French media group Canal+ has made a mandatory offer to the minority shareholders of JSE-listed broadcaster MultiChoice Group after surpassing a threshold set by the Johannesburg Stock Exchange.
The JSE requires an offer to be made to other shareholders on a basis agreed with the main bourse when a person or group acquires at least a 35% stake in a listed company.
On February 5, Canal+ Group increased its ownership in MultiChoice from 31.07% to 35.01%, despite a prior rejected takeover offer.
However, industry experts have pointed out that the Electronic Communications Act limits foreign ownership of local licensed broadcasters to 20% and flagged this as a potential risk to the deal. MultiChoice’s memorandum of incorporation states that the voting rights of foreign owners are limited to 20%, even if their shareholding exceeds this.
Today, Canal+ proposed a mandatory offer to acquire all the issued shares of MultiChoice Group not already owned by the group at a purchase price of R125.00, payable in cash.
The French conglomerate said the offer was significantly above the regulatory minimum price for the mandatory offer, which is approximately R105.00.
MultiChoice and Canal+ have entered into a cooperation agreement regarding the offer.
“The offer will be fully funded by funds available to Canal+. The South African Takeover Regulations Panel has been furnished with an irrevocable unconditional bank guarantee,” said the company.
Furthermore, MultiChoice has constituted an Independent Board, which has appointed Standard Bank as an independent expert to express a view on the fairness and reasonableness of the terms of the 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. Canal+ is confident in making this offer, at a level which far exceeds the minimum required by regulation, due to the incredible future we believe that Canal+ and MultiChoice can build together,” Maxime Saada, Chairman and CEO of Canal+ Group said.
“Through combining our companies, we will be well positioned to invest even more in local productions and sports content, supporting the world-leading and vibrant creative ecosystem on the African continent and all over the world, and producing even more high-quality and compelling local stories. The complementary geographies, considerable scale, and strengthened capabilities achieved by the combination of these two great companies will ensure that Africa can tell her own stories on her own terms both locally and globally.
“We are excited about these opportunities, which will be supported by further investment in technology, including the continued offering of a leading satellite service, and rolling out more innovative streaming products.”
Canal+ said MultiChoice shareholders will realise significant and attractive value, and crystalise this value in cash, for their offer shares, constituting a 66.66% premium to the closing price of R 75.00 on 1 February 2024 – the last trading day prior to the delivery of Canal+’s Non-Binding Indicative Offer.
“MultiChoice will become part of a global entertainment leader, with Africa at its heart, which is capable of competing and cooperating with the largest international media companies, streaming platforms and studios,” said the French company.
“The South African creative and sporting economy will be supported by a local champion with global reach, providing a stable foundation for long-term investment in the sector. Consumers across Africa will benefit from an enhanced service and product offering, underpinned by technology solutions owned by the combined company.”
Canal+ committed itself to support MultiChoice in its continued efforts to foster B-BBEE initiatives and the transformation of its South African business.
“It is the ambition of Cnala+ to build a global entertainment leader with Africa at its heart, combining scale, complementary geographies and international reach with strong local roots, that will support the commercial development of Africa’s sporting and cultural industries and take leading authentic African stories to a global audience.”
The deal is subject to:
- the Financial Surveillance Department of the South African Reserve Bank grants such approvals with respect to the Offer as are required in terms of the the Exchange Control Regulations, 1961 made in terms of the Currency and Exchanges Act, No. 9 of 1933 to implement the Offer either unconditionally, or subject to conditions acceptable to Canal+;
- the Competition Tribunal of South Africa, established in terms of Section 26 of the Competition Act, No. 89 of 1998 (Competition Act) or the Competition Appeal Court, established in terms of Section 36 of the Competition Act, as applicable, grant such approvals as are required to implement the Offer either unconditionally, or subject to conditions acceptable to Canal+;
- the JSE grants such approvals as are required to implement the Offer;
- the TRP grants such approvals and exemptions as are required to implement the Offer (excluding the issuing of a compliance certificate); and
- the approvals required by law of each relevant governmental authority and each other relevant merger control or competition law authority, as may be agreed by Canal+ and MultiChoice, are obtained either unconditionally, or subject to conditions acceptable to Canal+, provided that, in exercising its discretion in respect of the Offer Conditions, Canal+ shall act in good faith after due consultation with MultiChoice.
