The proposed acquisition of MultiChoice by French media company Canal+ is progressing, with the details of the deal outlined in the combined offer circular provided to MultiChoice shareholders.
This document sheds light on the steps taken, the financial backing, and the strategic intentions behind the acquisition.
On April 8, 2024, Canal+ formally announced its intention to acquire the shares of MultiChoice it did not already own, offering a consideration of ZAR 125.00 per share. This offer was significantly higher than the initial non-binding indicative offer (NBIO) of ZAR 105.00, which the MultiChoice Board had previously deemed insufficient . The increase to ZAR 125.00 per share came after extensive negotiations between the senior representatives of Canal+ and MultiChoice.
Canal+ currently holds approximately 45.2% of MultiChoice’s total issued ordinary shares, a position strengthened by acquisitions leading up to the formal offer. The acquisition aims to buy out the remaining shares, thereby consolidating Canal+’s control over MultiChoice.
The offer is backed by a robust financial guarantee. Canal+ has secured a bank guarantee from JPMorgan Chase Bank, N.A., Johannesburg Branch, ensuring the availability of ZAR 35.37 billion to cover the offer consideration.
The acquisition aligns with Canal+’s strategic intent to expand its influence in the broadcasting sector. However, the deal must navigate South African regulations that limit foreign control of commercial broadcasting services. To comply with these regulations, both parties are considering several structural options, such as corporate reorganizations and mechanisms to limit voting rights of foreign entities .
Moreover, Canal+ has expressed its commitment to maintaining MultiChoice’s Broad-Based Black Economic Empowerment (BBBEE) credentials, a critical factor in the South African business landscape. This includes continuing efforts to foster BBBEE initiatives and recognizing the role of Phuthuma Nathi Investments in this regard.
The MultiChoice Board has shown support for the acquisition, with the establishment of an Independent Board to review the offer’s terms and ensure they are fair and reasonable. This board, along with an Independent Expert, will provide an opinion on the offer, ensuring transparency and protecting shareholder interests.
Shareholders have been advised on the procedural aspects of accepting the offer, with specific instructions on the surrendering of shares and the limitations on trading during the offer period . Additionally, incentive award holders within MultiChoice are permitted to sell their shares, contributing to the liquidity and attractiveness of the offer.
The process is being closely managed to comply with regulatory requirements and ensure fair treatment of all shareholders.
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