MultiChoice rejects Canal Plus’ $1.67 billion offer, citing undervaluation

MultiChoice rejects Canal Plus' $1.67 billion offer, citing undervaluation
The logo of French TV channel 'Canal Plus. source: Reuters

Group, 's largest pay-TV company, has officially announced the termination of talks with Vivendi's Canal Plus, asserting that the proposed offer significantly undervalues the company.

Canal Plus, a prominent shareholder in MultiChoice, had presented an offer of 105 rand ($5.55) per share for the shares it does not currently own. This offer, valued at 31.7 billion rand, represented a 40% premium to MultiChoice's closing share price of 75 rand on January 31.

However, MultiChoice, in a statement, revealed that a recent valuation exercise appraised the group at a value considerably higher than the offered price, excluding potential synergies from the proposed deal. The company emphasized that Canal Plus' conveyed synergies “need to be factored into any fair offer made” by the French company.

“While the board is open to all means of maximizing shareholder value, it has conveyed to Canal+ that at this proposed price, the letter does not provide a basis for further engagement,” MultiChoice stated.

The board clarified that it remains open to engaging with any party presenting an offer at a fair price.

Canal Plus had described its offer as non-binding and indicative, with plans to submit a formal letter of intention to MultiChoice's board after completing due diligence. Despite MultiChoice's rejection, Canal Plus increased its stake in the company from 31.67% to 35.01% following the announcement of the proposed deal.

In response, MultiChoice has sought a ruling from the Takeover Regulation Panel under the Companies Act to determine whether a mandatory offer must be extended to all ordinary shareholders.

The development reflects ongoing dynamics in the media and entertainment sector, highlighting the complexities of negotiations and valuations within the industry.

As the situation evolves, stakeholders in the sector await further developments and potential shifts in the negotiation landscape.

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