MultiChoice shareholders are closer to deciding the fate of the pay-TV group’s ownership, weighing up whether R125 a share is an appropriate exit or if the group, left to its own devices, can surpass the heights reached in March 2023 on the stock market.
On Monday, Canal+ and MultiChoice said they had entered into a co-operation agreement regarding the French broadcaster’s proposed mandatory offer for Africa’s largest pay-TV group.
This is as Canal+ continues its aggressive buying of MultiChoice shares. The French group now holds almost 37% of JSE-listed company’s shares, further increasing its lead as the largest shareholder.
MultiChoice has granted Canal+ certain customary exclusivity undertakings.
Under the offer, MultiChoice shareholders will get R125 for their shares, “which is significantly above the minimum price of about R105 required by the takeover regulations”, the companies said.
MultiChoice has constituted its independent board, which has appointed Standard Bank of SA as an independent expert to express a view on the fairness and reasonableness of the terms of the offer.
The offer price of R125 per share represents a premium of 66.66% to the closing price of R75 on February 1, the last trading day before the delivery of Canal+’s nonbinding indicative offer. It is also 63.96% higher than MultiChoice’s 30-day volume weighted average price on the last trading day before the delivery of the nonbinding indicative offer.
On Monday, progress on the mandatory offer sent MultiChoice shares rocketing, with the counter closing 4.99% higher at R117.93.
At the close of business on April 5, Canal+ held about 36.6% of MultiChoice shares in issue.
The French business had a 31.67% interest when it first proposed the offer, before raising its stake to 35.01% after the deal’s announcement earlier in February, just above the threshold that required it to make a mandatory offer to all other shareholders.
Since then, the buying activity has continued but Canal+ CEO Maxime Saada told Business Day the shares it was buying did not appear to be coming from the largest institutional shareholders.
“Most of it is free float, or people who have a large number of shares [selling]. The main shareholders have not reduced their stake. Some of them have increased their stake. If the question is: have you bought from any of these big guys? It doesn’t seem so,” he said.
Other large MultiChoice shareholders include the PIC, at 15%, M&G at about 12% and Allan Gray 6%.
Saada is paying attention to who will budge at the new offer price.
“This will be critical now. With the R125, we will see who is willing to sell. Maybe some of them will change their minds,” he said.
“There are two sides to every story. When we speak to shareholders, some of them are very excited and so they want to stay on and if they do, then we don’t increase our equity stake. What we are offering is a very good price. Some will take advantage and others will believe that we can create even more value and all stay on,” Saada said.
The Canal+ CEO would not be drawn on whether SA business person Patrice Motsepe had joined its bid as recently reported in the media.
Canal+’s parent company, Vivendi, is undertaking a feasibility study for the proposed split of the company into several separately listed entities. Should its planned European listing proceed, there will be an opportunity for SA investors to become shareholders of the combined entity as part of a secondary inward listing on the JSE.
“In particular, if Canal+’s listing occurs before the offer closing, Canal+ will consider revising the terms of the offer and extending to MultiChoice shareholders an opportunity to have exposure to the combined group through this listing. Further details of this listing will be communicated to SA investors in due course,” it said.
The Canal+ offer values MultiChoice at about R55.4bn. If accepted, it will be the biggest M&A deal in SA so far this year.
Update: April 8 2024
This story has been updated with additional information throughout.
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