Big changes for DStv owner
DStv owner Multichoice has confirmed to shareholders that it has started the major reorganisation process to enable the Canal+ takeover.
The group said that the agreements necessary to implement the reorganisation have now become unconditional and that the implementation of the various steps of the process will now start.
“As previously advised, the reorganisation is to be undertaken in order to enable the implementation of Canal+’s Mandatory Offer for Multichoice, and forms part of the conditions imposed by the South African Competition Tribunal when approving the Mandatory Offer,” it said.
The mandatory offer is Canal+’s move to acquire all the issued ordinary shares of MCG not already owned by the group, excluding treasury shares, from MCG shareholders for a consideration of R125.00 per share, payable in cash.
The South African Competition Tribunal approved the proposed transaction, subject to agreed conditions, in July 2025.
As the parties previously disclosed, the agreed conditions include a robust package of guaranteed public interest commitments.
The package supports the participation of firms controlled by Historically Disadvantaged Persons (HDPs) and Small, Micro and Medium Enterprises in the audio-visual industry in South Africa.
This package will also maintain funding for local South African general entertainment and sports content.
The reorganisation process will see Multichoice adopt a takeover structure, which will ensure it meets the requirements of all applicable laws, such as restrictions on foreign ownership and control of South African broadcasting licences.
The structure includes Multichoice (Pty) Ltd (previously referred to as ‘LicenceCo’), which contracts with South African subscribers, being carved out of the Multichoice Group and becoming independent.
The Multichoice/Canal+ group would own 49% of this company, with 20% voting rights, aligning with regulatory restrictions on foreign control of licences.
The rest of the control of LicenceCo will be held by various groups, including Phuthuma Nathi Investments Limited, 13th Ave Investments Proprietary Limited, Identity Partners Itai Consortium Proprietary Limited (IPIC) and the Multichoice Workers Trust.
These groups entered into several transaction agreements on 1 August to achieve this.
Under the agreements, the groups will subscribe to various classes of shares in LicenceCo, giving different economic and voting interests.
The group said that an updated timetable for the offer will be published once the implementation of the reorganisation has been concluded.
Impact on subscribers
As the group undergoes the reorganisation and eventual takeover, the good news for subscribers is that they won’t be impacted by the changes, and may even see benefits down the line.
Multichoice has long maintained that customers shouldn’t be impacted by the transaction, even though the group’s structure will fundamentally change.
However, the takeover should result in better content and technology from the combined entities, it said, which should be a long-term benefit.
Notably, the group cannot afford any negative disruptions to users during this time, as it continues to grapple with declining subscriber numbers in its core bases.
Reporting its results for the full year ending 31 March 2025, the group recorded a total of 14.5 million subscribers.
This includes 7 million subscribers in South Africa and 7.5 million in its Rest of Africa segment.
However, this is 8% lower than its reported base in 2024, where it had 15.7 million subscribers.
According to the group, it lost 589,000 subscribers in South Africa and another 591,000 subscribers in Rest of Africa.
The loss of subscribers has also reflected in a lower average revenue per user (ARPU). Blended ARPU was down 3% to R222 per subscriber from R229 previously.
The group is banking on the Canal+ takeover to turn this fortunes around.
Multichoice CEO Calvo Mawela previously said that support from Canal+ would create a media powerhouse with close to 50 million subscribers in English- and French-speaking Africa.
The larger scale would also help Multichoice take on the global streaming giants that effectively ended the group’s monopoly in South Africa.
Mawela also believes the deal with Canal+ will help it strengthen its bargaining power to secure better content deals, which are a massive cost for the group.
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