MultiChoice Group Limited has taken a decisive stance against a proposed acquisition offer from Group Canal+ SA, asserting that the suggested price significantly undervalues the company and its future potential. The rejection comes after a period of prolonged discussions between the two entities, culminating in a letter from Canal+ expressing its non-binding intention to acquire the remaining shares of MultiChoice for R105 per share in cash.
Board’s Decision
The Board of Directors at MultiChoice, in a statement released today, announced their rejection of Canal+’s offer, citing their belief that the proposed price fails to accurately reflect the true value of the company. Despite extensive discussions and public statements by Canal+ regarding potential synergies, MultiChoice’s board asserts that the offer does not adequately consider these factors.
Valuation Exercise
MultiChoice recently conducted a valuation exercise, which valued the company significantly higher than the proposed offer price of R105 per share. This valuation, according to the Board, excludes potential synergies that may arise from the envisaged transaction. While Canal+ has highlighted perceived advantages of a combined entity, MultiChoice contends that these synergies need to be factored into any fair offer.
Continued Openness to Offers
While firmly rejecting Canal+’s current proposal, MultiChoice’s Board emphasized their openness to engaging with any party offering a fair price subject to appropriate conditions. The company remains committed to maximizing shareholder value while acting in accordance with applicable regulations governing takeover offers.
Voting Rights Consideration
In addition to the rejection of Canal+’s offer, MultiChoice reminded shareholders of its ability to reduce the voting rights of shares held by foreigners to South Africa, in compliance with statutory requirements. This measure aims to ensure that the aggregate voting power of shares held by foreigners does not exceed 20% of the total voting power in the company.
Advice for Shareholders
Shareholders are advised to seek guidance from their brokers, attorneys, or other professional advisers if they are unsure about what action to take in response to the rejection of Canal+’s offer. MultiChoice’s memorandum of incorporation provides further details on voting rights and foreign ownership considerations.
Conclusion
MultiChoice’s rejection of Canal+’s acquisition offer underscores the company’s confidence in its value and future prospects. While remaining open to potential offers that align with shareholder interests, the Board has made it clear that any future proposals must reflect the true worth of the company and account for potential synergies. As the situation develops, shareholders will be closely monitoring MultiChoice’s strategic decisions and their impact on the company’s trajectory.
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