Multichoice gives Canal+ takeover the thumbs-up – but there’s a big catch

 ·4 Jun 2024

A MultiChoice independent board has recommended that shareholders accept a takeover offer from Canal+, but the groups still have major regulatory hurdles to overcome.

In a joint circular, the board said that the offer consideration of R125 per share is fair and reasonable and recommended that shareholders accept it once it becomes unconditional.

However, that point has not yet been reached, as the deal is still conditional on obtaining the approval of several government authorities inside and outside of South Africa. Canal+ and MultiChoice are in the process of assessing and finalising a possible reorganisation.

Shareholders have until 22 April 2025 to trade in MultiChoice Shares to participate in the offer. The timelines set out by the circular can be found below:

“In the circumstances, the Independent Board recommends that, in the event that the offer becomes unconditional, MultiChoice Shareholders accept the offer.”

Canal+ has been attempting to purchase MultiChoice since the start of the year, with its opening bid of R54 billion rejected.

However, it then increased its shareholding in MultiChoice to over 35%, meaning that it had to make an offer to buy the rest of MultiChoice. The French broadcaster has since increased its shareholding to 45.2%.

The group is also working on a way around South Africa’s foreign broadcast restrictions. The Electronic Communications Act prevents foreign entities from holding over 20% of a South African broadcaster’s voting rights.

The groups will have to spend the next year trying to find some way around this.

“In light of the duty on Canal+ to make a mandatory offer for the MultiChoice Shares, Canal+ and MultiChoice are in the process of assessing and finalising suitable structuring options and potential transactions, which may be undertaken by the MultiChoice Group on or shortly before the Closing Date to ensure compliance with the applicable limitations on foreign control while also maintaining MultiChoice’s BBBEE credentials.”

The joint circular can be found below (mobile users can click here):

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