South African regulator orders Canal+ to bid for the remaining MultiChoice shares. According to the ruling, ““Canal+ must take immediate action to comply with the requirements of.. the (Companies) Act and the regulations by making a mandatory offer to the remaining shareholders of MultiChoice.”
Canal+ to Bid for the Remaining MultiChoice Shares
The regulator has determined that Multichoice’s public announcement of the initial offer was illegal and issued a compliance notice to the South African company. This decision comes in response to the panel’s reaction to the open discussion about a potential takeover between Canal+ and MultiChoice.
On February 6, the panel acknowledged receiving communications and announcements from both companies. However, it declined to endorse or approve the developments, stating that ongoing discussions with the two companies are aimed at providing advice and guidelines on handling the situation.
The Deal’s Obligation and Responsibility to Maintain Market Integrity
The Panel reaffirmed its commitment to taking the matter seriously, emphasizing that the investigation aims to ensure that both parties fulfill their overarching obligation and responsibility to maintain market integrity and ensure fairness for holders of MultiChoice’s securities.
On February 1, Canal+ revealed its intentions to acquire the South African pay-TV service by submitting a non-binding indicative offer of R105 ($5.6) per share. This offer represents a 40% premium compared to MultiChoice’s closing share price of R75 ($4) on January 31, 2024.
The Valuation of MultiChoice
The valuation of MultiChoice through the offer exceeds R46 billion ($2.4 billion), with the proposal suggesting payment of R32.5 billion ($1.7 billion) in cash for the remaining 64.99% stake. Currently, French media owns a 35.01% stake in MultiChoice.
In response, MultiChoice rejected Canal+’s proposal, stating it undervalued the company. However, the board expressed willingness to continue discussions with any party offering a reasonable price and subject to suitable terms.
Canal+ Has Encountered Challenges with This Transaction
Canal+ has encountered challenges with this transaction due to the South African Electronic Communication Act 2005, which prohibits foreigners from directly or indirectly controlling a commercial broadcasting license or owning more than 20% of a commercial broadcasting licensee’s voting shares or paid-up capital.
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