Canal+ proposes acquisition of MultiChoice

Canal+ has revealed its non-binding indicative offer to acquire the pay-TV powerhouse, MultiChoice in South Africa, with an approximate value of R31.7 billion.

Thursday saw Canal+ release a statement indicating its proposal to purchase all outstanding ordinary shares of MultiChoice, conditional on the necessary regulatory approvals. Canal+ offered R105 per ordinary share, representing a 40% premium over MultiChoice’s closing share price on January 31, 2024.

In its latest annual report, MultiChoice revealed that Canal+ already owns 140,160,277 of its 442,512,678 issued shares. This means acquiring the remainder would cost Canal+ around R31.75 billion.

Over the past four years, Canal+ slowly increased its stake in MultiChoice via a creeping takeover strategy. This strategy resulted in Canal+ owning over 30% of the company, although there were concerns this might violate South Africa’s Electronic Communications Act. However, MultiChoice dismissed these worries, pointing out its regulations limit foreign voting rights to 20%.

Canal+ expressed its desire to transform MultiChoice into a global-scale media company while voicing concerns that without such a deal, MultiChoice’s lack of scale could become problematic.

Canal+ assured its compliance with all South African media sector laws and regulations and those related to companies listed on the Johannesburg Stock Exchange.

Moreover, Canal+ is preparing its listing following the unbundling announcement from its parent company, Vivendi. It further aims to create an African media business of enhanced scale, capable of competing in the international market.

The company affirmed that a merger with MultiChoice would help it significantly scale and thrive. Canal+ also pledged commitment to South Africa’s creative industry, local sports, and Black Economic Empowerment.

Maxime Saada, Chairman and CEO of Canal+, stated that they have been long-term investors in both MultiChoice and South Africa and are proud to have been actively involved in Africa’s media industry for 30 years.

“For MultiChoice to prosper further in Africa, it will need a strategy that boosts its scale and reinforces its local and international expertise,” said Saada. “If combined with Canal+, MultiChoice would have the resources to invest in scale, local African talent and narratives, and top-tier technology, enabling it to grow in Africa and compete with the global streaming media giants.”

Saada stated that as a dedicated investor and an experienced global media business, they aim to ensure the long-term success of MultiChoice and the wider South African creative ecosystem.

“We plan to expand our solid track record of collaboration with MultiChoice to commission ambitious and genuine African content, support more local production firms, and increase access to international sport while investing in and championing local sport and their local stars and ambassadors,” he said.

Saada expressed his belief that as part of a combined group with Canal+, MultiChoice would enhance its ability to navigate the structural challenges facing the media industry, creating and safeguarding jobs and providing a platform for MultiChoice’s ongoing success as Africa’s leading media company.