Safeguarding its interests, MultiChoice Group, Africa’s largest pay-TV company, has rejected a non-binding acquisition offer from Canal+, the French pay-TV giant owned by Vivendi SE.
The rejection comes after Canal+ proposed a premium bid to acquire MultiChoice at R31.7 billion ($1.6 billion), to expand its global footprint and bolster MultiChoice’s international presence.
Canal+’s offer, announced on Thursday, proposed acquiring MultiChoice shares at 105 rand ($5.55) each, representing a 40% premium over MultiChoice’s closing share price of 75 rand on January 31. Despite the allure of the premium bid, MultiChoice’s board concluded that the offer undervalues the company and its future prospects.
In a statement released to the Johannesburg Stock Exchange, MultiChoice affirmed its decision, asserting that the proposed offer price fails to adequately reflect the true value of the group, particularly when considering its potential for future growth and synergy opportunities. While the board remains open to maximizing shareholder value, it made clear that Canal+’ offer does not provide a basis for further engagement at the proposed price point.
Canal+, which currently holds a 31.67% stake in MultiChoice, escalated its stake to 35.01% following the offer announcement, prompting MultiChoice to request the Takeover Regulation Panel to adjudicate whether a mandatory offer should be extended to all ordinary shareholders in compliance with the Companies Act.
Analysts speculate that Canal+ may not interpret MultiChoice’s rejection as an indication to abandon its pursuit, especially considering its persistent efforts to increase its stake in the company since 2020. With Vivendi’s familiarity with hostile takeovers and the complexities involved, Canal+ could pursue alternative strategies to bolster its position in MultiChoice.
Per South African regulations, any stake exceeding 35% would necessitate Canal+ to make a mandatory offer to MultiChoice shareholders, potentially catalyzing further developments in the unfolding situation.
