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By Chinelo Obogo
Multichoice has recommended that shareholders accept a $2.9 billion buyout offer from French media company Canal+. If completed, Canal+, owned by the Bolloré family’s Vivendi, will control DSTV, Showmax, GoTV, and several sports broadcast licenses in Africa.
According to Financial Times, an independent board at the Johannesburg-listed group said on Tuesday that “the terms and conditions of the offer are fair and reasonable to MultiChoice shareholders”, citing a valuation report from Standard Bank, which gave the company a likely value of $6.4 per share.
Canal+ chief executive Maxime Saada, said: “I would rather it happens faster, not because I’m impatient, but because the competition doesn’t wait.” He described the deal as part of a plan to “create a global entertainment business with Africa at its heart”.
The French company has 26.4mn subscribers globally and says it wants to become a “credible alternative” to media companies including Netflix, Disney, Apple TV and YouTube.
MultiChoice reaches 22mn households in Africa through services that include satellite broadcaster DStv and streaming service Showmax, in which Comcast’s NBCUniversal has a 30 per cent stake.
Elias Masilela, chair of MultiChoice, described the deal as an endorsement of its growth strategy in Africa. “It is gratifying to note that foreign investors share our view that South Africa and Africa remain attractive growth markets,” he said.
Saada said that he had spoken with South African officials and that Canal+ has already made “strong commitments” to the country, including providing commitments on job creation and investment in South Africa’s creative industries. “This is the way we want to do business. We don’t see this as a hurdle,” he said.
These commitments are important since the deal will need to be approved by the country’s antitrust regulator, the Competition Commission, which will also factor in the “public interest” of such a deal.
A larger hurdle is South Africa’s Electronic Communications Act, which prohibits foreign entities from holding more than 20 per cent of the voting rights of a local broadcasting rights holder.
In the circular, the companies said they were “assessing and finalising suitable structuring options and potential transactions” to ensure compliance with that rule, while ensuring MultiChoice could still retain a minimum level of black shareholding, under South Africa’s empowerment rules. Canal+ said it was “fully committed” to ensuring MultiChoice retained its black ownership credentials.
