French media group Canal+ today announced that it has sweetened the offer deal to buy MultiChoice by 19% .
Canal+, holding the largest share in MultiChoice at 35%, has consented to increase its bid to R125 per share, representing a 19% rise from its previous offer of R105 per share.
Yesterday, the Takeover Regulation Panel (TRP) has granted Canal+ an extension to make a mandatory offer to MultiChoice shareholders.
“Canal+ is required to, and will publish a firm intention announcement by no later than Monday, 8 April 2024,” said the TRP in a statement.
MultiChoice noted the announcement made today by Canal+ that the TRP has granted it an extension of 25 business days, until 8 April 2024, to make the required mandatory offer.
“Following further discussions, Canal+ and MultiChoice have agreed to advise MultiChoice shareholders that while the minimum price for the mandatory offer in terms of regulation 111(2) of the takeover regulations is approximately R105 per MultiChoice ordinary share, Canal+ has agreed to increase the price to make the mandatory offer at a cash consideration of R125 per MultiChoice ordinary share,” the company said in a statement.
Accordingly, MultiChoice will give customary exclusivity undertakings to Canal+.
“MultiChoice and Canal+ intend to mutually co-operate in this regard. Accordingly, MultiChoice
will give customary exclusivity undertakings to Canal+,” it said.
“Once the mandatory offer is made, the independent board of MultiChoice will be constituted and will, after receipt of the independent expert’s opinion, provide its opinion and recommendation on the mandatory offer.”
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 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.
Nevertheless, despite potential shareholder approval, Canal+’s endeavour to acquire MultiChoice might encounter hurdles due to legislation limiting voting control of South African broadcasting licensees by foreign entities to 20%. This regulatory constraint is outlined in the Electronics Communications Act.
