• Last week Canal+ offered to purchase MultiChoice for R105 per share.
• Despite the 40 percent premium on the price of shares, MultiChoice has rejected the offer stating that the price undervalues the group.
• MultiChoice says it is still open to other, fair offers.

Last week MultiChoice received what looked to be an enticing acquisition offer from French media company, Canal+. The offer saw Canal+ offering MultiChoice R105 per ordinary share, a 40 percent premium compared to the price of R75 that shares were trading at a day before.

Despite this premium offer, however, the media company has rejected it.

In an announcement to shareholders this morning, it said that after careful consideration its board of directors said the offer, “undervalues the Group and its future prospects”.

The broadcaster says that it has recently conducted a valuation exercise and it determined that MultiChoice was valued significantly above R105 per share.

“MultiChoice’s valuation excludes any potential synergies which may arise from the envisaged transaction. In this regard Canal+ has, following the lengthy discussions between the parties, repeatedly conveyed to the public what it sees as the advantages of the combined entity and therefore seemingly takes the view that there are significant synergies. These synergies need to be factored into any fair offer made by Canal+,” MultiChoice told its shareholders.

While the board of directors is tasked with extracting the maximum value for shareholders, this offer doesn’t seem to meet that definition. However, the broadcaster isn’t opposed to fielding other offers at a “fair price”.

Considering MultiChoice reported revenue of R59.1 billion in its 2023 financial year, combined with the rejected Canal+ offer, whoever decides to make an acquisition offer will have to dig deep into their pockets.

[Image – Andrew Martin from Pixabay]