An independent board set up by MultiChoice has determined that the R125 per share offer by French media giant Canal+ is “fair and reasonable” to shareholders of SA’s video entertainment group.
Canal+ and MultiChoice today issued a combined circular to MultiChoice shareholders regarding the mandatory offer by the French company, to acquire the MultiChoice shares it does not own, for a consideration of R125 per share.
This is the next step in the process as regulated by the Takeover Regulation Panel (TRP).
The combined circular includes the report by the independent expert (Standard Bank), which was appointed by the independent board of MultiChoice, and expressed an opinion that the offer was fair and reasonable.
In a statement, the companies say the independent board reviewed the valuations prepared in the independent expert’s report and concluded that the terms and conditions of the offer are fair and reasonable to MultiChoice shareholders.
The board has, therefore, recommended the offer to MultiChoice shareholders in the event of it becoming unconditional.
Hot pursuit
Over the years, Canal+, which had a 35% shareholding in MultiChoice, has been buying the firm’s shares on the open market.
As the company increased its stake, it made the move to acquire all the shares in the pay-TV operator.
MultiChoice’s total number of issued shares is 442 512 678; therefore, at 45.2%, Canal+ holds around 200 015 730 shares in MultiChoice as at 16 May 2024.
This means the French broadcaster has to fork out over R30 billion to purchase the shares it does not own in MultiChoice on the open market.
ITWeb understands that should the Canal+ shareholding in MultiChoice exceed 50%, the deal may be subject to Competition Commission scrutiny.
Canal+ and MultiChoice are in the process of assessing and finalising a suitable structure for the licensed activities of MultiChoice, to ensure compliance with the applicable limitations on foreign control on implementation of the mandatory offer, while also maintaining MultiChoice’s BBBEE credentials.
The parties will provide further details in this regard in due course.
In early February, Canal+ expressed a non-binding intention to make an offer (NBIO) of R105 per MultiChoice share, which was rejected.
After increasing its interest in MultiChoice above 35%, Canal+ was required to make a mandatory offer for the MultiChoice shares it did not own, as a result of a ruling on 28 February by the TRP.
The firms confirmed their intention to mutually co-operate in this process by signing an exclusive co-operation agreement on 7 April and jointly publishing a firm intention announcement on 8 April.
The offer consideration of R125 per share represents a 66.66% premium compared to the MultiChoice share price (last closing price) on the last trading day prior to the delivery of the NBIO and a 63.96% premium compared to the 30-day volume-weighted average price prior to the NBIO.
Canal+ is of the view that it is a substantial premium that recognises the potential benefits that may be realised by combining Canal+ and MultiChoice.
It says a combined group would be better positioned to address key structural challenges and opportunities resulting from the progressive digitalisation and globalisation of the media and entertainment sector.
This could have significant benefits for the African creative and sports ecosystems, by enabling high-quality content created on the continent to be distributed to an international audience, says the French firm.
Canal+ intends that, should its European listing proceed, there will be an opportunity for South African investors to become shareholders of the combined entity as part of a secondary inward listing on the JSE.
Global entertainment business
Canal+ and MultiChoice say they recognise the economic transformation of South Africa and BBBEE are imperatives both in the wider context and for MultiChoice.
Canal+ notes it is fully committed to maintaining MultiChoice’s BBBEE credentials and acknowledges the key role played by the Phuthuma Nathi empowerment share scheme in this regard.
“The publication of the combined circular is a step forward in our vision to create a global entertainment business with Africa at its heart,” says Maxime Saada, chairman and CEO of Canal+ Group.
“It includes a recommendation by the independent board of MultiChoice that our offer should be accepted by shareholders in the event it becomes unconditional, and an assessment that our offer is both fair and reasonable.
“By combining the scale, complementary geographies and content portfolios of our two companies, we will create an entertainment group with international reach and strong local roots. Our aspiration is to provide viewers across the continent with a local champion that can both challenge and partner with the largest media companies in the world and which can serve powerful local stories and compelling sport, whilst investing in the local creative and sporting ecosystems to ensure their long-term success.”
Elias Masilela, chairman of MultiChoice Group, says: “The offer from Canal+ is an endorsement of MultiChoice’s 40-year track record and our compelling continental growth strategy. It is gratifying to note that foreign investors share our view that South Africa and Africa remain attractive growth markets.
“While we are currently successfully delivering on our mandate and strategy, the Canal+ offer provides the opportunity to accelerate these plans.”
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