MultiChoice and Canal+ have filed a motion to have the French group’s bid to take control of Africa’s biggest pay-TV operator assessed by SA’s competition authorities.
These approvals are key to determining whether the French broadcaster will be able to conclude the deal to take over some of the continent’s most valuable media assets: DStv, SuperSport, GOtv and Showmax.
In a note on Monday, the two companies said they had “made a joint merger control filing pertaining to the offer to the Competition Commission as required by the Competition Act”.
“Canal+ and MultiChoice are also engaging with the Independent Communications Authority of SA (Icasa) and other regulatory authorities.”
According to local competition law, the transaction is classified as a large merger, which requires approval by the Competition Tribunal. The tribunal has the final say on local competition matters, with the commission being the body that decides whether to recommend if a deal should proceed.
The transaction faces regulatory hurdles and resistance from internal stakeholders because SA’s regulations — under the Icasa and MultiChoice’s own memorandum of understanding — limit foreign voting rights to 20%.
In early April, Canal+ and MultiChoice entered into a co-operation agreement regarding a proposed mandatory offer.
Canal+ has been aggressively buying up MultiChoice shares for almost four years after it started building its stake with an initial purchase of 6.5% in October 2020. At the beginning of February, the Paris-based company made an offer to buy the rest of the company at R105 a share, or just more than R31bn, in what would be the biggest M&A deal in SA so far in 2024.
The DStv owner snubbed the offer as too low for the business and its prospects, even though it is at the top end of the target price range that analysts and brokers have for the stock. Canal+ raised its offer to R125 per share on March 5.
A day later, Canal+’s stake had grown to 35.01%, triggering a mandatory offer according to rules set by the takeover regulation panel.
Canal+ has since increased its holding in MultiChoice to 45.2%.
MultiChoice shares have had a good run in 2024, spurred on by the French offer, and are now up 34%. On Monday, the stock was 0.46% firmer at R109, giving the group a R48bn market value.
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