Africa’s leading pay TV company , MultiChoice, has officially rejected Canal+’s non-binding acquisition offer, deeming the proposed cash consideration of R105 per share significantly undervalued. The offer, a 40% premium to MultiChoice’s closing share price on January 31, was presented by Canal+ in a letter submitted to MultiChoice’s board last week.
In response to Canal+’s proposal, MultiChoice highlighted that the company recently conducted a valuation exercise, valuing itself above the R105 per share offer. The valuation did not include potential synergies that Canal+ has emphasized in its communications regarding the prospective merger.
“Canal+ has conveyed what it sees as the advantages of the combined entity and seemingly takes the view that there are significant synergies. These need to be factored into any fair offer made by Canal+,” MultiChoice stated in its response. Despite the rejection, MultiChoice reiterated its openness to engage with any party providing a fair offer under appropriate conditions.
Notably, Canal+ holds a 35.01% stake in MultiChoice, having steadily increased its holdings over recent years. South African law mandates that any entity with a stake exceeding 35% must make a mandatory offer to minority shareholders. MultiChoice has formally requested regulatory clarification on whether Canal+ must comply with this requirement.
The rejection comes as no surprise, given MultiChoice’s market capitalization of $2.15 billion and its board’s belief that the R105 offer undervalues the company’s future prospects. The board emphasized its commitment to maximizing shareholder value but asserted that the proposed price did not provide a basis for further engagement.
Canal+ responded to MultiChoice’s rejection by stating that, at this stage, there is no certainty about the progression of the potential offer or its terms. The French pay-TV company expressed respect for South African media sector laws and regulations, committing to submit a firm intention letter mindful of its obligations.
It is unlikely that Canal+ will abandon its pursuit of MultiChoice despite the rejection. Canal+ has been increasing its stake in the company since 2020, and its parent company, Vivendi, has experience with complex takeovers. MultiChoice, in turn, remains open to discussions with any party offering a fair price and favorable conditions.
As the situation unfolds, shareholders and industry observers await further developments, including regulatory rulings on the mandatory offer requirement for entities holding a stake of 35% or more in MultiChoice. The rejection marks a pivotal moment in the ongoing dynamics between MultiChoice and Canal+, shaping the future trajectory of this potential acquisition.