In a statement to the Johannesburg Stock Exchange, MultiChoice expressed its careful consideration and concluded that the cash offer of R105 significantly undervalues the company and its future prospects. This rejection, however, may not deter Canal+, which has been steadily increasing its stake in MultiChoice since 2020. Vivendi, the parent company of Canal+, is experienced in navigating complex takeover scenarios, having orchestrated at least two similar acquisitions in the past.
Canal+ continues to accumulate MultiChoice shares
Canal+ continues to accumulate MultiChoice shares, aiming to reach the 35% threshold, as revealed in a regulatory filing observed by TechCabal. According to South African regulations, surpassing the 35% ownership threshold would mandate Canal+ to make a mandatory offer to all MultiChoice shareholders.
In response to these developments, MultiChoice has sought a regulatory ruling regarding the obligation for a mandatory offer to all ordinary shareholders. Additional announcements will be made as the situation unfolds. Meanwhile, MultiChoice’s share price has witnessed a substantial decline of almost 50% in the last six months.
The decision to raise prices
It recently announced plans for further price increases across all its African subsidiaries in 2024. In an interview with Daily Investor, MultiChoice CFO Tim Jacobs referred to the upcoming hike as “inflationary,” citing the company’s financial challenges in maintaining a healthy balance sheet. Jacobs emphasized that these inflation-level price adjustments are essential for sustainable growth and the continuous delivery of high-quality content.