Independent board approves Canal+ offer for MultiChoice

French pay-TV company Canal+ is edging closer to fully acquiring South African pay-TV and streaming company MultiChoice Group.

This is after an independent board – set up by MultiChoice and reviewed by Standard Bank – found that the latest 125 South African rand (US$6.60) per share offer by French pay-TV company Canal+ is 'fair and reasonable' to MultiChoice shareholders.

In a statement issued via the Johannesburg Stock Exchange (JSE), the two companies told shareholders that the independent board had recommended shareholders accept the offer once it becomes unconditional.

In February 2024, South Africa's Takeover Regulation Panel ruled that Canal+ must make a mandatory offer to MultiChoice's minority shareholders to buy out the company, after acquiring more than 35% of the company on the open market.

This week's announcement is the next step mandated by the Takeover Regulation Panel.

Shareholders have until April 22, 2025, to trade in MultiChoice shares to participate in the offer.

Canal+ MultiChoice regulatory pitfalls

There is still no clarity on how the two entities aim to navigate regulatory restrictions by the Electronic Communications Act (ECA), which forbid foreign companies from holding more than 20% of the voting rights of a South African broadcaster.

Canal+ has been attempting to purchase MultiChoice since the beginning of the year.

In early February, Canal+ offered R105 ($5.50 at the time) per MultiChoice ordinary share – which represented a 40% premium on MultiChoice's closing share price on the JSE of R75 ($3.13) on January 31, 2024 – but MultiChoice believed the offer significantly undervalued the company and rejected the offer.

Canal+ has been trying to purchase MultiChoice since the beginning of the year, but the deal still has regulatory hoops it needs to jump through. (Source: Image by Freepik)

That led to the French pay-TV firm making a mandatory offer to MultiChoice shareholders to take up all the shares that it does not already own in March.

In April, Canal+ grew its shareholding to 40.1%. A week later it bumped it up to 40,83%, and as of May, the company holds 45.2% of MultiChoice.

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Even without clarity on the ECA matter, the two companies put out a joint circular saying that they were respectful of all applicable laws and regulations relating to the sectors in which they operate.

"In this regard, each of Canal+ and MultiChoice have agreed that it shall in good faith cooperate and collaborate with the other in finalizing the necessary components of the Possible Reorganization," the notice added.

*Top image source: Canal+.

— Matshepo Sehloho, Associate Editor, Connecting Africa