Groupe Canal+ has raised its offer to buy all the shares of JSE-listed MultiChoice Group that it does not already own, the two companies said on Tuesday.
Canal+, the biggest shareholder in MultiChoice, with a 35% stake, has agreed to raise its bid to R125/share, or 19%, from its earlier offer price of R105/share.
On Monday, it emerged that Canal+ requested, and received, an extension to the Takeover Regulation Panel’s ruling that it had to make a mandatory offer to MultiChoice shareholders after the South African broadcaster had rejected a R105/share offer, saying it significantly undervalued the group.
“Following further discussions, Canal+ and MultiChoice have agreed to advise MultiChoice shareholders that while the minimum price for the mandatory offer in terms of regulation 111(2) of the takeover regulations is approximately R105 per MultiChoice ordinary share, Canal+ has agreed to increase the price to make the mandatory offer at a cash consideration of R125 per MultiChoice ordinary share,” the JSE-listed group said in a statement to shareholders before markets opened in Johannesburg on Tuesday.
“MultiChoice and Canal+ intend to mutually co-operate in this regard. Accordingly, MultiChoice
will give customary exclusivity undertakings to Canal+,” it said.
“Once the mandatory offer is made, the independent board of MultiChoice will be constituted and will, after receipt of the independent expert’s opinion, provide its opinion and recommendation on the mandatory offer.”
Hurdles
MultiChoice shares, which closed at R109 on Monday, climbed 4.6% on Tuesday to close at R114 apiece.
However, even if the deal gets approval from shareholders, Canal+’s efforts to acquire MultiChoice could still be stymied by legislation that caps voting control of South African broadcasting licensees by foreign entities at 20%. This restriction is contained in the Electronics Communications Act. Canal+ has said it is confident it can work around this restriction, and is expected to provide more details in this regard when it makes a firm offer to shareholders in the coming weeks.
Read: Why Canal+ wants control of MultiChoice
If Canal+ is able to overcome that restriction somehow, it will also have to get the deal approved by South Africa’s competition authorities, which are likely to launch an investigation into the impact on competition in the local broadcasting industry. — (c) 2024 NewsCentral Media, with additional reporting (c) 2024 Reuters