BMA has learnt that Canal+ is poised to fully restructure the MultiChoice Group after the anticipated US$1,6 billion acquisition of MultiChoice by the French media giant is completed.
Last year, Canal+ initiated a mandatory offer to acquire all outstanding MultiChoice shares at a proposed price of US$6.69 per share.
Since the announcement of this offer, both companies have engaged in discussions with South African regulatory bodies to secure the necessary approvals for the deal.
Current negotiations have focused on structuring options and potential transactions to ensure compliance with restrictions on foreign ownership while preserving MultiChoice’s broad-based black economic empowerment (BBBEE) credentials.
In a recent joint statement, the companies informed shareholders that discussions regarding the structure post-transaction have been successfully finalised.
The companies have consulted with the board of directors of Phuthuma Nathi, MultiChoice’s BBBEE scheme, which has given in-principle support for the proposed transaction. An independent board for Phuthuma Nathi will be established to review and evaluate formal proposals in accordance with the relevant regulations.
Canal+ and MultiChoice view these developments as significant progress in the transaction process.
The restructuring plan indicates that MultiChoice Group, Africa’s largest pay-TV operator, will separate the current broadcasting license holder in South Africa, MultiChoice (LicenceCo), and create an independent entity. The remaining video entertainment assets will stay under the MultiChoice Group umbrella.
LicenceCo will retain its subscription broadcasting license and will be responsible for managing contracts with South African subscribers. It will be primarily owned by historically disadvantaged persons (HDPs), including Phuthuma Nathi, which will hold a 27% economic interest, along with two established black-owned companies, Identity Partners Itai Consortium and Afrifund Consortium, as well as a Workers’ Trust.
MultiChoice Group will possess a 49% economic interest and 20% voting rights in LicenceCo. Additionally, MultiChoice will maintain a 75% direct stake in MultiChoice South Africa, separate from LicenceCo, with Phuthuma Nathi retaining its 25% interest in MultiChoice South Africa.
LicenceCo will enter into commercial agreements with MultiChoice Group subsidiaries for services, including content provision, technology, and subscriber management, ensuring no service disruption for LicenceCo’s South African viewers. The transition will enhance subscriber services through additional content and technological investments from MultiChoice Group.
Both companies believe the proposed structure aligns with all legal requirements, including limitations on foreign ownership as stipulated in the Electronic Communications Act of 2005. This LicenceCo structure was submitted to the South African Competition Commission on September 30, 2024, and is currently under consideration.
The transaction awaits regulatory review in multiple jurisdictions, including South Africa, and will be evaluated by the independent board of Phuthuma Nathi following its in-principle approval.
Maxime Saada, CEO of Canal+, stated, “This transaction presents an opportunity to create a unique global media company with a significant presence across Africa, equipped to compete and collaborate with major players in the media sector and beyond.”
He expressed confidence that the proposed post-transaction structure abides by South African laws and regulations, emphasising the importance of black economic empowerment in the deal, welcoming new HDP shareholders and increasing employee ownership. Saada reaffirmed the commitment to unite MultiChoice and Canal+ through this transformative initiative.
