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Canal+ set for Multichoice takeover

A dramatically improved second offer sets the scene for the French broadcaster to buy Africa’s biggest pay-TV group.

Canal+, the French broadcaster that already owns 35% of Africa’s largest pay-TV group, Multichoice, has made a new offer to buy up the rest of the shares, after two previous offers were rejected.

Canal+, owned by Vivendi SE, announced yesterday that it had increased its offer to R125 a share, valuing the company at R33.7-billion, or $2.9-billion at the time of the offer. A previous offer had been rejected, prompting Canal+ to buy additional shares in the company at the beginning of February, taking its stake from 31.07% to 35.01%.

Previous attempts to buy Multichoice also stumbled over a regulatory requirement that does not allow a South African broadcaster to have more than 20% foreign ownership. However, the fact that Canal+ has been able to build up a shareholding of more than a third suggests it has been able to construct local ownership structures that act as local proxies for ownership. Market speculation is that South African billionaire Patrice Motsepe is a key player behind the scenes. This suggests it has found a way to overcome regulatory limitations.

“Following extensive engagement between senior representatives of Canal+ and MultiChoice, and in line with the timeline agreed with the Takeover Regulation Panel (TRP), Canal+ has finalised the key terms of its mandatory offer,” Canal+ announced yesterday.

It said both parties had announced that:

  • CANAL+ proposed a Mandatory Offer to acquire all the issued shares of MultiChoice Group not already owned by the group at a purchase price of ZAR125. 00 per Offer Share, payable in cash.
  • The Offer is significantly above the regulatory minimum price for the Mandatory Offer, which is approximately ZAR105.00.
  • MultiChoice and CANAL+ have entered into a cooperation agreement regarding the Offer.
  • The Offer will be fully funded by funds available to CANAL+. The TRP has been furnished with an irrevocable unconditional bank guarantee.
  •  In line with standard procedure and as set out in the FIA, MultiChoice has constituted an Independent Board, which has appointed Standard Bank as an independent expert to express a view on the fairness and reasonableness of the terms of the Offer.

The Offer will provide significant benefits to stakeholders, the companies said. These include:

  • MultiChoice shareholders will realise significant and attractive value, and crystalise this value in cash, for their Offer Shares, constituting a 66.66% premium to the closing price of ZAR 75.00 on 1 February 2024 – the last trading day prior to the delivery of CANAL+’s Non-Binding Indicative Offer.
  • MultiChoice will become part of a global entertainment leader, with Africa at its heart, which is capable of competing and cooperating with the largest international media companies, streaming platforms and studios.
  • The South African creative and sporting economy will be supported by a local champion with global reach, providing a stable foundation for long-term investment in the sector.
  • Consumers across Africa will benefit from an enhanced service and product offering, underpinned by technology solutions owned by the combined company.
  • CANAL+ will support MultiChoice in its continued efforts to foster B-BBEE initiatives and the transformation of its South African business.
  • CANAL+ is committed to ensuring that South African investors are able to benefit from the future growth of the combined business through a listing on the JSE.
  • It is the ambition of CANAL+ to build a global entertainment leader with Africa at its heart, combining scale, complementary geographies and international reach with strong local roots, that will support the commercial development of Africa’s sporting and cultural industries and take leading authentic African stories to a global audience.

Maxime Saada, Chairman and CEO of CANAL+ Group said: “Following constructive engagement with MultiChoice, we are pleased to have issued a joint firm intention to make an offer today, representing a significant premium for the shareholders of MultiChoice. CANAL+ is confident in making this offer, at a level which far exceeds the minimum required by regulation, due to the incredible future we believe that CANAL+ and MultiChoice can build together.

“Through combining our companies, we will be well positioned to invest even more in local productions and sports content, supporting the world-leading and vibrant creative ecosystem on the African continent and all over the world, and producing even more high-quality and compelling local stories. The complementary geographies, considerable scale, and strengthened capabilities achieved by the combination of these two great companies will ensure that Africa can tell her own stories on her own terms both locally and globally.

“We are excited about these opportunities, which will be supported by further investment in technology, including the continued offering of a leading satellite service, and rolling out more innovative streaming products.”

The companies said the offer would be conditional on customary regulatory conditions for a transaction of this nature, as outlined in the full announcement and will comply with all other relevant regulatory requirements.

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