THE Takeover Regulation Panel (TRP) has ruled that Vivendi’s Canal Plus (Canal+) acquisition of shares to a 35.01% stake in MultiChoice has triggered an immediate mandatory offer by the French media group.
Writing on “X” , TechCabal (@TechCabal), a pan-African publication on tech developments on the continent, said that with MultiChoice's board having initially rejected the Canal+ offer, the TRP’s ruling meant Canal+ could make a tender offer directly to shareholders.
On February 5, MultiChoice was notified by the French media company that it had acquired an additional interest in MultiChoice, so that it controlled 35.01% of the local pay-TV’s shares, from 31.67% previously.
Canal+, the biggest shareholder in MultiChoice, had offered to buy the rest of MultiChoice shares that it did not already own at an offer price of R105 per share in cash, representing a 40% premium to MultiChoice's closing price a trading day ahead of the announcement.
The share price has risen strongly from the R75 that it had closed at on January 31, and yesterday afternoon the price inched up 0.14% to R104.50.
A mandatory offer to all other shareholders is typically required when a company acquires a more than 35% stake in the shares of another listed company..
MultiChoice had requested the TRP for a ruling on whether or not a mandatory offer by Canal+ was required.
Canal+ submitted to the TRP that it was not obliged to make such an offer, because of an article in MultiChoice’s memorandum of incorporation (MOI) that limits the ability of a foreign shareholder, at any meeting of shareholders, to exercise voting rights above a 20% threshold.
Canal+ said it had not acquired voting rights attaching to shares in MultiChoice above the prescribed threshold of 35% and consequently, there was no obligation to make a mandatory offer.
The TRP had contended that the publication of the announcement without the approval of the TRP was unlawful, and it issued a compliance notice against MultiChoice.
This notice was currently the subject matter of an appeal and a review instituted by MultiChoice to The Takeover Special Committee.
In its ruling on Canal+’s mandatory offer, the TRP said the definition of the 20% restriction in the MOI confined its operation to the ability of a foreigner to exercise control over and have an interest in the holder of a commercial broadcasting service licence above a 20% threshold.
It did not apply when votes were to be cast on other (non-licensee) matters, the TRP said.
The 20% foreign shareholder limit in MultiChoice’s MOI is to ensure compliance with certain statutory requirements applicable to South Africa.
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