The Competition Tribunal recently approved the R55-billion transaction, subject to several agreed-upon conditions, including a reorganisation of MultiChoice South Africa Holdings (MCSAH).
The transaction faced two major challenges that had to be overcome by a clever restructuring of the MultiChoice organisation to comply with local requirements.
Firstly, the Electronic Communications Act stipulates that foreign shareholders are limited to 20% of the voting rights of broadcasting licensees.
Secondly, the Independent Communications Authority of South Africa (Icasa) requires licensees to be 30% owned by historically disadvantaged individuals, including black people, women, and the disabled.
To comply with local regulations, MultiChoice (Pty) Ltd will be carved out as an independent entity to hold the South African operating licences. MultiChoice refers to this entity as LicenceCo.
MultiChoice Group is reducing its shareholding in LicenceCo, which holds its broadcasting licence in South Africa, to a 49% economic interest and 20% voting rights through transactions with four entities.
On or around 1 August 2025, MultiChoice entered into various subscription, repurchase, and shareholders agreements with Phuthuma Nathi, 13th Avenue Investments, Identity Partners Itai Consortium (IPIC), and the MultiChoice Workers Trust.
The Workers Trust is another broad-based ownership scheme established for the transaction. Its beneficiaries are employees of LicenceCo and key LicenceCo suppliers.
13th Avenue Investments comprises various investment vehicles associated with Sipho Maseko, Neo Lesela, Khanyisile Kweyama, and Philisiwe Sibiya. Maseko is well known in the telecoms industry as the former CEO of Telkom.
IPIC is owned by investment vehicles associated with Sonja de Bruyn, Maxell Nyanteh, Talaleni Moshapo, Ernest Kwinda, and Eugene Govender.
MultiChoice said these individuals were highly experienced leaders who held great commercial and industry knowledge.
The four entities will receive a mix of ordinary and notional vendor-funded shares. These shares will initially have limited rights but gradually convert to full shares as funding balances reduce.
Extraordinary dividend for shareholders
Phuthuma Nathi will acquire its shareholding in LicenceCo through a loan claim of R3.77 billion from MultiChoice, while 13th Avenue and IPIC will pay a combined R287 million for their shares.
Phuthuma Nathi also owns 25% of Orbicom, MultiChoice South Africa’s signal distributor, through an indirect shareholding in the MultiChoice South Africa Holdings (MCSAH) business.
This shareholding will be increased to 40% with Phuthuma Nathi taking a 20% direct stake in Orbicom.
The LicenceCo and Orbicom transactions will effectively result in MultiChoice disposing of 26% of its economic interest in LicenceCo and 15% of its economic interest in Orbicom.
MultiChoice said that the reorganisation does not require MultiChoice shareholder approval as it was a Category 2 transaction under JSE rules.
MultiChoice and Phuthuma Nathi shareholders will receive a R1.375 billion extraordinary dividend, of which R343.75 million will be attributable to Phuthuma Nathi.
“The payment of this extraordinary dividend is subject to the implementation of the steps in the Reorganisation which preceded the payment of this dividend,” MultiChoice said.
