In the wise words of Jian Yang, “If [an] oil company wants to buy your house, there’s oil underneath.” MultiChoice Group, the conglomerate that controls South Africa’s DStv and Showmax, appears to be thinking along similar lines, having just rejected a bid from France’s Canal+, which sought to acquire the Group for R105/share as recently as Thursday, 1 February.
MultiChoice wants MORE
MultiChoice, according to TechCentral, feels as though it has been undervalued by the French media company’s roughly R48-billion valuation, and we’ve got to admit; it makes a fair point. It only recently helmed the relaunch of Showmax following a partnership that saw NBCUniversal and Sky come together with Showmax like some media-fueled Megazord. And good luck finding a sport that isn’t already under the Group’s eyes.
MultiChoice Group then went on to say that it had performed an in-house valuation and had, perhaps unsurprisingly to anyone familiar with the group, found that it was worth “significantly” more than the R105/share offer Canal+ had slapped them with.
“After careful consideration, the board has concluded that the proposed offer price of R105 in cash significantly undervalues the group and its future prospects. The board is open to all means of maximising shareholder value, it has conveyed to Canal+ that – at this proposed price – the letter does not provide a basis for further engagement.”
Notice that “at this proposed price” is mentioned in the Group’s statement. It’s clear that it has no intentions to shut any doors or burn bridges at this stage. At least not without seeing an improved offer, if any were to arrive. We’re inclined to believe that Canal+ hasn’t given up hope of the acquisition (see the oil company analogy) after MultiChoice’s letter to the shareholder confirmed that discussions between the two entities had been going on for well over a year.
“In keeping with its duty to act in the best interests of the company, the board remains open to engage with any party in respect of any offer which is for a fair price and is subject to appropriate conditions. Moreover, it goes without saying that the board will continue to act in accordance with its duties in the applicable provisions of the Takeover Regulations regarding any formal and binding offer.”
Later, MultiChoice confirmed in a separate announcement that Canal+ had upped its total of ordinary shares to 35% from the 31.7% it was last time MultiChoice released the information in July’s 2023 annual fiscal report.
“MultiChoice has filed the required notice with the Takeover Regulation Panel… MultiChoice has also requested the TRP to make a ruling as to whether a mandatory offer must be made to all holders of ordinary shares in the company… A further announcement will be released if there are further developments, it said.