MultiChoice Group’s board has rejected a bid by France’s Groupe Canal+ to buy out the DStv, GOtv and Showmax parent, saying the US$1.7 billion offer price undervalues the business.
Last Thursday, it emerged that Canal+ had written to MultiChoice’s board in which it made a non-binding offer to acquire the South African-headquartered pay-television group’s entire issued share capital in an all-cash deal that would value the business at some US$2.53 billion.
The delivery of the Canal+ letter took place after discussions between Canal+ and MultiChoice lasting for well over a year. Following the delivery of that letter, Canal+ and its representatives have extensively discussed their proposal in public and with members of the press,” MultiChoice said in a statement to shareholders on Monday, issued via the JSE.
“After careful consideration, the board has concluded that the proposed offer price of US$5.54 in cash significantly undervalues the group and its future prospects.”
It said MultiChoice recently conducted a valuation exercise that valued the group at “significantly above US$5.54/share”.
While the board is open to all means of maximising shareholder value, it has conveyed to Canal+ that – at this proposed price – the letter does not provide a basis for further engagement,” it said.
“In keeping with its duty to act in the best interests of the company, the board remains open to engage with any party in respect of any offer which is for a fair price and is subject to appropriate conditions.
Moreover, it goes without saying that the board will continue to act in accordance with its duties in the applicable provisions of the Takeover Regulations regarding any formal and binding offer.”
Canal+, meanwhile, shows no sign of backing down. MultiChoice also announced to shareholders on Monday, again via the JSE, that Canal+ has bought 35.01% of its ordinary shares in issue, up from 31.7% last July — the last time a figure was disclosed.
MultiChoice has filed the required notice with the Takeover Regulation Panel… MultiChoice has also requested the TRP to make a ruling as to whether a mandatory offer must be made to all holders of ordinary shares in the company… A further announcement will be released if there are further developments.”
