MultiChoice CEO upbeat about R55-billion deal

MultiChoice CEO Calvo Mawela said their teams continue to make great progress on the Canal+ transaction, which is expected to be concluded later this year.

Last month, MultiChoice outlined the new structure it will adopt if French media giant Canal+’s buyout offer is approved.

Canal+ wants to acquire the shares in MultiChoice, which it does not already own, at R125 per share.

The French media giant has steadily increased its stake in MultiChoice over the past few years by buying shares on the open market.

When Canal+ hit the 35% threshold at the beginning of 2024, a mandatory buyout offer was triggered.

Canal+ offered R125 per share, valuing MultiChoice at around R55 billion. As Canal+ owns over 45% of MultiChoice, the buyout will cost it an estimated R30 billion in cash.

However, this deal faces significant hurdles, with foreign ownership regulations in South Africa being the most prominent.

The deal must get around the Electronic Communications Act (ECA), which limits foreign control of commercial broadcasting services to 20%.

MultiChoice has previously said its Memorandum of Incorporation (MOI) restrictions ensure its compliance with the ECA.

These restrictions ensure that voting rights for foreign owners in MultiChoice are collectively limited to 20%.

In a SENS announcement on Tuesday, 4 February 2025, MultiChoice explained how the company will be structured post-transaction.

The part of its business that holds the broadcasting licence in South Africa and the entity which contracts with South African subscribers will be carved out as LicenceCo.

The remainder of MultiChoice’s video entertainment assets will remain part of the MultiChoice Group.

LicenceCo will continue to hold the subscription broadcasting licence in South Africa and contract with MultiChoice’s South African subscribers.

In addition, LicenceCo will be majority-owned by historically disadvantaged persons, including:

• Phuthuma Nathi with a 27% economic interest.
• Black-owned firms Identity Partners Itai Consortium and Afrifund Consortium.
• Workers’ Trust (ESOP).

MultiChoice Group will hold 49% economic interest and 20% voting rights in LicenceCo to ensure ECA compliance.

The company will also retain 75% of MultiChoice South Africa – excluding LicenceCo – while Phuthuma Nathi keeps its 25% stake.

The Competition Commission and the Independent Communications Authority of South Africa (ICASA) are reviewing the Canal+ deal and MultiChoice’s new structure.

New announcement from MultiChoice

On 4 March 2025, MultiChoice said obtaining merger control clearance from the South African competition authorities and regulatory processes is ongoing.

However, due to the time it takes for the processes to be completed, they will not be completed by the previous long stop date of 8 April 2025.03.04

This was the date on which all the conditions for implementing the offer must be fulfilled or waived.

After consulting with the Takeover Regulation Panel (TRP), Canal+ has extended the long stop date for fulfilling the conditions to 8 October 2025.

MultiChoice and Canal+ said they believe the new date provides ample time for fulfilling the conditions.

Apart from the extension of the long stop date by Canal+, the terms of the offer remain unchanged.

Canal+ CEO Maxime Saada said the company’s decision to extend the long stop date reflects its recognition of positive progress linked to this deal.

“The timing of this transaction is critical, and we will continue working tirelessly to ensure finalisation of the transaction within this timeframe,” he said.

MultiChoice Group CEO Calvo Mawela said the teams continue to make great progress on this transaction.

“We remain committed to concluding a successful transaction that will create positive value for our customers, our shareholders and all other stakeholders in our ecosystem,” he said.

This article was first published by Daily Investor and is reproduced with permission.