DStv owner going through major restructuring
Multichoice is pushing ahead with a significant restructuring as part of its potential takeover from French giant Canal+.
Canal+ has offered to purchase Multichoice for a deal worth around R55 billion, and already owns 45% of the South African broadcaster.
As per the deal, Multichoice is trying to navigate international ownership laws, with Section 64 of the Electronic Communications Act (ECA) restricting international ownership of local licences at 20%.
To get around this, Multichoice aims to branch out an independent company, ‘LicenceCo’ to house the broadcasting licences, which will be minority owned by the Multichoice/Canal+.
The merged group will ultimately hold 49% of the economic interest in the company, but only 20% of the voting rights, as per the ECA restrictions.
The rest of the control on 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 Class A shares will have full economic rights from the outset, whilst the Class B Shares and the Class C shares are notional vendor-funded (NVF) shares which entitle the holder to a “trickle” dividend of 20% and 35%, respectively.
Classes B and C shares will continue to receive dividends until the NVF balance is reduced to zero, after which they will become ordinary shares with full rights.
Phuthuma Nathi will subscribe for R3.8 billion of Class A Shares, and each 13th Avenue and IPIC will subscribe for their respective Class A Shares for R287 million.
Multichoice South Africa will declare a further extraordinary dividend to its shareholders, Phuthuma Nathi and Multichoice, of R1.375 billion, R343.75 million of which is attributable to Phuthuma Nathi.
| Shareholder | Class of Shares | Economic Interest | Voting Percentage |
|---|---|---|---|
| Multichoice | Ordinary Shares | 49% | 20.00% |
| PN | Class A Shares | 17.2% | 39.00% |
| Class B Shares | 9.8% | ||
| 13th Avenue | Class A Shares | 1.3% | 16.23% |
| Class B Shares | 8.2% | ||
| IPIC | Class A Shares | 1.3% | 16.23% |
| Class B Shares | 8.2% | ||
| Workers Trust | Class C Shares | 5.0% | 8.54% |
Moreover, Phuthuma Nathi currently holds an indirect shareholding in Orbicom, held via the group’s 25% shareholding in Multichoice South Africa.
Orbicom is the licensed signal distributor and holder of electronic communications and radio frequency spectrum licences.
The reorganisation contemplates that Phuthuma Nathi subscribing for 20% of the ordinary shares in Orbicom at the nominal value. This will increase its effective shareholding in Orbicom from 25% to 40%.
The reorganisation for Multichoice will result in 26% of the economic interest in LicenceCo and 15% of the economic interest in Orbicom being disposed of.
The audited net asset value of LicenceCo and Orbicom as at 31 March 2025 is R11 billion and R152 million, respectively.
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