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French media giant Canal+ Makes Formal MultiChoice Offer; Values It at $2.9 Billion

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Vivendi SE’s Canal+ plans to use its all-cash offer for MultiChoice Group Ltd. to create a global media company listed in Europe and South Africa that will compete with US entertainment giants. 

“A combined entity will be double listed in Europe and Johannesburg,” Canal+ Chief Executive Officer Maxime Saada said in an interview on Monday. 

Canal+ made a formal bid for MultiChoice that values the African broadcaster at $2.9 billion as it seeks to expand its presence on the youngest and fastest growing continent. The plan to keep a local listing comes as French company must navigate South Africa’s strict limits on foreign media ownership in order to close the deal. 

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South African billionaire Patrice Motsepe could join Canal+ to get a deal done, although discussions are at an early stage, Bloomberg previously reported citing people familiar with the matter. 

“We are confident that we can address the foreign ownership topic, as we are present in 50 countries and there are a number of countries where this type of rule is in place, including in France,” said Saada. 

Vivendi is preparing a plan to split into four publicly traded units, including Canal+, as it seeks better value from its assets after it listed its most valuable business, Universal Music Group NV. 

Saada said the deal was intended to boost scale and purchasing power when going up against competitors to buy US content.

“To extract value from that, and invest in African content and help it reach global audiences, it only makes sense to be part of a global company,” Saada said. 

Read more: Billionaire Motsepe in Talks to Join Vivendi Bid for MultiChoice

MultiChoice’s shares rose 4.2% to 117 rand as of 12:38 p.m. in Johannesburg and are up by about a quarter since Canal+ first announced its plan to purchase the broadcaster in February. The South African company balked at the initial offer of 105 rand per share and Canal+ since raised its bid to 125 rand.

Canal+ began buying shares in MultiChoice in 2020, and surpassed a 35% holding in the company this year, triggering a mandatory takeover offer. Vivendi has developed a strong presence in high-growth regions in Africa and Asia. The French company said previously that it plans to keep MultiChoice listed on the Johannesburg Stock Exchange. 

Formed in South Africa in 1985, MultiChoice expanded across Africa in the early 1990s and was spun off from Naspers Ltd. in 2019. The latest deal could see a combination of Canal+ operations with MultiChoice creating a group with almost 50 million subscribers and the resources to invest more in local content and sports. 

©2024 Bloomberg L.P.

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