French media and telecommunications conglomerate Canal+ Group has confirmed its submission of a letter to MultiChoice Group’s board of directors containing a non-binding indicative offer in which it seeks to acquire the remaining ordinary shares of the South African entertainment company. In human language, the French group is attempting to buy SA’s media giant.
Canal+ already controls a +30% chunk of MultiChoice Group’s equity, according to MultiChoice’s 2023 annual financial report published in July last year. Its stake was bought on the open market over the last three years.
In its non-binding indicative offer, Canal+ has set the potential buyout price at R105/share, a generous R30/share over MultiChoice’s closing share price of R75/share on 31 January 2024. This offer would value MultiChoice at roughly R48 billion.
Canal+ intentions are firm and clear
Before the French media giant can acquire SA’s DStv owner, it has to get the necessary regulatory approval. Considering that South African broadcasting rules prohibit a foreign entity from owning more than 20% of a local broadcaster’s voting rights, it seems like an uphill battle. Bonne chance.
The first hurdle Canal+ will need to clear is for MultiChoice’s board to consider its offer – bonne chance encore.
“Upon the satisfactory completion of a confirmatory due diligence, Canal+ intends to deliver a firm intention letter to the Independent Board. At this stage, there can be no certainty about the progression of the potential offer, nor the terms of any transaction that may occur,” it states in a press release.
“Canal+ is respectful and observant of all laws and regulations relating to the South African media sector and companies listed on the Johannesburg Stock Exchange. Any firm intention letter submitted would be mindful of the obligations that Canal+ would have in this regard,” it continues.
This move follows MultiChoice’s ongoing partnership with Comcast, the largest American multinational telecommunications and media conglomerate, with which it worked closely on the recent relaunch of local video streaming service Showmax.
In its letter, Canal+ stated its ambition to “create an African media business with enhanced scale, which can thrive in a competitive international market, better serve its consumers with a world-leading offering of sports, local and global content, and ensure that Africa can tell her story to a global audience on her own terms.”
That sounds like a fantastic idea. We’re sure the bags of money it hopes to accrue don’t hurt either.