Canal+ wins delay but will make bid for MultiChoice

Source: MultiChoice

Canal+ has said it will go ahead and make a mandatory offer for the shares in South Africa’s MultiChoice that it does not already own but has secured an extension to the deadline for this from the country’s antitrust watchdog.

Canal+ said the South African regulator, the Takeover Regulation Panel (TRP) had given it until April 8 to make a firm announcement.

“Canal+ respects the decision taken by the Panel, and will comply with it. On this basis, Canal+ confirms that it has applied for and received from the Panel an exemption from adhering to the timing requirements in Regulation 101(3)(b) of the Companies Regulations, 2011 (the ‘Regulations’), which requires that a firm intention announcement be made immediately when a mandatory offer is required to be made in terms of Section 122(1) read with Section 123 of the Companies Act No. 71 of 2008,” the company said.

The French pay TV operator confirmed it would publish a firm intention announcement no later than April 8.

MultiChoice noted the announcement and said that its board would “continue to act in the best interests of the Company and its shareholders”.

TRP ruling

The TRP ruled last week that Canal+ would have to make a mandatory offer, having crossed the 35% ownership threshold that triggers this.

The ruling came afrter the French pay TV operator upped its equity stake in MultiChoice to 35.01%.

Canal+ had argued it should not be required to make a mandatory offer as MultiChoice’s own rules of incorporation held that non-South African companies should be restricted to holding 20% of the company’s voting rights.

However, the TRP rejected this argument on the basis that he relevant section of MultiChoice’s articles of incorporation “applies if and only if either of two threshold-related circumstances arises and then only in order to ensure compliance with a defined foreign control restriction”. That defined restriction means “the ability of a foreigner to exercise control over and have an interest in the holder of a commercial broadcasting service licence above a 20% threshold” and does not apply to votes cast on “other (non-licensee) matters”.

Canal+ has already made an offer to take over MultiChoice that was then rejected by the operator’s board on the grounds that it undervalued the company.