Canal+ must make Multichoice a takeover bid


South Africa’s Takeover Regulation Panel has ruled that the French broadcasting giant Canal+ is obliged to immediately make an offer to buy out other MultiChoice shareholders.

Canal+ is MultiChoice’s largest shareholder and has recently passed the 35% share mark, which makes an offer pursuant to art. 123 of the Companies Act to make it mandatory.

“(T)he panel decides that Canal+ must immediately take steps to comply with the requirements of art. 123(3) of the law and regulations by making an offer to the remaining minority shareholders of the MultiChoice group,” reads the ruling.

RNews previously reported that Canal+ offered R105 per share to take over the company. MultiChoice rejected this offer, saying it “significantly undervalues ​​the group’s future prospects”.

At that stage Canal+ owned 31.67% of MultiChoice’s shares. However, it rose to 35.01% soon after.

However, the South African Electronic Communications Act complicates matters as this legislation places restrictions on the foreign ownership of local broadcasting licences.

This means that Canal+ can increase its shares in MultiChoice to any level, while its voting rights are limited to a maximum of 20%.

In light of this, Canal+ argues that the company is under no obligation to make an offer because “MultiChoice’s Memorandum of Incorporation (MOI) limits the ability of a foreign shareholder”.

However, the panel still ordered that Canal+ should make an offer, and indicated in its decision that Canal+’s argument was not valid as the right to vote only applies to matters related to the broadcasting licenses and for all other matters Canal+ would have full voting rights .

The foreign control restrictions apply to the companies controlled by MultiChoice that hold commercial broadcasting licences, but the MultiChoice group also has other significant businesses across the African continent with local broadcasting licenses held by M-Net and MultiChoice in South Africa.

Canal+ has a period of five days after the decision has been made to approach the panel.