South African pay-TV leader MultiChoice has informed shareholders that the agreements necessary for the company’s reorganisation have become unconditional and will commence shortly.
As previously noted, this reorganisation is designed to facilitate Canal+’s mandatory offer for MultiChoice. This move is part of the conditions set by the South African Competition Tribunal for approving the offer.
MultiChoice indicated it would provide an updated timeline for the mandatory offer once the reorganisation is completed.
Groupe Canal+, the French media giant, was required to make a bid to acquire all MultiChoice shares after surpassing the 35% ownership threshold stipulated in the South African Companies Act. Following discussions with the MultiChoice board and the Takeover Regulation Panel, Canal+ proposed to buy the remaining shares at R125 each, valuing the total company at R55 billion.
Recently, the Competition Tribunal sanctioned the R55 billion deal, subject to several agreed conditions, including the reorganisation of MultiChoice South Africa Holdings (MCSAH).
The transaction faced two significant hurdles. First, the Electronic Communications Act limits foreign shareholders to 20% of the voting rights of companies with broadcasting licenses. Second, the Independent Communications Authority of South Africa (Icasa) mandates that licensees must be 30% owned by historically disadvantaged individuals, including black individuals, women, and people with disabilities.
To comply with these regulations, MultiChoice is reducing its ownership stake in its subsidiary, Licenceco, which holds a broadcasting license in South Africa. This subsidiary will see MultiChoice maintain a 49% economic interest while controlling 20% of the voting rights through agreements with four entities.
These agreements, which took effect on or around August 1, 2025, involve Phuthuma Nathi, 13th Avenue Investments, the Identity Partners Itai Consortium (IPIC), and the MultiChoice Workers Trust. Phuthuma Nathi is MultiChoice’s Broad-Based Black Economic Empowerment (BEE) investment vehicle in South Africa, and the Workers Trust represents another ownership scheme benefiting LicenceCo employees and key suppliers.
13th Avenue Investments is connected to several investors, including Sipho Maseko, the former CEO of Telkom, while IPIC involves investment vehicles associated with several notable individuals. MultiChoice has acknowledged the extensive commercial and industry experience of these leaders.
The four entities will receive a combination of ordinary and notional vendor-funded shares, which initially have limited rights but will convert to full shares over time as the funding obligations are met.
Phuthuma Nathi will acquire its stake in LicenceCo through a loan claim of R3.77 billion from MultiChoice, while 13th Avenue and IPIC will jointly invest R287 million for their shares. Additionally, Phuthuma Nathi, which already holds a 25% stake in Orbicom, MultiChoice’s signal distributor, will increase its share to 40% by acquiring a direct 15% stake.
Through these transactions, MultiChoice effectively transfers 26% of its economic interest in LicenceCo and 15% of its financial interest in Orbicom.
The reorganisation does not require approval from MultiChoice shareholders, as classified under JSE rules as a Category 2 transaction.
