Canal+ acquires additional multichoice shares to inch over 40% ownership

French media company, Groupe Canal+ has announced that it has acquired 3,653,492 additional shares in media giant, MultiChoice to bring its total ownership of the South African company to 40.83%. This is exactly after Canal+ increased its shareholding in MultiChoice to 40.01%.

In a notice to MultiChoice shareholders, Canal+ claimed it acquired the additional shares from 12 to 17 April for R115.95 ($6) and R117.50 ($6) per share. “Canal+ confirms that these acquisitions have already been disclosed to the Takeover Regulation Panel (TRP) as required under the Companies Act,” the company said.

The French media company also indicated its intention to acquire more shares soon. “Save as may be prohibited under the Companies Act and the Takeover Regulations, Canal+ may acquire further MultiChoice Shares after the date of this announcement”, the statement said.

Canal+ crossed the 40% ownership bar last week…

Canal+’s latest disclosure comes a week after MultiChoice announced that the French company had crossed 40% ownership of South Africa’s pay-TV giant. MultiChoice notified shareholders about Canal+’s increased shareholding in a statement on the JSE news service last Friday.

In the announcement, Multichoice assured shareholders that the incremental share acquisition would not lead to a merger or acquisition soonest.

“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”, the company said.

The company reassured investors that should Canal+ buy shares for more than R125 each, it would be obliged to increase its offer price to match.

Canal+’s race to takeover Multichoice

Canal+’s bid to takeover MultiChoice began in 2020 with the French media group making clear its intention to create a pan-African broadcasting powerhouse with about 31.5 million subscribers across over 50 countries. 

The French media company has a broad reach in French-speaking African nations, while MultiChoice has a stronger presence in English-speaking countries, including South Africa, Nigeria and Kenya.

Canal+ said it believes the competitive landscape for Africa’s media and entertainment industry will undergo further profound changes as the continent rapidly adopts broadband and mobile internet. Smartphone adoption is also rising.

The French media conglomerate made its formal mandatory offer last month after exceeding the 35% threshold stipulated in South Africa’s Companies Act. When its shareholding exceeded 20%, analysts raised concerns that the company could be violating South Africa’s Electronic Communications Act (ECA). The ECA is a stringent Black economic ownership requirement on foreign media ownership that caps voting rights at 20%.

Maxime Saada, chairman and CEO of Canal+ Group, told Reuters there are workable solutions around that which “of course will require us to have local partners”. Similarly, 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%.

Consequently, MultiChoice, last week, informed shareholders that it established an independent board to consider Groupe Canal+’s offer to buy the shares of the company that it does not already own as required by South African takeover regulations. The board comprises MultiChoice directors Deborah Klein, Dr Fatai Sanusi, Louisa Stephens, and Andrea Zappia.

Meanwhile, Canal+ reserved the right to continue buying MultiChoice shares on the open market while buyout negotiations continued, the companies said. And, MultiChoice revealed last week that Canal+ has continued to buy the company’s shares

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

Analysts believe that the emerging media platform will put African content to global audiences and position them to compete internationally.