Multichoice Rejects Canal+’s $2.5 Billion Acquisition Bid, Citing Undervaluation
Pan-African Pay-TV giant, Multichoice, recently declined a $2.5 billion acquisition proposal from French media firm Canal+, citing concerns of undervaluation. The decision was communicated to shareholders through a notice on Monday.
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Multichoice revealed that Canal+ currently holds a 35.01% stake in the company’s total ordinary shares. The failed bid aimed to acquire the remaining issued share capital of Multichoice at a proposed price of R105 per share in cash.
Undervaluation Concerns In its withdrawal of an earlier cautionary message to shareholders, Multichoice justified its rejection by stating that a recent valuation indicated its share unit is worth more than the offered R105.
“After careful consideration, the Board has concluded that the proposed offer price of R105 in cash significantly undervalues the Group and its prospects,” Multichoice explained. The valuation excluded potential synergies from the envisaged transaction, a factor Canal+ had emphasized during discussions.
The Multichoice board emphasized its openness to maximizing shareholder value through any means but clarified that, at the proposed price, further engagement with Canal+ would not be justified.
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Future Prospects and Engagement While the Board remains open to discussions with any party for a fair and appropriately conditioned offer, Multichoice highlighted the need for a fair price and adherence to applicable takeover regulations. The Board emphasized its commitment to acting in the best interests of the company and its shareholders.
Background Canal+’s acquisition proposal, made last Thursday, was valued at 46 billion rand ($2.5 billion) for the remaining shares of MultiChoice Group. The offer, led by French billionaire Vincent Bollore, who already holds a substantial stake in Multichoice, represented a 40% premium to the company’s recent closing price. The proposed acquisition aligns with Vivendi SE’s strategy to merge Canal+’s local operations with MultiChoice, aiming to create a conglomerate with nearly 50 million subscribers
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