Regulator directs Canal+ to make purchase offer for remaining MultiChoice shares

The Takeover Regulation Panel of South Africa has ordered Canal+, a French media firm, to make an offer to purchase the remaining shares of MultiChoice that it doesn’t already possess. According to the Panel, Canal+ must promptly adhere to the requirements of the Companies Act and related regulations by proposing a mandatory offer to MultiChoice’s remaining shareholders.

This order is in response to what the regulator deemed an unlawful public declaration of the initial offer by MultiChoice, which led to a compliance notification being issued to the South African enterprise.

This comes as the Panel turns its attention to the public dialogue concerning the prospective takeover between Canal+ and MultiChoice. While the regulator has identified the communications between the firms, it has refused to sanction the developments, noting that it remains in talks with both parties to provide guidance on the handling of this matter.

It underlined its dedication to treating this case seriously, aiming to ensure that each party respects its duty to uphold market integrity and fairness for MultiChoice’s security holders.

On February 1, Canal+ made known its plans to purchase the South African pay-TV provider by presenting a non-binding indicative bid of R105 ($5.6) per share. This proposal embodies a 40% increase relative to MultiChoice’s closing share price of R75 ($4) on January 31, 2024.

Canal+, a French media company, has offered a valuation exceeding R46 billion ($2.4 billion) for MultiChoice, planning to pay R32.5 billion ($1.7 billion) in cash for the remaining 64.99% stake. Canal+ currently holds a 35.01% interest in the company.

However, MultiChoice has declined the offer, asserting that it undervalues the business. Despite this, the board is willing to consider proposals that they deem financially reasonable and subject to agreeable terms.

The proposed deal has encountered hurdles due to the South African Electronic Communication Act 2005. The law restricts foreign entities from having direct or indirect control over a commercial broadcasting license. It also limits foreign ownership to no more than 20% of a commercial broadcasting licensee’s voting shares or contributed capital.