Groupe Canal+ has raised its offer to buy all the shares of JSE-listed MultiChoice Group that it does not already own, the two companies said on Tuesday.
Canal+, the biggest shareholder in MultiChoice, with a 35% stake, has agreed to raise its bid to $6.56/share, or 19%, from its earlier offer price of $5.52/share.
On Monday, it emerged that Canal+ requested, and received, an extension to the Takeover Regulation Panel’s ruling that it had to make a mandatory offer to MultiChoice shareholders after the South African broadcaster had rejected a R105/share offer, saying it significantly undervalued the group.
“Following further discussions, Canal+ and MultiChoice have agreed to advise MultiChoice shareholders that while the minimum price for the mandatory offer in terms of regulation 111(2) of the takeover regulations is approximately $5.52 per MultiChoice ordinary share, Canal+ has agreed to increase the price to make the mandatory offer at a cash consideration of $6.56 per MultiChoice ordinary share,” the JSE-listed group said in a statement to shareholders before markets opened in Johannesburg on Tuesday.
“MultiChoice and Canal+ intend to mutually co-operate in this regard. Accordingly, MultiChoice
will give customary exclusivity undertakings to Canal+,” it said.
“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.”
Hurdles
MultiChoice shares, which closed at $5.72 on Monday, are likely to surge higher when markets open at 9am in Johannesburg.
However, even if the deal gets approval from shareholders, Canal+’s efforts to acquire MultiChoice could still be stymied by legislation that caps voting control of South African broadcasting licensees by foreign entities at 20%. This restriction is contained in the Electronics Communications Act.
If Canal+ is able to overcome that restriction somehow, it will also have to get the deal approved by South Africa’s competition authorities, which are likely to launch an investigation into the impact on competition in the local broadcasting industry.
