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MultiChoice and Canal+ Buyout Deal Forges Ahead

MultiChoice and French media giant Groupe Canal+ have released a joint circular detailing plans and dates for the proposed buyout of the DStv operator at R125 per share.

The circular covers what happens to shareholders who choose not to sell, reiterates Canal+’s plan to list on the JSE, and provides some idea of how the companies might handle foreign ownership restrictions on broadcasters.

Canal+ has steadily bought up MultiChoice stock on the open market since October 2020 and hit a 35% threshold at the beginning of the year, triggering a mandatory buyout offer.

After some wrangling from MultiChoice and a reprimand from the Takeover Regulation Panel, Canal+ offered R125 per share, valuing the company at over R55 billion.

The buyout will cost Canal+ over R30 billion in cash, and the company has continued buying MultiChoice shares while its offer is being considered.

The Takeover Regulation Panel last reported in May that Canal+’s shareholding stood at 45.2%.

Tuesday’s circular shows Canal+ has not bought any additional shares since 10 May 2024. Its average buy price for the past six months has been just over R100 per share.

The circular states that the deal is still subject to several regulatory approvals, including from the Financial Surveillance department, the Competition Tribunal, the JSE, the Takeover Regulation Panel, and other government authorities.

One of the other government authorities is the Independent Communications Authority of South Africa (Icasa), the custodian of the Electronic Communications Act (ECA).

Under the ECA, a foreigner may not, whether directly or indirectly:

  • Exercise control over a commercial broadcasting licensee; or
  • Have a financial interest or an interest either in voting shares or paid-up capital in a commercial broadcasting licensee exceeding 20%

Exercise control over a commercial broadcasting licensee; or
Have a financial interest or an interest either in voting shares or paid-up capital in a commercial broadcasting licensee exceeding 20%.
Canal+ and MultiChoice have stated that they are exploring several options to comply with these requirements following the buyout.

These include a corporate reorganisation, participation by one or more local BBBEE partners, and mechanisms to limit the voting rights of foreigners.

The latter includes a potential limit on MultiChoice’s voting rights over the licensed entities in the MultiChoice Group.

In March, Bloomberg reported that billionaire Patrice Motsepe was in talks with Canal+ to join its bid for MultiChoice.

Regarding shareholders who do not accept the offer, the companies said they will remain invested provided Canal+’s shareholding remains below 90%.

Canal+ reserves the right to invoke Companies Act provisions allowing it to buy out the last remaining shareholders and delist the company should its ownership exceed 90%.

They also committed to engage with the JSE in the event that MultiChoice’s free float dips below the stock exchange’s liquidity requirements.

“MultiChoice shareholders are reminded that Vivendi SE, the parent company of Canal+, is currently undertaking a feasibility study for the proposed split of the company into several separately listed entities,” the circular stated.

“Canal+ intends that, should its planned European listing proceed, there will be an opportunity for South African investors to become shareholders of the combined entity as part of a secondary inward listing on the JSE.”

The companies explained that if Canal+’s listing occurs before its offer becomes unconditional, it will consider revising it to give MultiChoice shareholders an opportunity to have exposure to the combined group.

MultiChoice and Canal+ said the offer opens at 09:00 on 5 June 2024.

They aim for it to become wholly unconditional by no later than Tuesday, 8 April 2025.

The last day to trade to participate in the offer is 22 April 2025, and it closes at noon on Friday, 25 April 2025.

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