French media giant Canal+ makes offer to buy DStv owner MultiChoice.
By Lehlohonolo Lehana.
France's Canal+ Group, which has in recent years been buying up a significant stake in JSE-listed MultiChoice Group on the open market, is now moving to take control of the South African pay-television group.
In a statement released on Thursday (01 February), Canal+ has confirmed that it submitted a letter to the Board of Directors of MultiChoice.
The letter contained a non-binding indicative offer to acquire all of the issued ordinary shares of MultiChoice that Canal+ does not already own.
However, this offer is subject to obtaining the necessary regulatory approvals.
Subject to certain confirmations that Canal+ expects following further engagements with MultiChoice, Canal+ anticipates its offer to be for a cash consideration of R105 per MultiChoice ordinary share, which would represent a premium of 40% to MultiChoice’s closing share price of R75 on 31 January 2024, noted media house.
For three years, Canal+ has been a supportive major shareholder in MultiChoice, having grown its investment to become the company's largest shareholder.
"For MultiChoice to continue to thrive in Africa, it will require a strategy that enhances its scale as well as strengthens local and global expertise, "said Chairman and CEO of Canal+ Maxime Saada.
"Our Potential Offer, if successful, would be an important next step for MultiChoice to realise its full potential.
"Combined with Canal+, MultiChoice would have the resources to invest in scale, local African talent and stories, and best-in-class technology to allow it to grow in Africa and compete with the global streaming media giants.
"We are steadfast in our belief that MultiChoice could enjoy a bright future as part of a combined group with Canal+," he added.
Canal+ noted that upon the satisfactory completion of a confirmatory due diligence, Canal+ intends to deliver a firm intention letter to the Independent Board.
"At this stage, there can be no certainty about the progression of the Potential Offer, nor the terms of any transaction that may occur," it said.
"Canal+ is respectful and observant of all laws and regulations relating to the South African media sector and companies listed on the Johannesburg Stock Exchange.
"Any firm intention letter submitted would be mindful of the obligations that Canal+ would have in this regard," it added.
The offer from Canal+ to buy MultiChoice came after it bought a large stake in the DStv owner through the open market.
Over the four years, Canal+ gradually increased its stake in MultiChoice – from 6.5% in October 2020 to well over 30%.
In February 2023, MultiChoice announced that French media company Groupe Canal+ SA had increased its stake in the company to 30.27%.
Since MultiChoice first announced Groupe Canal+ was buying a large number of shares, the share price has traded relatively flat.
Canal+ was, therefore, able to increase its exposure to MultiChoice without needing to pay a premium on the DStv provider's market value. Canal+, therefore, used a creeping takeover tactic to slowly acquire a significant portion of MultiChoice.