Multichoice has rejected an acquisition offer from Groupe Canal+, while disclosing that the French company has been buying up shares in the group.

In the first of two separate SENS announcements this morning, Multichoice points out that Groupe Canal+ has acquired an addition interest in ordinary Multichoice shares, bringing its shareholding to 35,01% of the total ordinary shares in issue.

MultiChoice has filed the required notice with the Takeover Regulation Panel and the Companies and Intellectual Property Commission.

The company has also requested the TRP to make a ruling as to whether a mandatory offer must be made to all holders of ordinary shares in terms of regulations.

A second SENS notice discloses that Multichoice has rejected an offer from Groupe Canal+ to acquire the remainder of the entire issued share capital of MultiChoice for a proposed price of R105 per share in cash.

The offer, announced on Thursday last week (1 February 2024) followed more than a year’s worth of discussions between Canal+ and MultiChoice.

“After careful consideration, the board has concluded that the proposed offer price of R105 in cash significantly undervalues the group and its future prospects,” according to the statement from Multichoice.

It adds that the decision was informed by a number of considerations, including:

* MultiChoice has recently conducted a valuation exercise, which has valued it significantly above R105 a share.

* MultiChoice’s valuation excludes any potential synergies which may arise from the envisaged transaction. In this regard Canal+ has, following the lengthy discussions between the parties, repeatedly conveyed to the public what it sees as the advantages of the combined entity and therefore seemingly takes the view that there are significant synergies. These synergies need to be factored into any fair offer made by Canal+.

“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.”

The statement concludes that the board is open to engage with any party in respect of any offer which is for a fair price and is
subject to appropriate conditions.