Broadcast Media Africa has learnt that the South African pay-TV giant MultiChoice has officially rejected a buyout offer from French media group Canal+.
The DStv operator believes the French media conglomerate’s offer undervalues the company. If you recall, Canal+ announced on Thursday that it submitted a non-binding indicative offer to acquire the shares it does not already own in MultiChoice.
The offer valued MultiChoice at over US$2,4 billion, and Canal+ would have to pay US$1,6 billion cash for the remaining 64.99% of the company it does not own.
In addition to announcing its rejection of Canal+’s offer, MultiChoice revealed on Monday morning that the French media giant increased its shareholding in MultiChoice to 35.01%.
MultiChoice said, “After careful consideration, the board has concluded that the proposed offer price of R105 in cash significantly undervalues the Group and its prospects”.
These included that MultiChoice recently conducted a valuation exercise, which has valued the company significantly above US$5.53 per share.
“MultiChoice’s valuation excludes any potential synergies which may arise from the envisaged transaction,” it stated.
“In this regard, Canal+ has, following the lengthy discussions between the parties, repeatedly conveyed to the public what it sees as the advantages of the combined entity and, therefore, seemingly takes the view that there are significant synergies. These synergies must be factored into any fair offer made by Canal+.”
“The delivery of the Canal+ letter [to the board making the offer] took place after discussions between Canal+ and MultiChoice lasting for well over a year,” MultiChoice said.
“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 that although the board is open to maximising shareholder value, it told Canal+ that its letter does not provide a basis for further engagement at the proposed price.
“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,” MultiChoice said.