Shares in pay television channel operator MultiChoice surged nearly 5% on the JSE yesterday after the Takeover Regulation Panel extended French entertainment group, Canal+’s time frame to make a mandatory offer for the JSE-listed operator of DStv and GOTV by over a month.
Shares in MultiChoice closed 4.21% higher at R109, but are 27.6% lower in the one-year comparative.
Canal+ is seeking to acquire MultiChoice, although the South African entertainment company’s board has rejected the French company’s R105 per share offer. This has prompted Canal+ to raise its shareholding in MultiChoice to about 35%, unlocking provisions for a mandatory offer. Canal+ is required to and will publish a firm intention announcement by no later than April 8.
Meanwhile, “MultiChoice has been instructed to implement measures to reduce offshore shareholding (Canal+) to below 20%,” Martin Rodgers (@SAValueInvestor), an assistant portfolio manager at Integrity Asset Management, said on X yesterday.
Other analysts said shares in MultiChoice had risen by 42.81% since Canal+ first made its offer for the pay television services and streaming operator on February 1.
“MultiChoice notes the announcement made today by Canal+ that the TRP has granted it an extension of 25 business days, until 8 April 2024, to make the required mandatory offer,” the company said yesterday.
It added that its board of directors “will continue to act in the best interests of the company” and its shareholders. The company said last month that “after careful consideration, the board has concluded that the proposed offer price of R105 in cash significantly undervalues the group” and its future prospects.
“MultiChoice has recently conducted a valuation exercise, which has valued MultiChoice significantly above R105 a share,” MultiChoice said.
According to Capital One Partners, the R105 per share cash offer by Canal+ significantly undervalued the group.
It said MultiChoice’s equity stake in MultiChoice’s South African business was worth at least R100 per share. It put a fair value for MultiChoice at between R180 and R210 per share.
BUSINESS REPORT