Canal+ increases offer to buy MultiChoice — to R35.9 billion

French media giant Groupe Canal+ has tendered its mandatory offer to buy out the 64.99% of MultiChoice stock it does not yet own for R125 per share.

This comes a day after the company was granted an extension until 5 April 2024 to make its offer.

Canal+ increased its stake in the DStv operator to 35.01% earlier this year.

This triggered a clause in the South African Companies Act forcing it to make an offer to buy the rest of the company.

Canal+ immediately offered to buy the company for R105 per share.

However, the Takeover Regulation Panel did not consider this its mandatory offer as required by legislation.

The regulator ordered Canal+ to make a formal offer in terms of the legislation immediately.

Canal+ has now made that mandatory offer.

“While the minimum price for the Mandatory Offer […] is approximately R105 per MultiChoice ordinary share, Canal+ has agreed to increase the price to make the Mandatory Offer at a cash consideration of R125 [per share],” the company said.

Canal+ and MultiChoice advised shareholders that they intend to mutually cooperate in this regard.

They also said that MultiChoice will give customary exclusivity undertakings to Canal+.

“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,” the companies stated.

“Nothing in this announcement should be read as limiting in any way the giving of such opinion.”

According to MultiChoice’s financial reports, it has 442,512,678 ordinary shares in issue.

As of February 2024, Groupe Canal+ owns approximately 154,923,689 (35.01%) of these shares.

To buy the remaining 287,588,989 shares at R125 each would cost over R35.9 billion.

MyBroadband recently analysed Canal+’s creeping takeover of MultiChoice to estimate how much it paid for its 35% stake.

MultiChoice has disclosed Canal+’s steadily increasing shareholding on several occasions and provided details on how many shares Canal+ owns in its annual reports since 2021.

The timeline above overlays MultiChoice’s share price with its disclosures about Canal+ since 2019.

For our estimate, we assumed that where there was a sharp rise in MultiChoice’s share price just before a disclosure, it was likely due to Canal+’s buying activity.

We averaged the share price over these periods to calculate an estimate.

Using this method, we calculated that Canal+ spent roughly R17.2 billion for its current 35.01% stake in MultiChoice at an average buy-in price of R111 per share.

If its mandatory offer is accepted, Canal+ would have acquired MultiChoice for just under R53.2 billion.