Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Vivendi's Canal Plus offers to buy rest of South Africa's MultiChoice

Published 01/02/2024, 06:45
Updated 01/02/2024, 13:46
© Reuters.

By Nqobile Dludla

JOHANNESBURG (Reuters) -Vivendi's Canal Plus has offered to buy all the shares it does not own in South Africa's MultiChoice Group for roughly $1.7 billion to strengthen its hand in a competitive international pay TV market.

Canal Plus, the top shareholder in MultiChoice with a 31.67% stake according to LSEG data, said it would likely pay 105 rand in cash per share, a 40% premium to MultiChoice's closing share price on Wednesday.

Shares in MultiChoice surged in Thursday trade but remained below the offer price. They were last up 24.83% at 93 rand.

Canal Plus said its offer, worth 31.7 billion rand according to Reuters calculations, was non-binding and indicative but that it expected to deliver a letter of firm intention to MultiChoice's board once due diligence has been completed.

MultiChoice, which operates in 50 countries in sub-Saharan Africa, said it had received a letter from the French media company and would update shareholders on any developments.

Michael Steere, equity research analyst at Avior Capital Markets, said while a merger offered benefits of scale, the proposed price "materially undervalues the group".


"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," Maxime Saada, chairman and CEO of Canal Plus, said in a statement.

MultiChoice has over the years invested billions of rand to fight off competition from international streaming giants such as Netflix (NASDAQ:NFLX), Amazon (NASDAQ:AMZN) and Disney. Netflix, for example, has also been investing in local content.

Saada added the deal would give MultiChoice the resources to invest more in African talent and stories.

As part of MultiChoice's efforts to fight off competition, it partnered last year with Comcast (NASDAQ:CMCSA)'s NBCUniversal and Sky to revamp MultiChoice's Showmax streaming service, which now offers live Premier League soccer matches.

Canal Plus also said it was planning a stock market listing following proposals by parent company Vivendi (EPA:VIV) to split into four entities, including ultimately a listing in South Africa.

This could potentially help Canal Plus overcome regulatory hurdles that include a law that restricts foreign companies from holding more than 20% of the voting rights of a South African broadcaster, Steere said.

© Reuters. FILE PHOTO: The logo of French TV channel 'Canal Plus' is pictured outside a company building in Issy-les-Moulineaux near Paris, France, August 17, 2022. REUTERS/Sarah Meyssonnier/File Photo

Canal said it respected and observed all laws and regulations relating to South Africa's media sector and listed companies, and any firm offer would be mindful of this.

($1 = 18.7137 rand)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.