By Adedapo Adesanya
French media company, Canal+, has made a mandatory offer to buy all the shares of South African broadcaster, MultiChoice, for around 55 billion Rand ($2.9 billion), a statement on Monday confirmed this.
The new offer price is almost 67 per cent higher than the MultiChoice share price just before its first offer of 105 Rand per share was rebuffed by the Multichoice board as too low in February.
The deal, if achieved, would create a pan-African broadcasting powerhouse able to put African content to global audiences as well as compete on an international scale.
The French media company has a broad reach in French-speaking African nations, while MultiChoice has a stronger presence in English-speaking countries, including South Africa, Nigeria and Kenya. Last month, it acquired a stake in Senegalese internet broadcaster, Marodi.
MultiChoice also chose Standard Bank as an independent expert to give an opinion on the offer, agreeing to cooperate in ensuring its implementation.
Canal+ operates in 50 countries across Europe, Africa and Asia, directly serving 8 million customers in Africa. It had about 25 million subscribers as of its 2023 year, while MultiChoice had 23.5 million. Both have serious ambitions for Africa and have acknowledged that scale is necessary to take on US giants such as Disney and Netflix.
“Canal+’s ambition is to build a global entertainment leader, with Africa at its heart, combining scale, complementary geographies, integrated and international reach with strong local roots, that will support the commercial development of Africa’s sporting and cultural industries and take leading and authentic African stories to a global audience,” it said on Monday.
“This long-term vision has its foundation in Canal+’s extensive and successful 30-year history of investing in African creative and sports broadcasting markets.”
Vivendi, the parent company of Canal+, is also currently undertaking a feasibility study for the proposed split of the company into several separately listed entities, first announced in December.
Should a planned European listing proceed, there will be an opportunity for South African investors to become shareholders of the combined entity as part of a secondary inward listing on the Johannesburg Stock Exchange (JSE), the company said.
Canal+ added on Monday it understood the imperative of broad-based black economic empowerment, and upon implementation, it intends to support MultiChoice in its continued efforts of transformation of its South African business. This is usually also a condition imposed by SA’s competition regulators, whose approval is required, while a circular for the offer will be released in due course.
Complicating matters had been SA laws that place limitations on foreign ownership of local broadcast licences. This means Canal+ can increase its shareholding in MultiChoice to any level, but its voting rights are limited to a maximum of 20 per cent.
Canal+ also increased its stake in the group to over 35 per cent, which is a threshold that triggers a mandatory offer.
However, given the voting cap, the South African Takeover Regulation Panel was then asked to make a ruling, finding in February that Canal+ must. Following an extension, it was given until 8 April to make its mandatory offer.
MultiChoice has also granted exclusivity to Canal+, which entails not engaging with other competing parties. However, should a better, unsolicited proposal be received, Canal+ will have the opportunity to revise its offer.
“Following constructive engagement with MultiChoice, we are pleased to have issued a joint firm intention announcement to make an offer today, representing a significant premium for the shareholders of MultiChoice,” Canal+ chair and CEO Maxime Saada said in a statement.
“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,” he said.
“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.”
