MultiChoice, a Pan-African Pay-tv operator, has rejected a $2.5 billion acquisition offer from French media company, Canal+.
The company said in a notice Monday that the proposed ($ 5.53) R105 per share by Canal+ significantly undervalues the company.
Canal+, which currently holds 35.01% of MultiChoice’s total ordinary shares, had intended to acquire the remainder of the entire issued share capital of MultiChoice at a proposed price of R105 per share in cash.
MultiChoice Claims Undervaluation
MultiChoice says it conducted a valuation which showed that its unit of share is worth more than $ 5.53.
“After careful consideration, the Board has concluded that the proposed offer price of R105 in cash significantly undervalues the Group and its prospects,” the company stated in a cautionary statement to shareholders.
The Board reached this conclusion taking into account all relevant considerations, including the fact that MultiChoice’s valuation excludes any potential synergies which may arise from the envisaged transaction.
Canal+ has, following 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.
MultiChoice added that these synergies need to be factored into any fair offer made by Canal+.
While the company’s board noted that it 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.
“Caution is accordingly no longer required to be exercised by shareholders when dealing in their securities. 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,” the company added.
On February 1, Vivendi SE’s Canal+ proposed to acquire the remaining shares of MultiChoice Group, the South African pay-TV company, in a deal valued at $2.5 billion.
The Paris-based Canal+, led by French billionaire Vincent Bollore, who already holds a significant stake in MultiChoice, offered 105 rand per share in cash, representing a 40% premium to the company’s recent closing price.
The acquisition plan aligned with Vivendi’s strategy to merge Canal+’s local operations with MultiChoice, creating a conglomerate with close to 50 million subscribers.
