Development Alert: Canal Plus Increases Offer To Buy MultiChoice For R35.9 Billion

French media giant Canal+ has increased the price it is offering to buy DStv owner MultiChoice by about 19% to R125 per share.

The companies said in a joint statement on Tuesday morning, a day after Canal+ said it was granted an extension to April to make a mandatory offer, that the European company had also been granted exclusivity as the company considers its offer. An earlier non-binding offer of R105 per share, was rebuffed by the board of Africa's biggest pay-TV operator in February as too low.

This effectively values MultiChoice at over R55 billion on the JSE.

"Once the mandatory offer is made, the independent board of MultiChoice will be constituted and will, after receipt of the independent expert's opinion, provide its opinion and recommendation on the mandatory offer," the parties said in the statement.

Last week, the Takeover Regulation Panel (TRP) ruled that Canal+ had to make the offer "immediately" after concluding SA's restrictions on foreign ownership don't sterilize all of its voting rights.

On Monday, Canal+ said it applied for and received an exemption from the TRP from adhering to the timing requirements and was given an extension of 25 working days. This means that it will have to make the offer on 8 April.

Canal+ also recently increased its stake in the group to over 35% from 31.7%, just above a threshold requiring the company to make a mandatory offer to shareholders. Complicating matters, however, is the fact that SA's Electronic Communications Act of 2005 limits foreign ownership of local broadcast licences. This means Canal+ can increase its shareholding in MultiChoice to any level, but its voting rights are limited to a maximum of 20%.

MultiChoice then applied to the regulator to make a ruling on whether an offer must be made, with deputy executive director Zando Ntuli concluding in a ruling that it must.

Canal+, whose parent is Vivendi, operates in 50 countries across Europe, Africa and Asia, directly serving 8 million customers in Africa. It had about 25 million total subscribers as of its 2023 year, while MultiChoice had 23.5 million.

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