MultiChoice, the South African TV giant, announced on Monday that it would terminate negotiations with Canal+ of France after declining a buyout proposal that it deemed to significantly undervalue the company.
The proposed buyout offer from Canal+, which is already the largest shareholder with a 30% stake, was to purchase the remaining shares for 105 rand ($5.5) each.
Last week, the French company made an offer to acquire MultiChoice for approximately R31.7bn ($1.7bn).
In a statement released by Canal+ in Paris, the company revealed that it had submitted a non-binding indicative offer to MultiChoice’s board to acquire all outstanding ordinary shares, contingent upon obtaining the required regulatory approvals.
However, MultiChoice stated on Monday that, based on a recent valuation exercise, the company’s worth was significantly higher.
“After careful consideration, the board has concluded that the proposed offer price of R105 in cash significantly undervalues the Group and its future prospects,” the company remarked.
“Therefore… it has conveyed to Canal+ that – at this proposed price – the letter does not provide a basis for further engagement.”
The board expressed willingness to engage on any offer at a fair price.
Canal+, a subsidiary of the Vivendi group led by billionaire Vincent Bollore, operates in 25 African countries through 16 subsidiaries and has eight million subscribers. The company holds a stake in MultiChoice, which is Africa’s largest pay-TV enterprise, allowing it to establish a presence in English-speaking and Portuguese-speaking nations across the continent where MultiChoice has over 23 million subscribers in more than 50 countries.
AFP