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Canal+ mandated to extend offer to MultiChoice shareholders

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Vivendi SE’s Canal+ is obligated to make a mandatory offer for MultiChoice Group after augmenting its shareholding in the African pay-TV business to over 35% according to a recent ruling by South Africa’s Takeover Regulation Panel.

The ruling follows MultiChoice’s announcement on February 5, indicating that Canal+’s holdings surpassed the threshold stipulated by South African law, necessitating a mandatory offer to shareholders.

  • The decision by the Takeover Regulation Panel may potentially incentivize Canal+ to present an enhanced offer to MultiChoice shareholders.
  • This ruling adds a regulatory dimension to the ongoing negotiations between Canal+ and MultiChoice, creating a framework within which further discussions on shareholding and pricing will unfold. It provides Canal+ with an official mandate to extend an offer to MultiChoice shareholders, potentially opening a new chapter in the acquisition talks.

The dynamics of the negotiation process may shift as both parties navigate the regulatory landscape and shareholder interests. Canal+ now faces the strategic challenge of presenting a compelling offer that aligns with MultiChoice’s valuation expectations and meets regulatory requirements.

What we know

MultiChoice has also communicated its prerogative to limit the voting rights of shares held by foreign investors to 20%. This policy adds a layer of complexity to the negotiation process, prompting Canal+ to consider and navigate the implications of such restrictions on foreign ownership.

As the regulatory framework comes into play, MultiChoice shareholders will closely monitor the unfolding developments, looking for signals on the revised offer and Canal+’s strategy in addressing the concerns raised by the board. The outcome of this regulatory ruling may significantly influence the trajectory of the acquisition process and the ultimate agreement between Canal+ and MultiChoice.

Backstory

French media company Canal+ offered a $2.5 billion acquisition deal to MultiChoice, a Pan-African Pay-TV operator.

Canal+, led by French billionaire Vincent Bollore, proposed 105 rand per share in cash, presenting a 40% premium to MultiChoice’s recent closing price. This move aligns with Vivendi’s strategy to merge Canal+’s local operations with MultiChoice, creating a conglomerate with nearly 50 million subscribers.

Despite Canal+’s efforts, MultiChoice rejected the offer, citing the undervaluation of the company at the proposed R105 per share. The rejection was communicated to shareholders, emphasizing MultiChoice’s resistance to the acquisition terms.


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