Groupe Canal+ (the French media conglomerate) has until April 8th 2024, to make a mandatory acquisition offer to shareholders of MultiChoice Group, a JSE-listed South African pay-TV operator.
South Africa’s market regulator – the Takeover Regulation Panel (TRP) – gave the deadline following Canal+’s purchase of more than 35% of MultiChoice’s shares, triggering the threshold under South African law that required it to make the mandatory offer.
Recall that MultiChoice’s board had rejected Canal+’s indicative offer of US$5.51/share in February. However, after Canal+ increased its stake to 35%, the TRP ruled that the company must announce a firm intention to MultiChoice shareholders. Canal+ must offer a minimum of the highest price that it has paid for acquiring MultiChoice shares in the last six months. However, regulation 111(3) allows for deviations from the highest-price-paid principle if the offeror believes it is not applicable in a particular case.
Canal+ has been buying up shares in MultiChoice since 2020, but the highest price paid for MultiChoice shares in the last six months is unclear. The value must be between US$3.30/share and US$4.82/share, well below the US$5.51/share that Canal+ is prepared to pay shareholders to secure a deal.
For the mandatory offer to succeed, 50% of the voting rights in MultiChoice, other than those held by Canal+ (understood to be capped at 20%), must agree. However, even if the deal gets shareholder approval, Canal+’s acquisition of MultiChoice could still be hindered by legislation that caps voting control of South African broadcasting licensees by foreign entities at 20%.
MultiChoice’s board has stated they will continue acting in the company’s and its shareholders’ best interests.
