The people behind new MultiChoice BEE deal

Former Telkom CEO Sipho Maseko and BEE deal veteran Sonja de Bruyn have been confirmed as two of the parties involved in an over R30-billion transaction between MultiChoice and French media conglomerate Groupe Canal+.

MultiChoice Group announced yesterday how it would restructure to comply with regulations on local ownership and foreign control of South African broadcasters should the Canal+ deal be approved.

This includes carving out MultiChoice (Pty) Ltd as an independent entity. It will hold the relevant local operating licences and continue to contract with MultiChoice’s viewers in South Africa.

Canal+ offered to acquire MultiChoice after buying over 35% of the company’s shares on the open market, triggering a condition in South African law requiring it to make a mandatory buy-out offer.

The French media giant steadily bought up MultiChoice stock since October 2020 and hit the threshold at the beginning of 2024.

After a reprimand from the Takeover Regulation Panel and some wrangling between the two companies, Canal+ offered R125 per share, valuing MultiChoice at over R55 billion.

Canal+ continued buying MultiChoice shares while its offer was being considered, with the Takeover Regulation Panel last reporting in May 2024 that Canal+’s shareholding stood at 45.2%.

Although Canal+ was mandated by law to put in an offer to acquire MultiChoice, several regulatory hurdles must be overcome.

For the transaction to proceed, the companies need approvals from the Financial Surveillance Department, Competition Tribunal, the JSE, Takeover Regulation Panel, and the Independent Communications Authority of South Africa (Icasa).

ICT policy legal expert Lisa Thornton previously told MyBroadband that the deal’s success would depend on its structure.

Specifically, the companies would need to find a way to limit Canal+’s voting rights in MultiChoice to 20% — a requirement for broadcasting licensees under the Electronic Communications Act.

Additionally, the transaction will have to meet Broad-based Black Economic Empowerment (BBBEE) rules set out by industry regulator Icasa, which says licensees must be 30% owned by historically disadvantaged individuals.

To address these two major regulatory concerns, MultiChoice (Pty) Ltd will be carved out of the group structure and hold its South African operating licences. MultiChoice refers to this entity as LicenceCo.

The remainder of the company’s video entertainment assets will remain part of the MultiChoice Group.

LicenceCo will be majority-owned by historically disadvantaged persons, as follows:

• Phuthuma Nathi, MultiChoice’s BEE share scheme, will ultimately hold a 27% economic interest
• Two well-established black-owned and managed companies, Identity Partners Itai Consortium and Afrifund Consortium, will each hold stakes
• An Employee Stock Ownership Plan in the form of a Workers’ Trust

MultiChoice and Canal+ said Identity Partners and Afrifund bring highly experienced leaders with great commercial and industry knowledge.

Afrifund Consortium — Sipho Maseko

Former Telkom Group CEO Sipho Maseko is the founder and executive chairman of Afrifund.

Maseko was appointed Group CEO of Telkom in April 2013 and served as an executive director until December 2021.

Before joining Telkom, he served as group chief operating officer and managing director at Vodacom.

Prior to Vodacom, he held various roles at BP starting in 1997, serving as the CEO of BP Southern Africa from 2008 to 2012 and chief operating officer before that.

He has also served as chairman of the board of Sapref and as non-executive director of Afrox and BMW South Africa.

Identity Partners — Sonja de Bruyn

Sonja de Bruyn is the principal partner of Identity Partners and has 22 years of transacting and corporate finance advisory experience in mergers and acquisitions in South Africa and abroad, including BEE transactions.

De Bruyn was previously a vice president at Deutsche Bank, South Africa and currently serves as a non-executive director on the boards of RMB Holdings, RMI Holdings, Discovery Holdings, and Remgro Group.

She holds an LLB (Honours) degree from the London School of Economics, an MA in Economics and Business from McGill University in Montreal, and she completed the Harvard Executive Programme in 2012.

De Bruyn was recently embroiled in a legal battle between Dimension Data (now NTT Data) and former executives accused of manipulating a BEE deal for their own profit.

The BEE deal in question was the sale of The Campus business park in Bryanston to Identity Fund Managers for around R1.3 billion. The property was reportedly valued at R1.6 billion.

When NTT Data initially confirmed its investigation into the deal in 2022, it said that De Bruyn and Identity Fund Managers were not implicated in the review.

It explained that De Bruyn was a long-standing director of Dimension Data at the time but recused herself from matters relating to the transaction.

However, NTT Data later said it would take legal action against De Bruyn and Identity Fund Managers partner Janice Johnston.

Responding to MyBroadband’s questions at the time, Johnston said that NTT Data had made a mistake in its media statement as neither she nor De Bruyn were mentioned in the court papers.

She said NTT Data’s attorneys had also informed them that the company would not pursue legal recourse against them.

While the case brought before the Johannesburg High Court did ultimately cite Identity Fund Managers as a respondent, the judge’s ruling absolved De Bruyn and Johnston of any wrongdoing.

According to the ruling, Identity Fund Managers was essentially pushed out of The Campus transaction by the agent of six former Dimension Data executives, including cofounder Jeremy Ord.

However, Ord and the executives maintain their innocence. They said the judge drew her conclusions based on emails that had nothing to do with The Campus transaction and complained that she ruled without giving them a hearing in court.

Judge Denise Fisher recently granted the executives leave to appeal her ruling in the Supreme Court.