The MultiChoice Group has rebuffed an acquisition offer from Canal Plus, asserting that the bid significantly undervalues the company.
The rejection comes after Canal Plus proposed to purchase MultiChoice shares it does not already own at 105 rand ($5.55) per share, which the board deemed inadequate.
Canal Plus, a major shareholder in MultiChoice, had extended the offer in hopes of expanding its stake in the company.
The proposed bid, valued at 31.7 billion rand, represented a 40% premium to MultiChoice’s closing share price on January 31.
However, MultiChoice, Africa’s largest pay-TV company, conducted a comprehensive evaluation that placed its worth well above the offered price, even before considering potential synergies arising from the deal.
The board explained that Canal Plus’ conveyed synergies must be taken into account in any fair offer.
While expressing openness to avenues that maximize shareholder value, MultiChoice conveyed to Canal Plus that the proposed price did not warrant further engagement.
The company underscored its commitment to engaging with any party offering a fair price.
Canal Plus had indicated its offer was non-binding and indicative, subject to completing due diligence.
Following the offer’s announcement, Canal Plus raised its stake in MultiChoice from 31.67% to 35.01%, prompting MultiChoice to seek a ruling from the Takeover Regulation Panel on whether a mandatory offer must be extended to all ordinary shareholders, per the Companies Act.
The rejection underscores MultiChoice’s confidence in its value and strategic direction, signaling its commitment to safeguarding shareholder interests amidst acquisition overtures.
