South African pay-TV giant Multichoice has officially rejected a buyout offer from French media group Canal+. The offer, valued at approximately R30 billion ($1.6 Billion), was deemed “significantly undervalued” by the Multichoice board.
The French media giant Canal+ has submitted a formal bid to acquire South African pay-TV leader MultiChoice subject to regulatory approvals. Canal+ already owns 30% of MultiChoice, acquired through a gradual “creeping takeover” strategy. Concerns about possible violations of South Africa’s foreign ownership regulations had been raised, but MultiChoice clarified these concerns.
Key details of the offer:
- Price: R105 per ordinary share, representing a 40% premium over MultiChoice’s closing share price on January 31, 2024.
- Motivation: Canal+ believes a merger would create a global-scale media company, addressing concerns about MultiChoice’s future competitiveness.
- Conditions: The offer depends on regulatory approvals and adherence to South African media and stock exchange regulations.
- Canal+’s position: They emphasize their commitment to South African laws, Black Economic Empowerment initiatives, and supporting local sports and creative industries.
Multichoice Stands Firm on its Value
Multichoice highlighted its strong financial performance and future growth prospects in a statement. The company emphasized its “robust content offering, loyal customer base, and significant expansion opportunities across Africa,” factors it believes were not adequately reflected in the proposed offer price.
“After careful consideration, the Board has concluded that the proposed offer price of R105 in cash significantly undervalues the Group and its future prospects”
“While the Board is open to all means of maximising shareholder value, it has conveyed to Canal+ that – at this proposed price – the letter does not provide a basis for further engagement”
Industry Implications and Future Outlook
The rejection of Canal+’s offer has significant implications for the African media landscape. The deal, if successful, would have created a major media powerhouse with a dominant presence across the continent. However, with Multichoice opting out, the future of both companies and the broader industry remains uncertain.
