Multichoice is moving forward with a significant restructuring plan as part of its potential acquisition by French media giant Canal+. Canal+ has proposed a deal valued at approximately R55 billion and already holds a 45% stake in the South African broadcaster.
The proposed transaction faces a key regulatory hurdle: Section 64 of the Electronic Communications Act (ECA), which limits foreign ownership of South African broadcasting license holders to 20%. To comply with this restriction, Multichoice plans to establish a new independent entity called LicenceCo, which will hold the broadcasting licenses. LicenceCo will be minority-owned by the combined Multichoice/Canal+ group.
Under this structure:
- The merged entity will retain 49% of the economic interest in LicenceCo.
- Voting rights will be capped at 20%, in line with ECA requirements.
The remaining control of LicenceCo will be distributed among several South African shareholder groups, including:
- Phuthuma Nathi Investments Limited
- 13th Avenue Investments Proprietary Limited
- Identity Partners Itai Consortium Proprietary Limited (IPIC)
- Multichoice Workers Trust
On 1 August, these groups entered into multiple transaction agreements to formalize their participation. They will subscribe to different classes of shares in LicenceCo, each offering distinct economic and voting rights.
- Class A Shares: Full economic rights from inception.
- Class B and Class C Shares: Notional Vendor-Funded (NVF) shares, initially entitled to “trickle” dividends of 20% and 35%, respectively. Once the NVF balance reaches zero, these shares will convert into ordinary shares with full rights.
Investment Commitments:
- Phuthuma Nathi will invest R3.8 billion in Class A shares.
- 13th Avenue and IPIC will each invest R287 million in their respective Class A shares.
Multichoice South Africa will declare an extraordinary dividend of R1.375 billion, of which R343.75 million will go to Phuthuma Nathi. Additionally, Phuthuma Nathi currently holds an indirect stake in Orbicom—the licensed signal distributor—through its 25% shareholding in Multichoice South Africa.
| Shareholder | Class of Shares | Economic Interest | Voting Percentage |
|---|---|---|---|
| Multichoice | Ordinary Shares | 49% | 20.00% |
| PN | Class A Shares | 17.2% | 39.00% |
| Class B Shares | 9.8% | ||
| 13th Avenue | Class A Shares | 1.3% | 16.23% |
| Class B Shares | 8.2% | ||
| IPIC | Class A Shares | 1.3% | 16.23% |
| Class B Shares | 8.2% | ||
| Workers Trust | Class C Shares | 5.0% | 8.54% |
As part of the reorganization:
- Phuthuma Nathi will subscribe for 20% of Orbicom’s ordinary shares at nominal value.
- This will increase its effective stake in Orbicom from 25% to 40%.
The restructuring will result in:
- 26% of the economic interest in LicenceCo being disposed of.
- 15% of the economic interest in Orbicom being disposed of.
As of 31 March 2025, the audited net asset values are:
- LicenceCo: R11 billion
- Orbicom: R152 million
