Rédaction Africa Links 24 with Ray Mahlaka
Published on 2024-04-16 18:36:19
There has been a significant development in the business world, particularly in the media and entertainment sector, as Canal+ has made an offer to buy MultiChoice, Africa’s pay TV giant, for R35 billion. This move has stirred a mix of reactions from MultiChoice shareholders, with some expressing relief at the opportunity to potentially exit their investment, which has been underperforming.
Initially, the board of MultiChoice rejected Canal+’s offer to buy the remaining shares at R105 each, deeming it undervalued. However, after Canal+ raised the offer to R125 per share, the board began to reconsider its position. Canal+ already owns 40.01% of MultiChoice shares and aims to take full control through this acquisition.
The success of the deal now hinges on whether the remaining MultiChoice shareholders will support Canal+’s offer, requiring approval from 90% of shareholders for the transaction to proceed. Shareholders have varied opinions on the deal, with some seeing it as a way to salvage their investment from a declining company that has faced challenges such as falling subscriber numbers, regulatory issues, and currency depreciation.
Industry players and analysts have also weighed in on the potential acquisition. Some, like Anthony Sedgwick of Abax Investments, welcomed the offer as a way to exit their positions in MultiChoice. On the other hand, Asief Mohamed of Aeon Investment Management raised concerns about governance and the overall investment outlook for MultiChoice.
Canal+ has put forward the argument that combining its operations with MultiChoice would create a stronger entity to withstand the competitive landscape of the media industry. However, not all investors share the pessimism towards MultiChoice, with some seeing the recent challenges as opportunities for investment.
Argon Asset Management, for example, seized the opportunity to increase its stake in MultiChoice during a period of decline, citing the company’s potential growth prospects and strategic investments in content and platforms like Showmax. The firm believes that Canal+’s offer undervalues MultiChoice and its future potential.
The deal between MultiChoice and Canal+ is still subject to regulatory approval and is expected to take around two years to be finalized. Large shareholders such as the Public Investment Corporation, M&G Investments, Allan Gray, and Sanlam Investments have yet to publicly comment on their stance regarding the acquisition.
In conclusion, the potential acquisition of MultiChoice by Canal+ represents a significant development in the media industry, with shareholders and industry players closely monitoring the outcome of the deal and its implications for the future of both companies. The decision on whether to accept Canal+’s offer will have far-reaching consequences for the stakeholders involved in this transaction.
Read the original article on Daily Maverick
