French Canal+ Group’s operation to take full control of African media and entertainment giant MultiChoice appears to be moving forward with both parties announcing they had finalized the terms of the mandatory offer in a joint statement on Monday.
Paris-based Canal+ Group, which currently holds a 36.6% in the company, has officially confirmed a second mandatory offer of 125 South African Rand per share for the MultiChoice’s remaining shares, which was first posted on March 5.
This is significantly above its initial offer of 105 South African rand per share on February 1.
The need to make a mandatory offer was triggered by Canal+, MultiChoice’s biggest shareholder, raising its holding in the firm above the 35% threshold.
Canal+ and MultiChoice said that they had entered a cooperation agreement regarding the offer. In further details, Canal+ said it would pay for the stake out of its own funds and would not be obliged to borrow to make the acquisition.
The parties added that the deal represented a 66.66% premium to the closing price of 75 South African Rand on January 31, 2024, which was the last trading day prior to Canal+’s first non-binding Indicative offer.
“Following constructive engagement with MultiChoice, we are pleased to have issued a joint firm intention announcement to make an offer today, representing a significant premium for the shareholders of MultiChoice,” said Canal+ Group Chairman and CEO Maxime Saada.
“Canal+ is confident in making this offer, at a level which exceeds the minimum required by regulation, due to the incredible future we believe that Canal+ and Multichoice can build together.”
The announcement does not mean the acquisition is a done deal and the group still has to navigate South African rules limiting foreign ownership of local commercial broadcasters, but it is a move in the right direction.
In a nod to concerns over ownership, the joint statement said that both partners recognized that the economic transformation of South Africa and Broad Based Black Economic Empowerment (BBBEE) were are imperatives both in the wider context and for MultiChoice
“Canal+ intends to support MultiChoice in its continued efforts to foster BBBEE initiatives and the
transformation of its South African business as a commercial and societal imperative,” read the statement.
Created in the early 1980s, with backing from South African technology giant Naspers, MultiChoice currently has some 20 million subscribers across Africa. The Canal+ Group started building a position in MultiChoice in 2020.