MultiChoice mandatory buyout offer — extension granted

French media giant Groupe Canal+ has received an extension for the mandatory offer it must make to buy MultiChoice until 8 April 2024.

This comes after the Takeover Regulation Panel ordered the company to make an immediate offer last week.

Canal+ increased its stake in the DStv operator to 35.01% at the beginning of February, triggering a clause in the South African Companies Act that forces it to make an offer to buy the rest of the company.

While Canal+ offered to buy the remaining 64.99% for R105 per share — around R30 billion in cash — the Takeover Regulation Panel did not consider this its mandatory offer as required by legislation.

“Canal+ respects the decision taken by the Panel, and will comply with it,” the company said in an announcement on the JSE news service on Monday.

“On this basis, Canal+ confirms that it has applied for and received from the Panel an exemption from adhering to the timing requirements”.

Canal+ said the Takeover Regulation Panel has extended its deadline by 25 business days.

“Accordingly, Canal+ is required to, and will publish a firm intention announcement by no later than Monday, 8 April 2024.”

MultiChoice issued a statement shortly after Canal+, saying it notes the announcement.

“The MultiChoice board of directors will continue to act in the best interests of the Company and its shareholders,” it said.

“Shareholders will be updated should there be any further developments.”

MyBroadband recently analysed Canal+’s creeping takeover of MultiChoice to estimate how much it paid for its 35% stake.

MultiChoice has disclosed Canal+’s steadily increasing shareholding on several occasions and provided details on how many shares Canal+ owns in its annual reports since 2021.

The timeline above overlays MultiChoice’s share price with its disclosures about Canal+ since 2019.

For our estimate, we assumed that where there was a sharp rise in MultiChoice’s share price just before a disclosure, it was likely due to Canal+’s buying activity.

We averaged the share price over these periods to calculate an estimate.

Using this method, we calculated that Canal+ spent roughly R17.2 billion for its current 35.01% stake in MultiChoice at an average buy-in price of R111 per share.

To buy the remainder of the company, it would have to pay close to R30.2 billion for a total purchase price of R47.4 billion.

Of note for the minimum price of Canal+’s mandatory offer was that it likely paid an average price of R75.62 for the almost 15 million shares it bought in January 2024.

The rules for mandatory offers state that the acquiring company can’t offer less than the highest price it paid for shares in the six months before the mandatory offer.

MultiChoice’s stock hit R92.92 on 16 January 2024 — its highest level since July last year.