South Africa’s leading TV giant, MultiChoice, has officially turned down a substantial buyout offer from French media giant Canal+. The rejection, announced on Monday, stems from MultiChoice’s assertion that the proposed $2.5 billion deal significantly undervalues the company and raises concerns about foreign ownership.
Canal+, which already holds a 31.7% stake in MultiChoice, recently made an offer to acquire the remaining shares at 105 rand ($5.5) each. This move would result in a potential R46-billion deal, making MultiChoice South Africa’s only pay-TV channel owned by a foreign group.
Despite Canal+’s proposal to buy all ordinary shares at a 40% premium over the closing share price on January 31, 2024, MultiChoice contends that a recent valuation exercise values the company at $2.5 billion, contradicting Canal+’s assessment.
In a statement issued by MultiChoice, the company expressed disappointment with the proposed offer, stating, “After careful consideration, the board has concluded that the proposed offer price of R105 in cash significantly undervalues the Group and its future prospects.” The board conveyed to Canal+ that, at this proposed price, further engagement is not warranted.
MultiChoice, known for its brands DStv and Showmax, boasts a substantial subscriber base of 22 million across Africa, with 8.6 million in South Africa alone. This rejection marks a significant development in the ongoing relationship between the two media giants.
Canal+, a subsidiary of the Vivendi group led by billionaire Vincent Bollore, has been gradually increasing its stake in MultiChoice over the past four years, now holding over 30% of the company. The French company aims to create an African media business with enhanced scale, focusing on sports, local and global content, and ensuring Africa’s stories reach a global audience.
While MultiChoice rejects the current buyout offer, the board remains open to engaging on any offer at a fair price, emphasizing a commitment to maximizing shareholder value. The rejection raises questions about the future dynamics between the two companies and the broader implications for the African media landscape.
By Shalom O. Obisesan