• MultiChoice and Canal+ have issued a cooperation agreement in respect of the mandatory acquisition offer from Canal+.
• In order to acquire the firm, Canal+ has offered to pay R125 per ordinary share of MultiChoice.
• The acquisition will only move forward if MultiChoice accepts the offer and it’s not clear if it intends to do that.

The first few months of 2024 have been marked by French media giant Canal+ attempting to acquire local media conglomerate MultiChoice.

The French firm originally offered to pay R75 per MultiChoice ordinary share to acquire the firm, but MultiChoice rejected this offer. However, before it made this offer, Canal+ acquired 35.01 percent of MultiChoice’s shares. This triggered a clause in the Companies Act which compelled Canal+ to make a mandatory offer which its first offer didn’t qualify as.

Now the latest news from this situation has the media conglomerate considering the Canal+ offer.

On Sunday the pair of firms announced they had entered into a cooperation agreement in which Canal+ has offered to pay R125 per MultiChoice ordinary share to acquire the firm. This represents a 66 percent premium on the price shares were trading at on 1st February, the day before Canal+ made its non-binding indicative offer.

As of 5th April, Canal+ held 162 092 774 MultiChoice shares, representing 36.6 percent of MultiChoice’s 442 512 678 total ordinary shares. Canal+ will need to cough up a little over R35 billion to acquire the remainder although, per a SENS announcement if can continue to purchase shares while MultiChoice mulls over this offer.

“If Canal+ acquires any additional MultiChoice Shares during the course of the Offer at a price higher than ZAR 125.00, then in terms of Regulation 111(6) of Chapter 5 of the Takeover Regulations, Canal+
will be obliged to increase the Offer Price (as defined below) to not less than the highest consideration paid per MultiChoice Share so acquired, and will do so accordingly,” MultiChoice said in its announcement.

With that in mind, it is likely to move fast in making a decision here lest Canal+ hoover up the remaining shares.

The French firm says that acquiring media conglomerate is part of its vision to build a global entertainment leader that can compete with over-the-top platforms such as Netflix

“A combined group would be better positioned to address key structural challenges and opportunities resulting from the progressive digitalisation and globalisation of the media and entertainment sector. This could have significant benefits for the African creative and sports ecosystems, for example, by enabling high-quality content created on the continent to be distributed to an international audience,” reads the joint statement from Canal+ and MultiChoice.

Should MultiChoice accept the offer, it will announce the decision to its shareholders. The firm didn’t say when it intends to make a decision but we suspect it won’t be long until we hear more.

From where we’re sitting though, it looks like media conglomerate may just take the offer. Let’s see how this plays out.