Multichoice board of directors has halted a buyout deal from Canal plus stating that the value of the South African company surpasses the initial offer.
- Canal Plus, a subsidiary of Vivendi, revealed earlier this month that it owned 31.67% of Multichoice shares.
- The French Giant media company offered $5.55 per share in a bid to acquire the company.
- The Multichoice board has revealed that talks about acquisitionwill not continue because Vivendi’s $2.5 billion offer is an undervaluation.
Canal Plus has built its stake since 2020 to become the largest shareholder in the South African company. It is also one of the largest satellite television services in Francophone Africa. By taking over Multichoice, the French company would break into new markets like Nigeria and Kenya.
Multichoice has witnessed dwindling profits over the years as many customers shift from Satellite television services like DSTV and GO-TV. Their broadcast model has faced stiff competition from streaming services like Netflix which offer maximized flexibility.
Earlier this year, Multichoice revamped its streaming platform Showmaxx after partnering with Comcast. Industry analysts have speculated that this might have prompted Canal Plus to hasten its acquisition intent.
It is unclear how the deal would have been finalized even if the board approved it. This is because South African laws prevent foreign companies from holding more than 20% of the voting rights of a South African broadcaster. Sector pundits also viewed the Competition Commission as another barrier that would have blocked the takeover.
