Video entertainment group MultiChoice is making every effort to ensure the R30 billion takeover by French-based media giant Canal+ goes through, it says.
Since the deal was announced, the DStv operator has been furnishing telecoms regulator, the Independent Communications Authority of South Africa (ICASA), with details of the progress the merging parties are making, pending the finalisation of the transaction.
This was revealed by Tim Jacobs, MultiChoice Group CFO, in a recent interview with ITWeb, after the company announced its interim financial results for the six months ended 30 September.
During the six-month period, MultiChoice’s subscribers reduced by 800 000, while profit dwindled by close to R7 billion.
MultiChoice and Canal+ recently made a joint merger control filing pertaining to the offer, to the Competition Commission, as required by the Competition Act.
They are also engaging with ICASA and other regulatory authorities across the African continent over the deal.
Earlier this year, the companies issued a combined circular to MultiChoice shareholders regarding the mandatory offer by the French company, to acquire the MultiChoice shares it does not own, for a consideration of R125 per share.
Over the years, Canal+ has been buying MultiChoice’s shares on the open market. As the company increased its stake, it made the move to acquire all the shares in the pay-TV operator.
MultiChoice’s total number of issued shares is 442 512 678; therefore, at 45.2%, Canal+ holds around 200 015 730 shares in MultiChoice as at 16 May 2024.
This means the French broadcaster has to fork out over R30 billion to purchase the shares it does not own in MultiChoice on the open market.
“The board has indicated that we are supportive of the offer of R125 per share. One of the reasons is when we look at the two businesses on a combined basis, we think that R125 is a fair price to shareholders, but we also considered that having a bigger and more sustainable-sized business, scaling up would help the two companies if we combine,” Jacobs said.
“We have been working with Canal+ on our regulatory submissions. We have already submitted to the South Africa Competition Commission and the next phase is to submit to the other jurisdictions in Africa that require competition commissions.
“That’s under way at the moment. Lastly, we are in discussions with our regulator [ICASA] because while we think we do not need to do any submissions with the regulator, we need to make sure the regulator is kept abreast of what exactly we are doing in the business,” he added.
The Canal+ offer comes as MultiChoice is under financial pressure, while also losing subscribers in droves.
The video entertainment firm also finds itself technically insolvent, emanating from non-cash accounting entries at the end of the last financial year.
To exit the situation it finds itself in, the pay-TV operator has set its sights on concluding the multibillion-rand sale of a 60% stake of its insurance business to Sanlam.
It also believes the backing of Canal+ deal will change its fortunes going forward.
A subsidiary of Vivendi, Canal+ has 26.4 million subscribers worldwide, including 17.1 million in Europe, 8.1 million in Africa and 1.2 million in Asia-Pacific. The group invests €3.5 billion in content every year.
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