Pan-African pay-TV operator Multichoice has officially turned down a $2.5 billion acquisition offer from French media company Canal+. The decision was communicated to shareholders through a notice on Monday, citing undervaluation of the company as the primary reason for rejecting the proposal.
According to the notice, Canal+ currently holds 35.01% of Multichoice’s total ordinary shares. The failed bid aimed to acquire the remaining issued share capital of Multichoice at a proposed price of R105 per share in cash.
Multichoice, in explaining its decision, highlighted that a recent valuation exercise conducted by the company determined that its share unit is worth more than the offered R105. The valuation, which excluded potential synergies from the proposed transaction, led the board to conclude that the offered price significantly undervalues the company and its future prospects.
The company acknowledged Canal+’s repeated assertions regarding the advantages of a combined entity and potential synergies. However, Multichoice emphasized the need for these synergies to be factored into any fair offer made by Canal+.
Despite being open to various means of maximizing shareholder value, Multichoice made it clear that, at the proposed price, the letter does not provide a basis for further engagement. The board expressed its commitment to engaging with any party offering a fair price and subject to appropriate conditions while continuing to act in accordance with takeover regulations.
Last week, Canal+’s proposed to acquire the remaining shares of Multichoice Group, in a deal valued at 46 billion rand ($2.5 billion). Canal+’s offer of 105 rand per share in cash represented a 40% premium to Multichoice’s recent closing price. The acquisition plan aligned with Vivendi SE’s strategy to merge Canal+’s local operations with Multichoice, creating a conglomerate with close to 50 million subscribers. However, Multichoice’s rejection signals a divergence in valuation perspectives between the two companies. The board remains focused on shareholder value and adherence to takeover regulations as the situation unfolds.
