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MultiChoice Group Rejects $1.69bn Offer from Canal Plus

MultiChoice Group Rejects $1.69bn Offer from Canal Plus

South Africa’s MultiChoice Group announced on Monday that it will not pursue further discussions with Vivendi’s Canal Plus, as the company’s board believes that the offered price significantly undervalues MultiChoice.

Canal Plus, a major shareholder in MultiChoice, had proposed to acquire the remaining MultiChoice shares at 105 rand ($5.55) per share. This offer, valued at 31.7 billion rand according to Reuters calculations, represented a 40% premium to MultiChoice’s closing share price on January 31, which was 75 rand.

In a statement, MultiChoice highlighted that recent evaluations have shown the group’s value to be substantially higher than the offered price. Additionally, potential synergies resulting from the proposed deal were not factored into this assessment.

Africa’s biggest pay TV company added that the synergies that Canal Plus has conveyed “need to be factored into any fair offer made” by the French company.

“Therefore, while the board is open to all means of maximising shareholder value, it has conveyed to Canal+ that at this proposed price, the letter does not provide a basis for further engagement,” MultiChoice said.

The board, however, remains open to engage with any party in respect of any offer which is for a fair price, it added.

Canal Plus had said its offer was non-binding and indicative but had expected to deliver a letter of firm intention to MultiChoice’s board once due diligence had been completed.

Canal Plus, which as of Thursday held a 31.67% stake in MultiChoice, raised it stake to 35.01% following the deal’s announcement, MultiChoice said in a separate statement.

As a result, MultiChoice has requested the Takeover Regulation Panel to make a ruling as to whether a mandatory offer must be made to all holders of ordinary shares in the company according to the Companies Act.

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