Adedapo Adesanya
By Adedapo Adesanya
Multichoice has turned down the $2.5 billion acquisition offer by French media company, Canal+.
The company disclosed this in a notice to its shareholders on Monday.
Multichoice said it turned down the acquisition offer because the R105 per share being proposed by Canal+ undervalues the company.
“After careful consideration, the board has concluded that the proposed offer price of R105 in cash significantly undervalues the group and its prospects. The board has reached this conclusion taking into account all relevant considerations, including the following:
“MultiChoice has recently conducted a valuation exercise, which has valued MultiChoice significantly above R105 a share.
“MultiChoice’s valuation excludes any potential synergies which may arise from the envisaged transaction.”
“In this regard Canal+ has, following the lengthy discussions between the parties, repeatedly conveyed to the public what it sees as the advantages of the combined entity and therefore seemingly takes the view that there are significant synergies. These synergies need to be factored into any fair offer made by Canal+” Multichoice added.
The group, owned by Vivendi, announced last Thursday that it had submitted an offer to acquire the South African Pay TV company, which owns DSTV.
Canal+ is currently the top shareholder in MultiChoice with a 31.67 per cent stake and is seeking full control and the drawback will likely see the company push to increase its stake.
South African regulatory law says a 35 per cent ownership will require the French broadcaster to make a mandatory offer to Multichoice shareholders.
The company’s board noted that while it is open to all means of maximizing shareholder value, it has conveyed to Canal+ that – at this proposed price – the letter does not provide a basis for further engagement.
“Caution is accordingly no longer required to be exercised by shareholders when dealing in their securities. In keeping with its duty to act in the best interests of the company, the board remains open to engaging with any party in respect of any offer which is for a fair price and is subject to appropriate conditions.
“Moreover, it goes without saying that the Board will continue to act in accordance with its duties in the applicable provisions of the Takeover Regulations regarding any formal and binding offer,” the company added.
