By Lehlohonolo Lehana.
French television broadcaster Groupe Canal+ has been given an extra 25 days to make a mandatory offer to shareholders of JSE-listed MultiChoice Group.
Multichoice disclosed this in a statement to shareholders on Monday, in which it said that the Takeover Regulation Panel (TRP) has granted Canal+ an extension until 8 April to make the enforced offer.
This comes after the TRP ruled that Canal+, after having bought more than 35% of MultiChoice’s shares, had triggered the threshold under South African law that required it to make the mandatory offer.
MultiChoice’s board had on 5 February spunned the Canal+ indicative offer of R105/share and told its shareholders that they no longer had to exercise caution in trading in the group’s shares. But that was before Canal+ upped its stake to beyond 35%.
As per the Companies Act of 2008 and JSE Listings Requirements, a mandatory offer must be made after the 35% threshold is breached.
MultiChoice thus approached the TRP to make a decision.
Despite being issued a compliance notice for the public manner in which it approached the TRP, MultiChoice still got its answer, in that Canal+ will have to make a mandatory offer.
In the latest development, the TRP has granted an extension to Canal+ of 25 business days, until 8 April 2024, to make the required mandatory offer.
It is unclear what the highest price is that Canal+ paid for MultiChoice shares in the last six months, but from historical share price data, the value must be a minimum of between R63/share and R92/share – well below the R105/share the French broadcaster has said it is prepared to pay shareholders to secure a deal.
Fifty percent of the voting rights in MultiChoice, other than those held by Canal+ (understood to be capped at 20%), must agree for the mandatory offer to succeed. Barring that, Canal+ is not at liberty to back out of the deal.
But even if the deal gets approval from shareholders, Canal+’s efforts to acquire MultiChoice could still be stymied by legislation that caps voting control of South African broadcasting licensees by foreign entities at 20%. This restriction is contained in the Electronics Communications Act.