Canal+, the French pay-TV giant owned by Vivendi SE, has offered to buy the shares of South African pay-TV company MultiChoice Group for about $1.7 billion to strengthen its hand in a competitive international pay TV market.
Over the past four years, Canal+ has gradually increased its stake in MultiChoice via a creeping takeover strategy. This strategy resulted in Canal+ owning over 30% of the company, although there were concerns this might violate South Africa’s Electronic Communications Act. However, MultiChoice dismissed these worries, pointing out that its regulations limit foreign voting rights to 20%.
However, Canal Plus, now the top shareholder in MultiChoice with a 31.67% stake, stated that it would likely pay 105 rand in cash per share, a 40% premium to MultiChoice’s closing share price on Wednesday. According to the latest annual report, As Canal+ already owns 140,160,277 of its 442,512,678 issued shares, acquiring the remainder would cost Canal+ around R31.75 billion.
Commenting on the deal, Chairman and CEO of Canal+, Maxime Saada, stated that they have been long-term investors in MultiChoice and South Africa and are proud to have been actively involved in Africa’s media industry for 30 years.
“For MultiChoice to prosper further in Africa, it will need a strategy that boosts its scale and reinforces its local and international expertise,” said Saada. “If combined with Canal+, MultiChoice would have the resources to invest in scale, local African talent and narratives, and top-tier technology, enabling it to grow in Africa and compete with the global streaming media giants.”
MultiChoice, which operates in 50 countries in sub-Saharan Africa, said it had received a letter from the French media company and would update shareholders should further developments occur.