South Africa’s leading broadcasting company, MultiChoice, has rejected a takeover bid from the French corporation Canal+ which had offered to purchase MultiChoice shares at a price that the company deemed undervalued. The bid, which represented a 40% premium to MultiChoice’s share price at the time, did not meet the company’s appraisal standards, Reuters reported. MultiChoice, with a market capitalisation of $2.15 billion, informed shareholders that it would not accept the offer of R105 per share. US$1 = ZAR18.9169.
In a statement to the Johannesburg Stock Exchange, MultiChoice explained that after careful consideration, the board concluded that the proposed offer significantly undervalued the company and its future prospects. Read the statement in part:
After careful consideration, the Board has concluded that the proposed offer price of R105 in cash significantly undervalues the Group and its future prospects.
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.
Canal+ has been steadily increasing its stake in MultiChoice since 2020, indicating its determination to acquire the company. According to South African regulations, if Canal+ acquires more than 35% of MultiChoice shares, it would be required to make a mandatory offer to all shareholders. Canal+ has been purchasing additional shares, approaching the 35% limit. MultiChoice has requested that the regulator rule on whether a mandatory offer must be made to all ordinary shareholders.
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