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France's Canal+ targets acquisition of SA's MultiChoice

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French pay-TV company Canal+ has submitted an offer to acquire South African pay-TV and streaming company MultiChoice Group.

In a statement issued via the Johannesburg Stock Exchange (JSE), MultiChoice confirmed that it had received an offer from Canal+ to purchase MultiChoice Group.

"MultiChoice has received a letter from a French media company, Groupe Canal+ SA, indicating its high-level non-binding intention to acquire the remaining ordinary shares in MultiChoice that it does not currently own," the JSE statement said.

The offer is, however, subject to obtaining the necessary regulatory approvals.

Canal+ confirmed that it plans to offer 105 South African rands (US$5.60) per MultiChoice ordinary share – which represents a 40% premium on MultiChoice's closing share price on the JSE of R75 ($4) on January 31, 2024.

MultiChoice's relationship with Canal+

According to a regulatory filing in July 2023, Canal+ already holds 31.7% of MultiChoice's equity.

Because the Canal+ shareholding is close to 35%, according to South Africa's competition rules, Canal+ would have to make a mandatory offer to MultiChoice minority shareholders to buy out the company.

Canal+ will move ahead with a due diligence process and submit a firm buyout offer to MultiChoice's board once the board indicates it is open to talks.   (Source: Image by Freepik)
Canal+ will move ahead with a due diligence process and submit a firm buyout offer to MultiChoice's board once the board indicates it is open to talks.
(Source: Image by Freepik)

However, the MultiChoice board has yet to publicly respond to Canal+'s offer.

Canal+ said it would conduct a due diligence process into the affairs of the pay-TV company and submit a firm buyout offer to the MultiChoice board once the board indicates it is open to talks.

"At this stage, there can be no certainty about the progression of the potential offer, nor the terms of any transaction that may occur," the French company said.

South Africa's regulatory framework might make it difficult for the Canal+ and MultiChoice deal to go through. Even though the country's broadcasting rules allow for foreign ownership of broadcasters, voting is restricted to 20% even if economic interests are high.

Be that as it may, if MultiChoice is interested in Canal+ deal, it would have to approach regulatory bodies to plead its case.

Africa's streaming landscape

The Canal+ offer comes on the back of MultiChoice partnering with US-based Comcast's NBCUniversal and UK-based Sky to create a pan-African streaming service in March 2023.

That partnership led to the companies relaunching MultiChoice's streaming video entertainment offering Showmax and committing to investing heavily in the platform.

Showmax is becoming a competitive platform locally, taking on streaming giants like Netflix and Amazon Prime that are expanding their reach across the continent.

Netflix and Amazon Prime have been in Africa since 2016 and have been followed into the market by several other streaming services. However, Amazon Prime last week reportedly said that it was downsizing its operations in Africa and shifting its focus to its European markets.

Disney+ joined the market in mid-2022, launching in six African countries, the majority of which are in North Africa.

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*Top image source: Image by Freepik.

— Matshepo Sehloho, Associate Editor, Connecting Africa

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