Canal+ has declared its submission of a non-binding indicative offer to acquire South African pay-TV giant MultiChoice for approximately R31.7 billion. The announcement, made on Thursday, outlined Canal+'s proposal to purchase all outstanding ordinary shares of MultiChoice, contingent upon obtaining regulatory approvals. The offer stands at R105 per ordinary share, presenting a 40% premium to MultiChoice's closing share price of R75 on January 31, 2024.
In its most recent annual report, MultiChoice disclosed that Canal+ currently owns 140,160,277 of its 442,512,678 issued shares. The cost of acquiring the remaining shares would amount to nearly R31.75 billion. Canal+ pursued a gradual takeover strategy over the past four years, steadily acquiring MultiChoice shares until holding over 30% of the company. Concerns regarding potential violations of South Africa's Electronic Communications Act were raised, but MultiChoice refuted them, citing its memorandum of incorporation, which limits foreigners' voting rights to 20%.
Canal+ envisions that the acquisition would elevate MultiChoice into a globally significant media company. The lack of scale at MultiChoice is deemed an "acute problem" by Canal+, and the success of this deal is seen as crucial. Canal+ plans to conduct confirmatory due diligence before delivering a firm intention letter to the Independent Board, although uncertainties remain about the deal's progression and terms.
Canal+ affirmed its commitment to adhering to South African media sector laws and regulations, stating that any firm intention letter would consider these obligations. Additionally, Canal+ is actively preparing for its listing following the unbundling announcement of its parent company, Vivendi, with a goal of obtaining a listing in South Africa.
The company expressed its ambition to create an African media business with enhanced scale, emphasizing the need for scale to survive and thrive in the globalized and competitive media industry. Canal+ highlighted the potential combination with MultiChoice as a means to secure a long-term path for the company, asserting that lack of scale may jeopardize MultiChoice's status as the leading media company in Africa.
Canal+ reassured its commitment to South Africa's creative industry, local sports, and Broad-Based Black Economic Empowerment (B-BBEE). The company emphasized its dedication to being "best-in-class" in terms of B-BBEE and the participation of historically disadvantaged groups.
Canal+ Chairman and CEO Maxime Saada emphasized their long-term investment in MultiChoice and South Africa, expressing pride in their active involvement in Africa's media sector for 30 years. Saada highlighted the potential for combined resources to invest in scale, local talent, and technology, enabling MultiChoice to compete with global streaming media giants and succeed in Africa. Canal+ underscored its commitment to commissioning African content, supporting local production companies, and contributing to the success of MultiChoice as Africa's leading media company.
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