DStv owner considering R35-billion cash buyout offer

MultiChoice has informed shareholders that it has established an independent board to consider Groupe Canal+’s offer to buy the shares of the company it does not yet own for around R35 billion.

Canal+ has offered to buy the outstanding shares for R125 each, valuing MultiChoice at around R55 billion.

The French media conglomerate made its formal mandatory offer last month after exceeding the 35% threshold stipulated in South Africa’s Companies Act.

In a statement issued on Monday, MultiChoice revealed that it had appointed Standard Bank as an independent expert to review the terms of the offer as required by South African takeover regulations.

It also announced the names of the independent board, which must provide an opinion on the offer and recommend to MultiChoice shareholders whether to accept or reject it.

The board comprises MultiChoice directors Deborah Klein, Dr Fatai Sanusi, Louisa Stephens, and Andrea Zappia.

Klein also currently serves as a non-executive director at Nationwide Building Society in the UK, XYON Health in Canada, and The Guardian.

Sanusi is a senior consultant in the UK National Health Service, having served in the position for 21 years at West Hertfordshire NHS Trust.

Stevens is a non-executive director at the Institute of Directors in Southern Africa, Strate, and Netcare.

Zappia is chairman of Showmax and MCH Group, in addition to serving on the board of EssilorLuxottica and MultiChoice.

MultiChoice has also revealed that Canal+ has continued to buy shares in the company.

“As at close of business on 5 April 2024, Canal+ held approximately 162,092,774 issued MultiChoice shares in aggregate, representing an ownership interest of approximately 36.6%,” the company said.

This is up from the roughly 35.01% it owned at the end of February that triggered the mandatory offer.

Canal+ must still buy 280,419,904 shares at R125 each — which comes to over R35 billion.

However, the French media giant is not waiting to buy these shares at R125 each.

“Canal+ (either itself or through wholly owned subsidiaries) reserves the right to acquire additional MultiChoice Shares in the market during the course of the Offer in accordance with applicable law,” MultiChoice stated.

“Any such acquisitions will be reported to the [Takeover Regulation Panel] and announced to MultiChoice shareholders,” it said.

“If Canal+ acquires any additional MultiChoice shares during the course of the Offer at a price higher than R125, then […] Canal+ will be obliged to increase the offer price,” explained MultiChoice.

Should this happen, Canal+ must increase its offer to not less than the highest price it has paid per share.

Canal+’s creeping takeover of MultiChoice began in 2020.

When its shareholding exceeded 20%, it raised concerns that it could be violating South Africa’s Electronic Communications Act (ECA).

It states that a foreigner may not, whether directly or indirectly:

• Exercise control over a commercial broadcasting licensee; or
• Have a financial interest or an interest either in voting shares or paid-up capital in a commercial broadcasting licensee exceeding 20%.

MultiChoice dismissed these concerns, saying compliance with the ECA is ensured through restrictions in its memorandum of incorporation, where voting rights for foreigners collectively are limited to 20%.