Categories: NewsTechnology
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2024-02-12 6:52 AM

Canal+ Sparks Media Shake-Up with MultiChoice Acquisition Bid

  • Canal+ announces plans to acquire MultiChoice, a significant move in South Africa's media industry, with a proposed offer price of R105 per share.
  • MultiChoice's board questions the offer price, triggering regulatory scrutiny as Canal+ increases its stake to 35%, potentially necessitating a mandatory offer under the Companies Act.
  • Uncertainty persists over regulatory decisions by the Takeover Regulation Panel (TRP), Icasa, and the Competition Commission, with implications for minority shareholders and the broader media landscape in South Africa.
By Miriam Matoma

In a groundbreaking development within South Africa’s media industry, Canal+, the renowned French broadcaster, has unveiled its intentions to acquire MultiChoice, marking a historic milestone with significant implications for the country’s broadcasting landscape. Amidst this bold move, questions loom large over the intricate bureaucratic processes guiding such acquisitions and their implications for the future of media in the nation.

On the final day of January, Canal+ made headlines by announcing its proposal to acquire all outstanding ordinary shares of MultiChoice, a prominent player in the South African media scene. The offer, set at R105 per share in cash, represents a substantial premium of 40% over MultiChoice’s closing share price of R75 on January 31, 2024.

Maxime Saada, Chairman and CEO of Canal+, emphasized the strategic significance of the potential acquisition, stating, “Our Potential Offer, if successful, would be an important next step for MultiChoice to realize its full potential.” He highlighted the synergies that a combined entity could leverage, including increased resources for investment in local African talent, storytelling, and cutting-edge technology, positioning MultiChoice to compete more effectively with global streaming giants.

However, MultiChoice’s board responded by expressing reservations regarding the proposed offer price, contending that it undervalues the company and its future prospects, setting the stage for a potentially contentious negotiation process.

The latest twist in this saga came with Canal+’s announcement of an increase in its stake in MultiChoice to 35%, triggering a mandatory offer to all shareholders in accordance with the Companies Act. MultiChoice promptly sought clarification from the Takeover Regulation Panel (TRP) regarding the necessity of this mandatory offer.

Mike Steere, representing Avior Capital Markets, weighed in on the unfolding situation, noting the pivotal question surrounding whether Canal+ would be compelled to make another offer. The intricacies of Icasa regulations, which limit foreign ownership and voting rights to 20%, coupled with the Companies Act’s provisions regarding mandatory offers, present a unique legal conundrum, one that remains largely untested in both statutory law and regulatory practice.

Jarred Houston of All Weather Capital echoed Steere’s sentiments, underscoring the complexity arising from broadcasting regulatory constraints juxtaposed with statutory obligations regarding ownership thresholds. The ultimate determination of whether a mandatory offer is warranted hinges on the interpretation and application of relevant regulations by the TRP.

Houston emphasized the TRP’s mandate to safeguard the interests of minority shareholders, although the optimal course of action remains ambiguous. The impending decision by the TRP holds significant ramifications, yet uncertainty persists regarding the reactions of other regulatory bodies such as Icasa and the Competition Commission.

As stakeholders await clarity on the regulatory front, speculation abounds regarding the potential outcomes and implications of Canal+’s pursuit of MultiChoice. The ramifications extend beyond mere corporate maneuvering, touching upon broader themes of media ownership, market competition, and regulatory oversight in South Africa’s evolving media landscape.

Against the backdrop of technological advancements and shifting consumer preferences, the Canal+-MultiChoice saga serves as a microcosm of the broader transformations reshaping the global media industry. As South Africa navigates these winds of change, stakeholders across sectors closely monitor the unfolding narrative, cognizant of its potential to reshape the contours of the nation’s media ecosystem.

In conclusion, Canal+’s bid for MultiChoice heralds a new chapter in South Africa’s media landscape, underscoring the complexities inherent in navigating regulatory frameworks and market dynamics in an era of unprecedented transformation. As the saga unfolds, it prompts reflection on the intersection of corporate strategy, regulatory oversight, and broader societal implications, shaping the future trajectory of media in the Rainbow Nation.

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Miriam Matoma

Miriam is a freelance writer, she covers economics and government news for Rateweb. You can contact her on: Email: miriam@rateweb.co.za Twitter: @MatomaMiriam

Tags: MultiChoice