MultiChoice and Canal+ Enter into a Cooperation Agreement for a Buyout Deal

On April 8, 2024, in a move that might completely change the landscape of pay-TV in South Africa, MultiChoice Group, the Johannesburg Stock Exchange (JSE)-listed satellite television leader, announced an alliance with French media giant Canal+.

This cooperation opens up the possibility of Canal+ buying out MultiChoice in the future.

Buyout on the Horizon

The Cooperation agreement marks a major turning point in the ongoing saga between these two companies.

In February 2024, Canal+ made known its interest in acquiring all remaining shares of MultiChoice that it didn’t own. The initial offer led to talks between the management of both companies.

The newly signed agreement provides a framework for a “mandatory offer” by Canal+ to acquire all the outstanding shares of MultiChoice from its shareholders.

Terms of the Deal

The terms of the offer have not been fully laid out yet, but certain key elements have been disclosed.

Canal+ is offering MultiChoice shareholders ZAR 125 per share in cash and this represents a significant increase from the lowest price allowed by South African takeover regulations.

This improved deal also shows that Canal+ is optimistic about the prospects of a merged entity.

MultiChoice’s Cooperation

Cooperation agreement indicates a shift in MultiChoice’s stance.

Initially, the company was hesitant to accept the first offer from Canal+.

However, after comprehensive negotiations, MultiChoice has consented to collaborating with Canal+ on all matters that will guarantee a smooth and successful completion of the offer process.

This includes providing Canal+ with exclusivity undertakings, which are standard for M&A deals and essentially preclude MultiChoice from soliciting or entertaining offers from other potential buyers.

Related: Canal+ Makes an Offer to Buy Multichoice for $2.9 Billion

Impact on South African Viewers

The possibility of MultiChoice being acquired by Canal+ has resulted in talks about the future of pay-TV in South Africa.

MultiChoice, with its predominant DStv platform, holds an overwhelming share of the pay-TV market in the country.

The amalgamation with Canal+ may open up a wider content library for South African viewers and possibly even more competitive pricing.

However, there are some industry analysts who express fears about possible job losses and a decrease in locally produced content.

Regulatory Hurdles

Canal+ has to get through regulatory hoops before it can close the deal.

South Africa’s Takeover Regulation Panel (TRP) will be very instrumental in vetting the offer and ensuring that it complies with competition laws.

The Road Ahead

The cooperation agreement shows a significant development in the direction of potential consolidation in the South African pay-TV market.

The next few weeks and months will be very important while Canal+ puts the final touches on the details of its mandatory offer and manages the regulatory process.

The ultimate fate of this deal will be determined by MultiChoice shareholders when they vote on whether to accept Canal+’s offer or not.

This multi-million dollar deal has the capacity to change the entire landscape of South African media, and everyone’s attention is fixed on how this saga pans out in the coming months.

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