Just weeks after revealing that Imtiaz Patel would remain as chairman to manage a potential deal with Groupe Canal+, MultiChoice Group has now announced Patel’s immediate departure from the position.
This decision arises amidst growing worries about corporate governance within the broadcasting company, currently under a takeover proposal by France’s Canal+.
In an unexpected turn of events, MultiChoice disclosed on April 2nd, after a board meeting ahead of the Easter weekend, that it was retracting an earlier statement regarding Patel’s planned resignation. The board had previously announced that Elias Masilela would assume the chairmanship starting April 1st.
“In view of the recent ruling by the Takeover Regulation Panel that required Canal+ to make an immediate mandatory offer to all MultiChoice shareholders … the MultiChoice board has reached an agreement with Imtiaz Patel to remain on as chair,” the company said at the time.
“The board believes there is significant benefit in continuity at this time, and Mr Patel has agreed to extend his tenure until the conclusion of the Canal+ transaction or such sooner date as may be determined in light of progress on the transaction,” it said then.
Also read: GUGU LOURIE: Does Canal+ have an insider at MultiChoice?\
Whispers in financial circles in the Sandton hub suggest billionaire business mogul Patrice Motsepe is involved in the possible Canal+ takeover of MultiChoice, the owner of DStv, Africa’s largest pay-television operator.
Bloomberg reported that Motsepe was in talks with French media conglomerate Vivendi’s Canal+, via African Rainbow Capital (ARC), to participate in its multibillion-dollar bid for MultiChoice. The agency quoted unnamed sources as saying the involvement of Motsepe in the deal would likely help the French media conglomerate meet South Africa’s strict BEE ownership requirements.
I think this story was put out there to test whether public opinion would accept Motsepe as a partner for the French conglomerate in its bid to take over MultiChoice.
Canal+ has built up a stake of more than 35% in MultiChoice, which triggers a mandatory takeover bid.
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.
