In South Africa, the independent board of MultiChoice has advised its shareholders to agree to a buyout proposal from Canal+. This recommendation was detailed in a comprehensive statement in which the board declared the offer of US$ per share to be equitable and sensible, potentially bringing significant benefits to the shareholders. They urged shareholders to consent to the acquisition once all the conditions for the offer had been met.
Nonetheless, the transaction has yet to achieve a state of completion. The acquisition is subject to the green light from various regulatory bodies within South Africa and internationally. Canal+ and MultiChoice are currently engaged in a meticulous evaluation and strategic planning process, working towards a potential restructuring plan that would need to be in place for the takeover to proceed. Successfully navigating these regulatory challenges is essential before the deal can be finalised and the offer can be fully accepted by the shareholders.
Shareholders have until 22 April 2025 to trade in MultiChoice Shares to participate in the offer. The timelines set out by the circular can be found below:
“In the circumstances, the Independent Board recommends that, if the offer becomes unconditional, MultiChoice Shareholders accept the offer.”
Since the beginning of the year, Canal+ has been actively pursuing the acquisition of MultiChoice. Initially, it proposed a buyout valued at 54 billion South African Rand, which was turned down.
Subsequently, Canal+ strategically increased its stake in MultiChoice to over 35%, triggering a regulatory requirement that obliged it to extend an offer to acquire its remaining shares. Following this move, the French media company further upped its ownership to 45.2%.
In addition to these efforts, Canal+ is also demonstrating its commitment to tackle the challenge posed by South Africa’s regulations on foreign ownership of broadcasting companies. The Electronic Communications Act in South Africa limits foreign entities to holding no more than 20% of the voting rights in a South African broadcaster. To comply with this legislation and proceed with the acquisition, Canal+ is actively exploring alternative solutions to navigate these foreign broadcast ownership restrictions, ensuring the deal’s legality and security.
The groups will have to spend the next year trying to find some way around this.
“In light of the duty on Canal+ to make a mandatory offer for the MultiChoice Shares, Canal+ and MultiChoice are in the process of assessing and finalising suitable structuring options and potential transactions, which may be undertaken by the MultiChoice Group on or shortly before the Closing Date to ensure compliance with the applicable limitations on foreign control while also maintaining MultiChoice’s BBBEE credentials.”
