MultiChoice rejects Canal+’s R30-billion takeover offer

MultiChoice has refused Groupe Canal+’s offer to buy out the company at R105 per share.

The DStv operator believes the French media conglomerate’s offer undervalues the company.

Canal+ announced on Thursday that it submitted a non-binding indicative offer to acquire the shares in MultiChoice it does not already own.

The offer valued MultiChoice at over R46 billion, and Canal+ would have to pay R30.2 billion cash for the remaining 64.99% of the company it does not own.

In addition to announcing its rejection of Canal+’s offer, MultiChoice revealed on Monday morning that the French media giant increased its shareholding in MultiChoice to 35.01%.

“After careful consideration, the board has concluded that the proposed offer price of R105 in cash significantly undervalues the Group and its future prospects,” MultiChoice said.

“The Board has reached this conclusion taking into account all relevant considerations.”

These included that MultiChoice recently conducted a valuation exercise, which has valued the company significantly above R105 per share.

“MultiChoice’s valuation excludes any potential synergies which may arise from the envisaged transaction,” it stated.

“In this regard, Canal+ has, following the lengthy discussions between the parties, repeatedly conveyed to the public what it sees as the advantages of the combined entity and, therefore, seemingly takes the view that there are significant synergies. These synergies need to be factored into any fair offer made by Canal+.”

MultiChoice also made some biting remarks about how Canal+ announced its offer to the market.

“The delivery of the Canal+ letter [to the board making the offer] took place after discussions between Canal+ and MultiChoice lasting for well over a year,” MultiChoice said.

“Following the delivery of that letter, Canal+ and its representatives have extensively discussed their proposal in public and with members of the press.”

MultiChoice said that although the board is open to all means of maximising shareholder value, it told Canal+ that its letter does not provide a basis for further engagement at the proposed price.

“In keeping with its duty to act in the best interests of the Company, the Board remains open to engage with any party in respect of any offer which is for a fair price and is subject to appropriate conditions,” MultiChoice said.

“Moreover, it goes without saying that the Board will continue to act in accordance with its duties in the applicable provisions of the Takeover Regulations regarding any formal and binding offer.”

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MultiChoice rejects Canal+’s R30-billion takeover offer