Takeover Regulation Panel slams MultiChoice and Canal+ over R30-billion buyout deal

The Takeover Regulation Panel has issued a statement chastising DStv owner MultiChoice and French media giant Groupe Canal+ for their public discussion about a R30-billion buyout offer.

“The Panel is aware of the various communications and announcements that have been issued to the public in relation to MultiChoice and Groupe Canal+ and its concert parties (Canal+),” the regulator stated.

“None of these announcements have been sanctioned or approved by the Panel.”

The regulator said that at the time of releasing its statement on Tuesday morning, it was still engaging with MultiChoice and Canal+ to provide guidance and guidelines on how the matter is to be handled.

MultiChoice issued a statement early on Monday, 5 February 2024, as the JSE’s news service opened, publicly rebuffing Canal+’s offer to buy the company at R105 per share.

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.

“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.

“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 had some acerbic remarks about how Canal+ announced its offer to the market.

“The delivery of the Canal+ letter [to the board] 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.”

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%.

This seemingly confirmed speculation that Canal+ had acquired more shares in the DStv owner and triggered a “mandatory offer” under South Africa’s Companies Act.

However, MultiChoice indicated that it was unsure whether Canal+ was indeed legally compelled to make a mandatory offer.

It also questioned whether Canal+’s public offer constituted a proper mandatory offer as stipulated in the Act.

“MultiChoice has requested the [Takeover Regulation Panel] to make a ruling as to whether a mandatory offer must be made to all holders of ordinary shares in the Company under section 123 of the Act,” it stated.

The Takeover Regulation Panel did not confirm on Tuesday whether a mandatory offer was triggered and if Canal+’s public statement was an appropriate way to discharge its obligations under the Act.

“The Panel confirms that it is taking this matter seriously and is currently investigating various aspects of the current status of this matter on an urgent basis,” it said.

“The purpose of our investigation and our engagements with the parties mentioned above is to ensure that the Panel fulfils its overarching obligation and responsibility of protecting the integrity of the market and ensuring market fairness to holders of MultiChoice’s securities.”

MyBroadband contacted the Takeover Regulation Panel for more details about the relevant laws and regulations, but it declined to comment.

“We do not engage in conversations with the media regarding these issues. Instead, we communicate through the Panel’s official communication channels, namely, its SENS platform, or directly with the parties involved,” TRP deputy executive director Zano Nduli told MyBroadband.