French media giant ordered to make immediate offer to buy MultiChoice

The Takeover Regulation Panel ruled on Tuesday, 27 February, that Canal+ must make a mandatory offer to buy out MultiChoice immediately.
It also slapped MultiChoice with a compliance notice over its public discussion with Canal+ about an R30-billion buyout offer. However, MultiChoice said it has launched an appeal in this regard.
The ruling relates to an announcement released on 5 February 2024, where MultiChoice publicly rejected Canal+’s offer to buy it at R105 per share.
“The TRP contended that the publication of, inter alia, the announcement without the approval of the TRP was unlawful, being in contravention of the Act and the Regulations, and issued a compliance notice against MultiChoice,” the regulator stated.
“This compliance notice is the subject matter of an appeal and a review instituted by MultiChoice to The Takeover Special Committee.”
The Takeover Regulation Panel added that Canal+ has acquired 35.01% of voting rights in MultiChoice and has accordingly triggered a mandatory offer.
“Canal+ is therefore required to make the mandatory offer immediately, in line with the requirements of the Act and the Regulations,” it said.
Canal+’s offer to buy MultiChoice at R105 per share valued the South African pay-TV broadcaster at over R46 billion, and through the deal, Canal+ would have to pay R30.2 billion to buy the remaining 64.99% of the company.
“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 in an announcement.
“MultiChoice’s valuation excludes any potential synergies which may arise from the envisaged transaction.”
The pay-TV broadcaster also had some scathing words about how Canal+ announced its offer.
“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 also revealed that the French TV giant had increased its shareholding in MultiChoice to 35.01%
Canal+’s acquisition of more MultiChoice shares triggered the mandatory offer to which the Takeover Regulation Panel referred.
However, MultiChoice previously indicated that it was unclear whether Canal+ was legally required to make a mandatory offer and asked the regulator to make a ruling on the matter.