South Africa’s biggest pay-TV company now 40% owned by French media conglomerate

French media conglomerate Groupe Canal+ has increased its shareholding in DStv owner MultiChoice to 40.01%.

MultiChoice notified shareholders about Canal+’s increased shareholding in a statement on the JSE news service on Friday.

“Some shareholders have asked whether Canal+ might cross the 50% shareholding in this way,” MultiChoice stated.

“We do not envisage this happening as exceeding 50% ownership would amount to a merger under the Competition Act, which would require prior approval from the Competition Tribunal.”

MultiChoice also reaffirmed that should Canal+ buy shares for more than R125 each, it would be obliged to increase its offer price.

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.

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

By close of business on 5 April 2024, Canal+ had already increased its stake from 35.01% to 36.6%.

Canal+ also reserved the right to continue buying MultiChoice shares on the open market while buyout negotiations continued, the companies said.

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

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%.