According to media reports, Canal+ continues to increase its stake in MultiChoice by buying shares on the open market.
MultiChoice first told shareholders that Canal+ had acquired 6.5 per cent of the company in October 2020. Since then, there have been regular updates on Canal+ raising its stake.
In July 2022, MultiChoice informed shareholders that Canal+ had increased its shareholding to 20.12 per cent.
According to MultiChoice CEO Calvo Mawela, they continue to have monthly interactions with Vivendi and that the French media company likes MultiChoice, its management, and its prospects.
Mawela indicated that MultiChoice’s relationship with Canal+ is growing, and they are working together on many products, including content co-productions and sub-licensing content.
Canal+ growing stake sparked speculation that Vivendi, through Canal+, could be looking to strike a deal with MultiChoice.
Vivendi tried to acquire MultiChoice Africa in 2017, but Naspers, the parent company of MultiChoice at the time, reportedly rejected the US$1 billion offer.
MultiChoice would not comment on a new deal, only saying it kept an open mind about its relationship with Canal+ and Vivendi.
According to industry analysis, MultiChoice Africa and Canal+ are a natural fit with many synergies which could unlock value for both companies.
Richard Cheesman, a senior investment analyst at Protea Capital Management, indicated that they see the opportunity, means, and motivation for Canal+ to buy a more significant stake in MultiChoice.
Cheeseman noted that other benefits of a tie-up include lower content costs, better satellite leases, and the expedited use of MultiChoice Africa’s tax losses.
According to Cheeseman, merging Canal+ and MultiChoice Africa’s subscriber bases will give a new entity better negotiation rights on satellite costs, rights on sports and movie rights, and channel distribution agreements.
If Vivendi wants to merge Canal+ and MultiChoice Africa, it is unclear whether there will be a share swop or a different type of agreement with MultiChoice.