Canal+ has raised the price it is prepared to pay to acquire MultiChoice, and the two pay TV operators have agreed “to mutually cooperate” with the latter, giving the French company “customary exclusivity undertakings”.
In a joint statement, the pair said Canal+ had raised its bid from the US$5.54 per ordinary share that MultiChoice’s board rejected last month to US$6.60.
The upping of Canal+’s bid comes after local regulator the Takeover Regulation Panel (TRP) told the Vivendi-owned pay TV operator that it had to make a mandatory offer for the remaining shares in MultiChoice having crossed the 35% threshold that signposted the need for such an offer.
The South African operator has now said that once the mandatory offer is made, an independent board will be set up to provide a recommendation but added the caveat that “nothing in this announcement should be read as limiting in any way the giving of such opinion”.
The TRP ruled last week that Canal+ would have to make a mandatory offer, having crossed the 35% ownership threshold that triggers this.
The ruling came after the French pay TV operator upped its equity stake in MultiChoice to 35.01%.
Canal+ had argued it should not be required to make a mandatory offer as MultiChoice’s rules of incorporation held that non-South African companies should be restricted to carrying 20% of the company’s voting rights.
However, the TRP rejected this argument because the relevant section of MultiChoice’s articles of incorporation “applies if and only if either of two threshold-related circumstances arises and then only to ensure compliance with a defined foreign control restriction”. That defined restriction means “the ability of a foreigner to exercise control over and have an interest in the holder of a commercial broadcasting service licence above a 20% threshold”. It does not apply to votes on “other (non-licensee) matters”.
