Vivendi bids to buy rest of Africa’s MultiChoice for $1.7bn
TLDR
- Vivendi's Canal Plus plans to acquire all shares of MultiChoice Group for $1.7 billion, aiming to strengthen its position in the competitive pay TV market.
- Canal Plus, as the primary stakeholder with a 31.67% holding, proposes a cash payment of 105 rand per share, a 40% premium over MultiChoice's closing share value on the previous Wednesday.
- Despite a rise in MultiChoice shares, it remains below the offered price, suggesting investor doubts about the deal's certainty. MultiChoice shares currently stand at 92 rand, reflecting a 23% increase.
Vivendi's Canal Plus has expressed its intention to acquire all outstanding shares of South Africa's MultiChoice Group, amounting to $1.7 billion. The move aims to enhance the pay TV company's position in the fiercely competitive global market.
As the primary stakeholder in MultiChoice with a 31.67% holding, Canal Plus proposes a cash payment of 105 rand per share, constituting a substantial 40% premium over MultiChoice's closing share value on the preceding Wednesday.
Despite a notable surge in MultiChoice shares during Thursday's trading, the stock still lingers significantly below the offered price, indicating investor skepticism regarding the deal's certainty. Presently, MultiChoice shares stand at 92 rand, reflecting a 23% increase.
Key Takeaways
Canal+ has significantly intensified its focus on Africa over the past decade, experiencing substantial growth from 1 million subscribers in 2016 to an impressive 7.6 million in 2023. In a strategic move to bolster its content offerings, particularly in the thriving Nigerian film industry, Canal+ acquired ROK Studios from IrokoTV in July 2019. This expansion aligns with Vivendi's broader African ambitions. Observers anticipated a potentially hostile takeover strategy from Vivendi, given its history, as seen in its acquisition of minority stakes in gaming companies Gameloft and Ubisoft in 2015. Canal+ has steadily increased its stake in MultiChoice, from 20.1% to around 32.6% since 2020, marking a strategic alignment of interests. Vivendi, in 2022, received $40 million in dividends from MultiChoice, a notable increase from the previous year. However, South African regulations stipulate that Canal+ must make a mandatory takeover offer when its shareholding reaches 35%, making a complete acquisition challenging in the near term. The potential acquisition of MultiChoice remains a pivotal step in Vivendi's broader African strategy, demonstrating the company's commitment to the continent's dynamic media landscape.
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