Canal+ increases stake in MultiChoice after buyout bid rejected
TLDR
- Canal Plus proposes to acquire all remaining shares of MultiChoice at 105 rand ($5.52) per share, totaling 31.7 billion rand.
- MultiChoice rejects the offer, considering it significantly undervalued, but welcomes discussions for fair deals.
- Canal Plus increases its stake in MultiChoice to 35.01%, triggering a mandatory offer to all MultiChoice shareholders.
Canal Plus, a major shareholder in MultiChoice, recently proposed to acquire all remaining shares of MultiChoice at 105 rand ($5.52) per share, amounting to a total offer of 31.7 billion rand.
This offer, representing a 40% premium over MultiChoice's closing share price on January 31, was rebuffed by the pay-TV giant, citing it as significantly undervalued. Nonetheless, MultiChoice expressed openness to discussions regarding potential deals at fair prices.
In anticipation of potential resistance, Canal Plus increased its stake in MultiChoice from 31.67% to 35.01% following the announcement of the proposed deal. This slight increase places Canal Plus just above the threshold requiring it to make a mandatory offer to all MultiChoice shareholders.
Key Takeaways
Shares in MultiChoice have surged by over 20% since the offer was proposed, although they remain below the offer price, indicating uncertainty among investors regarding the likelihood of the deal being finalized. Canal Plus has notably intensified its focus on Africa in recent years, with substantial growth in its subscriber base from 1 million in 2016 to 7.6 million in 2023. In a strategic move to enhance its content portfolio, particularly in the Nigerian film industry, Canal Plus acquired ROK Studios from IrokoTV in July 2019. This expansion aligns with Vivendi's broader African aspirations. Observers have speculated about a potential hostile takeover strategy from Vivendi, given its past actions, such as acquiring minority stakes in gaming firms Gameloft and Ubisoft in 2015.
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