SA's MultiChoice Group rejects Canal+ buyout offer

South African pay-TV and streaming company MultiChoice Group has announced that it will not continue talks with Canal+ after its board concluded that the French pay-TV company's offer significantly undervalues the company.

Last Thursday, Canal+ offered 105 South African rands (US$5.55) 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.

"The delivery of the Canal+ letter took place after discussions between Canal+ and MultiChoice lasting for well over a year. Following the delivery of that letter, Canal+ and its representatives have extensively discussed their proposal in public and with members of the press,” said MultiChoice in a statement via the Johannesburg Stock Exchange (JSE).

"After careful consideration, the Board has concluded that the proposed offer price of R105 in cash significantly undervalues the Group and its future prospects," the statement continued.

The company said it recently conducted a valuation exercise that valued the group at significantly more than R105 a share.

"Therefore, while the Board 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," the statement continued.

Furthermore, MultiChoice said in keeping with its duty to act in the best interests of the company, its board will remain open to engage with any party in respect of any offer that 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," it added.

Canal+ tightens its grip

Even though MultiChoice has rejected the buyout offer, Canal+ has increased its hold on the company.

In another statement via the JSE, MultiChoice has announced that Canal+ has bought 35.01% of its ordinary shares in issue, up from 31.7% last July.

"MultiChoice has filed the required notice with the Companies and Intellectual Property Commission. MultiChoice has also requested the TRP to make a ruling as to whether a mandatory offer must be made to all holders of ordinary shares in the Company. A further announcement will be released if there are further developments," the statement added.

MultiChoice's recent partnerships

MultiChoice has in recent times partnered with other major industry players. In March 2023, it partnered with US-based Comcast's NBCUniversal and UK-based Sky to create a pan-African streaming service. Under the deal, 70% of the new Showmax is owned by MultiChoice and 30% by NBCUniversal and powered by Peacock's globally scaled technology.

That partnership led to the companies relaunching MultiChoice's streaming video entertainment offering Showmax and committing to investing heavily in the platform.

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*Top image source: Image by DC Studio on Freepik

— Matshepo Sehloho, Associate Editor, Connecting Africa