Canal+ raises its holding in MultiChoice to 42.47%

The takeover regulation panel has granted MultiChoice and Canal+ an extension to distribute a combined circular to shareholders outlining details of the French group’s bid to take over Africa’s largest pay TV group.

This comes as Canal+ increased its holding in MultiChoice to 42.47% as the French media group buys more shares, underlining its intent to take control of MultiChoice.

The company said in a statement on Thursday that it had acquired in on- and off-market transactions, a further 3.87-million MultiChoice shares, and the transactions had been disclosed to SA’s takeover regulation panel.

On the same day, the two companies revealed that the panel had given them an extension to June 4 to release a circular. This had been initially expected on May 7, being 20 business days from the date of the firm intention announcement made in early April. 

The takeover regulation panel requires a combined circular to shareholders in takeover situations to provide all relevant information and ensure informed decision-making by shareholders. It outlines details of the offer, including reasons behind it, terms for shareholders, and potential implications.

In a joint statement, the companies said they had asked for the extension “to allow the independent expert and the independent board enough time to properly fulfil their responsibilities”.

The French broadcast group has been aggressively buying up shares for almost four years after it started building its stake with an initial purchase of 6.5% in October 2020.

At the beginning of February, the Paris-based company made an offer to buy the rest of the company at R105 a share, or just more than R31bn, in what would have been the biggest M&A deal in SA so far in 2024.

The DStv owner snubbed the offer as too low for the business and its prospects, even though it is at the top end of the target price range that analysts and brokers have for the stock. Canal+ then raised its offer to R125 per share on March 5. 

A day later, Canal+’s stake had grown to 35.01%, triggering a mandatory offer according to rules set by the takeover regulation panel.

On April 8, Canal+ and MultiChoice said they had entered into a co-operation agreement regarding the proposed mandatory offer. 

In early April, Imtiaz Patel stepped down as chair of MultiChoice. This came almost three weeks after the group said Patel would remain as chair until the conclusion of the Canal+ transaction. The group said the proposed transaction “has now shifted to the next phase”, given these developments and the constituting of an independent board to assess the deal.

Therefore “the board and Mr Patel have agreed that now would be an appropriate time for Mr Masilela, the current deputy chair, to be appointed as chair as planned and for Mr Patel to step down from the board”.

Patel will continue his involvement with the group as a consultant.

When the pay-TV subsidiary of media conglomerate Vivendi first took a position in MultiChoice, it said it was a long-term financial investment and demonstrated its confidence in the prospects of the company and of the African continent, its largest market outside its home market.

A few years later, Canal+ pitched the transaction as an opportunity to create an African media business powerhouse with operations in key markets on the continent, from SA and Nigeria to Senegal and Cameroon.

Other large MultiChoice shareholders include the Public Investment Corporation, M&G and Allan Gray.

MultiChoice’s share closed at R120.44 on Tuesday on the JSE.

Update: May 2 2024
This story has been updated with new inforamtion.

gavazam@businesslive.co.za
mackenziej@arena.africa