this proposal, Canal+, which currently holds a 35.01% stake in MultiChoice, would pay approximately R32.5 billion ($1.7 billion) in cash to acquire the remaining 64.99% stake in the company that it does not already own.
MultiChoice has this to say: “The delivery of the Canal+ letter [to the board making the offer] took place after discussions between Canal+ and MultiChoice lasting for well over a year. Following the delivery of that letter, Canal+ and its representatives have extensively discussed their proposal in public and with members of the press.”
MultiChoice’s Response to Canal+’s Acquisition Proposal
MultiChoice, the South African owner of DStv and GOtv, has responded to Canal+’s acquisition proposal by stating that the offer price does not warrant further engagement, though the company remains open to exploring options that would maximize shareholder value. Despite this stance, MultiChoice has committed to adhering to the Takeover Regulations should a formal and binding offer be presented.
The Acquisition Faces Regulatory Hurdles
The acquisition faces regulatory hurdles, notably the South African Electronic Communication Act of 2005, which limits foreign ownership in commercial broadcasting licenses. This legislation restricts foreigners from controlling or owning more than 20% of a commercial broadcaster’s voting shares or paid-up capital, posing a significant challenge to Canal+’s acquisition efforts.
Canal+ Reactions to the Concerns
Canal+ has addressed these concerns by affirming its compliance with South African laws and regulations relevant to media companies and those listed on the Johannesburg Stock Exchange (JSE), indicating its readiness to navigate the regulatory landscape to advance the acquisition.
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