French company Canal+ offers to acquire Multichoice for $1.7bn

Canal+, a French company, has offered to buy South African pay-TV gaint MultiChoice for approximately R31.7 billion ($1.7 billion).

Canal+ stated on Thursday that it has made a non-binding indicative offer to MultiChoice’s board to acquire all issued ordinary shares that it does not already own, subject to gaining the relevant regulatory permissions.

In its most recent annual report, MultiChoice disclosed that Canal+ owned 140,160,277 of its 442,512,678 issued shares.

According to local media, Canal+ has steadily purchased MultiChoice shares on the open market over the last four years, accumulating more than 30% ownership of the company.

Canal+ offered R105 per ordinary share, reflecting a 40% premium over MultiChoice’s closing share price of R75 on January 31. Canal+ would have to pay around R31.75 billion ($1.7 billion) to acquire the remaining shares.

The firm stated that the acquisition would transform MultiChoice into a global media powerhouse.

The chairman and Chief Executive Officer of the French television company, Maxime Saada, said in the statement, “For MultiChoice to continue to thrive in Africa, it will require a strategy that enhances its scale as well as strengthened local and global expertise.

“Our potential offer, if successful, would be an important next step for MultiChoice to realise its full potential.”

Meanwhile, the French company announced its ambition to list in reaction to parent company Vivendi’s plans to split into four businesses, with the ultimate goal of listing in South Africa.

“This will allow investors to benefit from the combination of Canal+ and MultiChoice, with our ultimate goal being to also obtain a listing in South Africa,” it stated.

“It is the ambition of Canal+ to create an African media business with enhanced scale that can thrive in a competitive international market, better serve its consumers with a world-leading offering of sports and local and global content, and ensure that Africa can tell her story to a global audience on her terms.

“However, the media industry in which MultiChoice is operating is becoming increasingly globalised and competitive, with regional media companies having to compete with the firepower of global media titans with enormous resources to invest in content, marketing, and technology,” part of the statement read.

The firm said that scale was the only way to survive and thrive in the environment.

“A combination between Canal+ and MultiChoice would create a group with significant scale, putting MultiChoice on a secure long-term path and enabling the company to thrive.

“Should this combination not proceed, this lack of scale is likely to become a more acute problem in the coming years, risking the company’s status as the preeminent media company in Africa and impacting its mid-term trajectory,” the firm said.

In November 2023, MultiChoice Group stated that its user base had increased by 69% in the previous six months.

In a statement, the business stated that it met its operational targets during the six months ending September 30, 2023 (1H FY24).

Canal+ is a French premium television channel that premiered in 1984. It is wholly owned by Groupe Canal+, which is in turn owned by Vivendi.