Multichoice Group has rejected Canal+ 2.5 billion offer saying the offer undervalues the group and its future prospects as Africa’s biggest media conglomerate.
Multichoice shareholders, through the Board of Directors (‘the Board’) said the delivery of the Canal+ offer letter took place after longlasting discussions between Canal+ and MultiChoice but the board says Canal+’s non-binding intention to acquire the remainder of the entire issued share capital of MultiChoice for a proposed price of R105 per share in cash hugely undervalues the firm.
“After careful consideration, the Board has concluded that the proposed offer price of R105 in cash significantly undervalues the Group and its future prospects,” announced the Board adding that it reached this conclusion after a valuation exercise, which valued
MultiChoice significantly above R105 a share. MultiChoice also adds that it’s valuation excludes any potential synergies which may arise from the envisaged transaction.
“Therefore, while the Board is open to all means of maximising shareholder value, it has conveyed to Canal+ that – at this proposed price – the letter does not provide a basis for further engagement. Caution is accordingly no longer required to be exercised by shareholders when dealing in their securities. In keeping with its duty to act in the best interests of the Company, the Board remains open to engage with any party in respect of any offer which is for a fair price and is subject to appropriate conditions,” the Board announced.
Last week, Canal+, a France-based pay-TV broadcaster owned by Vivendi Group proposed to acquire 100 percent of South Africa’s MultiChoice Group, the owner of DStv, GOtv, SuperSport, Mnet and Showmax for ZAR105 ($5.62) per ordinary share expecting further engagements with MultiChoice Group for a cash consideration for the remaining shares.
Canal +, which owns 31% of Multichoice had expect to run the continent’s biggest media businesses with cable TV service DStv and GOtv, sports streaming channels SuperSport and Netflix competitor Showmax coupled with its deep experience in producing and distributing local content and sports coverage and sees this as vitally important for its business model and the future success of media businesses in Africa and beyond.
Vivendi’s CANAL+ Group acquired Lagos-based ROK, an IROKO+ incubated African film studio and international TV network as it looks to strengthen its content production reach in Nigeria and across Africa. ROK will produce thousands more hours of Nollywood content to deliver movies and original TV series for CANAL+ Group’s audiences in FSA while CANAL+ Group will continue to collaborate with IROKO Ltd, with non-exclusive content distribution of ROK content via the IROKOtv SVOD app.