Canal+ Group from France, having steadily acquired a notable stake in the JSE-listed MultiChoice Group over recent years, is currently advancing to assume control of the South African pay-television conglomerate. However, the deal must maneuver through stringent South African media ownership regulations to gain approval.
Canal+ announced on Thursday that is expects to offer R105 per share for MultiChoice, or a 40% premium to the closing price on 31 January 2024.
The French compamy already owns 31.7% of MultiChoice’s shares.
Canal+ Group’s move to take control of MultiChoice Group in South Africa reflects its strategic expansion into the African pay-television market. MultiChoice Group, known for its DStv service, is a major player in the African broadcasting and entertainment industry, and its acquisition would offer Canal+ Group a significant foothold in the region.
South Africa, like many countries, has laws and regulations governing media ownership to ensure diversity, competition, and local content production in the broadcasting sector. Any acquisition of a major media group like MultiChoice would likely face scrutiny and regulatory approval processes to ensure compliance with these regulations.
Canal+ Group’s move suggests its confidence in navigating these regulatory hurdles and its commitment to expanding its presence in the African market. The success of the deal will depend on various factors, including regulatory approval, market conditions, and potential competition concerns.
The French broadcaster said it has submitted a letter, to the board of MultiChoice, containing a non-binding indicative offer to acquire all of the issued ordinary shares of MultiChoice that it does not already own, subject to obtaining the necessary regulatory approvals.
Upon the satisfactory completion of a confirmatory due diligence, Canal+ intends to deliver a firm intention letter to the Independent Board.
“Canal+ is a long-term investor in both MultiChoice and South Africa, and is proud to have been actively involved in Africa’s media sector for 30 years. For MultiChoice to continue to thrive in Africa it will require a strategy that enhances its scale as well as strengthened local and global expertise. Our Potential Offer, if successful, would be an important next step for MultiChoice to realise its full potential. Combined with Canal+, MultiChoice would have the resources to invest in scale, local African talent and stories, and best in class technology, to allow it to grow in Africa and compete with the global streaming media giants. We are steadfast in our belief that MultiChoice could enjoy a bright future as part of a combined group with Canal+,” Maxime Saada, Chairman and CEO of Canal+ said:
At this stage, there can be no certainty about the progression of the Potential Offer, nor the terms of any transaction that may occur.
Canal+ is respectful and observant of all laws and regulations relating to the South African media sector and companies listed on the Johannesburg Stock Exchange. Any firm intention letter submitted would be mindful of the obligations that Canal+ would have in this regard.
“As a committed investor and an experienced global media company, we want to ensure that MultiChoice and the broader South African creative ecosystem are able to succeed in the long-term. We hope to build on our strong track record of cooperating with MultiChoice to commission ambitious and authentic African content, support more local production companies and deepen access to international sport while investing in and promoting local sport and their local stars and ambassadors. In turn, this will give viewers more compelling content and further enable Africa to tell her story to a global audience on her own terms.,” said Saada.
Canal+ is actively preparing its listing following the unbundling announcement of its parent company Vivendi. This will allow investors to benefit from the combination of Canal+ and MultiChoice, our ultimate goal being to also obtain a listing in South Africa.
“We believe that with greater scale, as part of a combined group with Canal+, MultiChoice would enhance its ability to navigate the structural challenges facing the media sector, creating and securing jobs, and providing a platform for the continued success of MultiChoice as Africa’s leading media company,” added Saada.
The creation of a world leading global media company with Africa at its heart
For three years, Canal+ has been a supportive major shareholder in MultiChoice, having grown its investment to become the company’s largest shareholder. It is the ambition of Canal+ to create an African media business with enhanced scale, which can thrive in a competitive international market, better serve its consumers with a world leading offering of sports, local and global content, and ensure that Africa can tell her story to a global audience on her own terms.
However, the media industry in which MultiChoice is operating is becoming increasingly globalised and competitive, with regional media companies having to compete with the firepower of global media titans, with enormous resources to invest in content, marketing and technology. Scale is the only way to survive and thrive in this environment.
A combination between Canal+ and MultiChoice would create a group with significant scale, putting MultiChoice on a secure long-term path and enabling the company to thrive. It would create a combined group with the ability to commit even greater investment into local content and sport, the provision of a technology platform owned by the combined company, and which would diversify the geographical footprint of MultiChoice, mitigating localised risks and market volatility.
Should this combination not proceed, this lack of scale is likely to become a more acute problem in the coming years, risking the company’s status as the pre-eminent media company in Africa and impacting its mid-term trajectory.
Canal+ Group is committed to continue investing in South Africa
Canal+ Group has great admiration for, and confidence in South Africa’s sophisticated and established creative industries and is dedicated to expanding its commercial commitments in the country. It also appreciates MultiChoice’s unique position across the markets in which it operates, and the important role it has played in the development of the South African and African media landscape over the last four decades.
Through its investment in MultiChoice, Canal+ is supportive of South Africa’s creative economy, and is keen to ensure that this remains vibrant and successful in the long-term. Canal+ has deep experience in producing and distributing local content and sports coverage and sees this as vitally important for its business model and the future success of media businesses in Africa and beyond.
Having operated in Africa for over 30 years, Canal+ is passionate about assisting in the advancement of the continent’s creative sector, and providing consumers with world leading ways to access best-in-class local and international content and sports. We respect the immense diversity and nuances that exist throughout the different markets we operate in, and would look to combine the deep local and regional experience of MultiChoice with the extensive global track record of Canal+.
“We recognise that the economic transformation of South Africa is an imperative. We are fully committed to the combined group being ‘best-in-class’ in terms of B-BBEE and participation of historically disadvantaged groups, and acknowledge the key role played by Phuthuma Nathi in this regard,” the company said..