French media firm Vivendi’s Canal+, on Monday, initiated an all-cash obligatory bid to acquire all remaining shares of South African broadcaster MultiChoice, valued at 35 billion rand ($1.9 billion), according to both entities.
Following an indicative offer of 105 rands per share made by Canal+ on February 1st, which MultiChoice rejected on the grounds of undervaluation, comes this offer of 125 rands per share. Canal+, MultiChoice’s largest shareholder, increased its stake in the company above the 35 percent threshold, necessitating the required offer.
Based on calculations by Reuters, MultiChoice, in which it currently holds a 36.6% interest, is valued at approximately 55 billion rand according to its new offer.
Through the agreement, a pan-African broadcasting powerhouse with over 31.5 million customers spread across more than 50 nations would be formed, enabling it to compete internationally and expose African content to a global audience.
While MultiChoice is more prevalent in English-speaking nations like South Africa, Nigeria, and Kenya, the French media firm is more widely distributed throughout French-speaking African countries.
Canal+ stated that as the continent rapidly adopts broadband and mobile internet, it expects significant changes to the competitive landscape for Africa’s media and entertainment sector. Smartphone usage is also on the rise.
According to the companies, “a combined group would be better positioned to address key structural challenges and opportunities resulting from the progressive digitalization and globalization of the media and entertainment sector.”
The bid will now be reviewed by MultiChoice’s independent board, established for the transaction. According to the agreement, Canal+ has the option to purchase more MultiChoice shares on the market at the time of the offer. According to the announcement, the French corporation must raise the offer price if it purchases these shares for more than 125 rands each.
In the meantime, the French broadcaster will have to navigate the nation’s stringent Black economic ownership criteria and prohibitions on foreign media ownership, which restrict voting rights to twenty percent, for the purchase to succeed.
