Former Telkom CEO, Sipho Maseko, has emerged as a key player in Canal+’s push to acquire MultiChoice, the parent company of DStv. Canal+ has gradually increased its stake in MultiChoice and recently surpassed a 35% shareholding threshold, which triggered a mandatory buyout offer from the French media giant. They proposed a per-share price that was accepted by MultiChoice.
Canal+ has continued purchasing shares on the open market, now holding approximately 45% of MultiChoice. The potential partnership between Canal+ and MultiChoice could revolutionise the African pay-TV landscape and create significant operational efficiencies.
However, the road to completing this acquisition is fraught with challenges. The Electronic Communications Act (ECA) imposes restrictions that prevent foreign entities from exercising control over commercial broadcasting licenses. Additionally, it limits the number of foreign directors on a commercial broadcasting licensee’s board to 20%.
Furthermore, the Independent Communications Authority of South Africa (ICASA) has ownership regulations that dictate at least 30% of equity ownership must come from Black people and historically disadvantaged individuals. Broadcasting licensees are also required to achieve at least Level 4 status in the Broad-Based Black Economic Empowerment (BBBEE) framework.
Given these legislations, Canal+ will face limitations on control and governance at MultiChoice. The two companies are currently collaborating with regulatory bodies like ICASA and the Competition Commission to navigate these requirements. MultiChoice CFO Tim Jacobs emphasised that they are actively engaging with relevant authorities to expedite the approval process.
Reports highlight that Canal+ is considering a strategic partnership with Maseko to satisfy the black ownership criteria critical to the acquisition. Maseko could potentially become involved as a shareholder through a local entity or take up a director position in the newly merged entity.
In earlier news, Bloomberg indicated that Patrice Motsepe’s African Rainbow Capital was also in discussions with Canal+ regarding a joint bid for MultiChoice. However, those talks were reportedly abandoned due to potential conflicts of interest, given Motsepe’s presidency at the Confederation of African Football, while MultiChoice has a strong presence in sports broadcasting.
As the founder and executive chair of Afrifund Investments, Maseko is in an advantageous position to help meet the BEE and ownership requirements. Afrifund is a black-owned investment company with Level 1 BBBEE accreditation that focuses on high-growth potential companies needing capital and strategic input.
With a background as Telkom’s chief executive from 2013 to 2021, Maseko has considerable experience navigating government and telecommunications regulations. He has also held significant roles, including non-executive director of the Centre for Development and Enterprise and chairman of South African Petroleum Refineries (SAPREF). Following an unfruitful attempt to acquire a substantial stake in Telkom earlier this year, Maseko is looking toward significant developments at Afrifund Investments.
