French firm tables offer for MultiChoice, agrees to play by BEE rules

MultiChoice has started talks to get a French multinational to buy the South African company for R125 per share.

Canal+ expressed its support for MultiChoice’s localisation strategy, saying it will continue efforts to foster broad-based black economic empowerment initiatives and the transformation of its South African business.

The companies made the announcement in a Stock Exchange News Service statement released on Monday.

“MultiChoice and Canal+ are pleased to announce that they have entered into a cooperation agreement regarding Canal+’s proposed mandatory offer for MultiChoice, as contemplated in Section 123 of the Companies Act, No. 71 of 2008,” reads the statement.

The companies revealed that the agreement comes after extensive engagements that took place between senior representatives of Canal+ and MultiChoice after the announcement on February 28 2024.

“On February 28 2024, MultiChoice advised that the Takeover Regulation Panel had issued a ruling on February 27 2024 that Canal+ had to immediately make a mandatory offer.”

Canal+ and MultiChoice stated they will use reasonable endeavours to cooperate in relation to the offer, including in relation to the fulfilment of the offer conditions and the publication of a combined offer circular.

It was also revealed that MultiChoice has granted to Canal+ certain customary exclusivity undertakings.

“Under the offer, each participating shareholder of MultiChoice will be entitled to elect to receive R125 for each ordinary share of MultiChoice held, which is significantly above the minimum price of approximately R105 required by the takeover regulations.”

The companies emphasised that the offer price of R125 per share represents a substantial premium of 66.66% to the closing price of R75, being MultiChoice’s closing share price on the last trading day prior to the delivery of Canal+’s non-binding indicative offer.

They added that the offer was 63.96% to R76.24, being MultiChoice’s 30-day volume-weighted average price on the last trading day prior to the delivery of the non-binding-indicative offer.

MultiChoice revealed that it has constituted an independent board, which has appointed Standard Bank as an independent expert to express a view on the fairness and reasonableness of the terms of the offer.

Said the multinational in a statement: “Canal+’s ambition is to build a global entertainment leader, with Africa at its heart, combining scale, complementary geographies, and international reach with strong local roots that will support the commercial development of Africa’s sporting and cultural industries and take leading and authentic African stories to a global audience.

“Canal+ recognises that the economic transformation of South Africa and broad-based black economic empowerment are imperatives and, upon implementation of the transaction, intends to support MultiChoice in its continued efforts to foster broad-based black economic empowerment initiatives and the transformation of its South African business.

“On February 5 2024, MultiChoice revealed that discussions between both firms had taken place for well over a year at the time.

“The MultiChoice board had concluded that the proposed offer price of R105 under the non-binding indicative offer did not provide a basis for further engagement, but that in keeping with its duty to act in the best interests of MultiChoice shareholders, the MultiChoice board remained open to engage with any party in respect of any offer that is for a fair price and is subject to appropriate conditions.”

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