The Takeover Regulation Panel (TRP) has mandated that the French broadcaster cANAL+ is required to issue a “mandatory offer” to shareholders of MultiChoice.
On 1 February, Canal+ said it had offered R105/share for every MultiChoice share it did not already own. It said the offer — worth an estimated R31.7-billion, and representing a 40% premium to MultiChoice’s closing share price of R75 on 31 January.
MultiChoice had earlier spurned the Canal+ offer and told its shareholders that they no longer had to exercise caution in trading in the group’s shares.
Undeterred by the rejection, Canal+ — already the largest MultiChoice shareholder — raised its stake to 35.01%, prompting a mandatory offer to shareholders and effectively initiating a hostile takeover. Given that the board turned down a previous offer by the French company to buy controlling shares, the priority for MultiChoice has to be fending off Canal+.
On 6 February, the TRP said it was investigating the offer made by Canal+ after MultiChoice ended potential buying talks with its largest shareholder.
“Shareholders are advised that the TRP issued a ruling on 27 February to the effect that Canal+ has acquired 35.01% of the voting rights in MultiChoice and, accordingly, a mandatory offer in terms of section 123 of the [Companies Act] has been triggered,” MultiChoice said in a statement today.
“Canal+ is therefore required to make the mandatory offer immediately, in line with the requirements of the Act and the Regulations.
“The TRP has requested that the Company makes a copy of the full ruling available to shareholders. Shareholders can access the ruling on the Company’s website at
https://www.investors.multichoice.com/regulatory.php”
Also read: GUGU LOURIE: A sweetener could sway MultiChoice investors to take Canal+ offer
If French media company Canal+ sweetens its offer to MultiChoice’s institutional shareholders, it is unlikely to face further hostility. Canal+ already holds 31.07% in MultiChoice and appears determined to acquire the balance.
With Canal+ still dangling the carrot, MultiChoice’s share price surged to R105 on February 16. A bit more sweetener and Canal+’s offer for Africa’s largest pay-TV operator may be accepted by institutional shareholders, who hold more than 20% of MultiChoice.
Canal+ is offering to buy the remaining MultiChoice shares for R105 each, totalling just more than R31bn, which — if the deal goes through — would mark it as SA’s largest M&A deal for 2024 so far. Though MultiChoice’s share price has dipped to just above R100, the potential deal’s dynamics remain intriguing.
The Public Investment Corporation (PIC), which holds a 12.25% stake in MultiChoice, remains noncommittal on the offer.
“The board and management of MultiChoice are responsible for the direction and operations of the company and not shareholders, of which the PIC is one,” said Adrian Lackay, PIC spokesperson. “The PIC will assess closing offers if they are presented.”
Should Canal+ enhance its offer to align with the PIC’s preferences, it is likely to secure the investment corporation’s support, given its previous inclination towards foreign takeovers. A nod from the PIC could influence other institutional investors such as Allan Gray and M&G Investments, who collectively own 26% of MultiChoice, to follow suit.
Also read: GUGU LOURIE: MultiChoice better off pursuing its strategy without Canal+
