Canal+ bought over 3.3 million MultiChoice shares over the last week and now owns 41.6% of the pan-African broadcaster, filings show. The French broadcaster bought the shares at an average price of R116 a share, a discount on the R125 a share offer Canal+ submitted to MultiChoice shareholders.
Canal+’s buying of MultiChoice shares began in 2020. By February 2024, the broadcaster’s stake in MultiChoice had passed the 35% threshold, at which South African law mandated Canal+ to present a mandatory offer for all outstanding MultiChoice shares. The offer was accepted and negotiations for a transaction are currently ongoing, with MultiChoice stating this week that they are entering the “next phase”.
Canal+ is shaving millions off the $1.9 billion offer submitted to MultiChoice a fortnight ago by buying shares on the open market. South African law stipulates that Canal+ can continue buying the shares but if it reaches 50% shareholding, the deal will be regulated as a merger instead of an acquisition. MultiChoice on the other hand is not allowed to issue any more shares.
MultiChoice shares are still trading at a discount to the mandatory offer submitted, a situation analysts attribute to the market needing more confidence about the completion of a transaction. “The market does not want to get ahead of itself [about a deal] but Canal+ is not missing the opportunity to buy shares at a discount,” said Jimmy Moyaha, founder of investment firm Lebowa Capital.
Nevertheless, the two companies announced this week that they have signed a cooperation agreement to see the deal through. MultiChoice also announced that chair of the board Imtiaz Patel would be stepping down as significant progress on a transaction was being made. Patel’s tenure, which was supposed to end on March 31, was extended as MultiChoice sought his advice and expertise in the negotiations.