South African pay-TV provider Multichoice has rejected a takeover bid by French media conglomerate Canal+, saying the offer “significantly undervalues” the company.
Canal+ had indicated a “non-binding intention” to acquire Multichoice’s remaining shares at 105 rand each, valuing the company at around £4.5 billion. However, Multichoice said its own valuation exercise showed the company was worth “significantly above” that offer.
“After careful consideration, the Board has concluded that the proposed offer price of 105 rand in cash significantly undervalues the Group and its future prospects,” Multichoice said. The company also noted Canal+’s statements about potential synergies from a deal, saying these should be factored into any fair offer.
Multichoice board chairperson Imtiaz Patel emphasised the board’s openness to “maximising shareholder value”, but made clear the current offer was unacceptable. “While the Board is open to all means of maximising shareholder value, it has conveyed to Canal+ that – at this proposed price – the letter does not provide a basis for further engagement,” he said.
The Johannesburg-based company provides satellite television and streaming services across sub-Saharan Africa and boasts around 22 million subscribers. Canal+ is seeking to expand its African footprint, having bought Nigerian production studio ROK film studios last year.
A spokesperson for Canal+ declined to comment on Multichoice’s rejection, but industry analyst Tom Jackson said an increased bid was likely. “Canal+ has made Africa a strategic priority, so I’d expect them to return with an improved offer, possibly in the 120-130 rand range,” he said.
Multichoice emphasised its board would consider any offer made at a “fair price”, while fulfilling its legal duties around any formal binding offer. The company remains one of South Africa’s “blue chip” stocks, despite increased competition from Netflix and others.