Former Telkom CEO linked to MultiChoice deal

Former Telkom CEO Sipho Maseko has been linked to the deal where Canal+ seeks to acquire DStv-owner MultiChoice.

Canal+ is a significant shareholder in MultiChoice and has steadily increased its stake in the DStv owner over the past few years.

It hit a 35% shareholding threshold at the beginning of this year, triggering a mandatory buyout offer.

After some back-and-forth, the French media and telecommunications conglomerate offered MultiChoice R125 per share, which the company accepted.

Canal+ continued to buy MultiChoice shares on the open market and currently owns around 45% of the company.

The synergies between Canal+ and MultiChoice could see them dominate the African pay-TV market and unlock numerous efficiencies.

However, there are many hurdles. The Electronic Communications Act (ECA) states that a foreigner may not exercise control over a commercial broadcasting licensee.

It further states that no more than 20% of the directors of a commercial broadcasting licensee may be foreigners.

Another hurdle is the Independent Communications Authority of South Africa’s (ICASA’s) ownership rules for telecommunications operators and broadcasters.

The control and equity ownership regulations, published on 31 March 2021, require licensees to have 30% ownership by Black people and historically disadvantaged people.

Broadcasting licensees must also achieve Level 4 Broad-Based Black Economic Empowerment (BBBEE) status.

Canal+, as a foreign company, will therefore not be able to control the board or exercise control over MultiChoice.

MultiChoice and Canal+ are working with the authorities, including ICASA and the Competition Commission, to get approval for the deal.

This will require innovative ways to abide by South Africa’s black ownership and local control requirements.

MultiChoice CFO Tim Jacobs said they are engaging with all the relevant regulatory authorities to streamline the process and close the deal as quickly as possible.

Partnership with Sipho Maseko on the cards

Africa Intelligence reported that the Vivendi-owned Canal+ is considering an alliance with Maseko.

Through this partnership, Canal+ wants to ensure it meets the 30% black ownership requirement for the MultiChoice deal.

The publication added that Maseko “could join MultiChoice either as a shareholder via a local company or as a director of the merged company”.

Earlier this year, Bloomberg reported that Patrice Motsepe’s African Rainbow Capital was in talks with Canal+ to join its bid for MultiChoice.

“Discussions are at an early stage, and there is no guarantee that an agreement will be reached,” Bloomberg said.

However, Africa Intelligence reported that this option was abandoned mainly due to the risk of a conflict of interest.

Motsepe is the president of the Confederation of African Football, while MultiChoice is a leader in sports broadcasting.

Maseko, as the founder and executive chairperson of Afrifund Investments, is well positioned to fulfil the BEE and black ownership mandate.

Afrifund Investments is a black-owned investment company with level 1 Broad-Based Black Empowerment accreditation.

It targets companies that either show high growth potential or are strong market leaders in their sectors and require capital and strategic value-adds.

Maseko, who served as Telkom’s chief executive between 2013 and 2021, is highly experienced in working with the government and telecommunications regulators.

Telkom is a state-owned company with the South African government as its largest shareholder.

He also served as a non-executive director of the Centre for Development and Enterprise and as chairman of South African Petroleum Refineries (SAPREF).

Maseko is ready for a big Afrifund Investments after a bid to buy a significant stake in Telkom failed in 2023.