4th Feb 2025 07:39
(Alliance News) - MultiChoice Group and Groupe Canal+ SA reported on Tuesday that they have reached an agreement on a new structure to comply with foreign ownership of broadcasting assets and empowerment rules in South Africa.
Canal+ early in June last year improved its offer for MultiChoice Group to ZAR125 per share, a 67% premium to MultiChoice Group's closing price of ZAR75 before Canal+ first approached MultiChoice Group investors on February 1 last year. The French group formally made the offer early in April.
Canal+'s mandatory offer to MultiChoice Group shareholders opened early in June last year and closes on April 25 this year.
In a joint statement on Tuesday, MultiChoice Group and Canal+ said they had concluded their discussions over the structure of MultiChoice Group after the takeover.
This proposed structure ensures that the MultiChoice acquisition complies with foreign control regulations and maintain MultiChoice Group's broad-based black economic empowerment credentials, the two said.
Canal+ and MultiChoice Group said MultiChoice's empowerment partner, Phuthuma Nathi, has given in-principle support for the new structure.
In terms of the proposed structure, MultiChoice will be restructured so that the current holder of the broadcasting licence in South Africa and the entity which contracts with South African subscribers, MultiChoice (Pty) Ltd or Licence Co, will be carved out of the MultiChoice Group and will become an independent entity.
The remainder of MultiChoice's video entertainment assets will remain part of the MultiChoice Group.
Licence Co will continue to hold the subscription broadcasting licence in South Africa,and it will continue to contract with MultiChoice's South African subscribers.
Licence Co will be majority owned by historically disadvantaged persons, including Phuthuma Nathi, which will ultimately hold a 27% economic interest in Licence Co, two black-owned and managed companies, Identity Partners Itai Consortium and Afrifund Consortium, and a workers' trust.
MultiChoice Group's shareholding in Licence Co will ultimately give it a 49% economic interest and 20% share of voting rights.
MultiChoice Group will also retain its existing 75% direct interest in MultiChoice South Africa, which will exclude Licence Co. Phuthuma Nathi will retain its existing 25% interest in MultiChoice South Africa.
Canal+ and MultiChoice said they are confident that the new structure meets the requirements of all applicable laws, including the restrictions on foreign ownership and control of broadcasting licences.
The two said the Licence Co structure was submitted to the South African Competition Commission as part of the filings made on September 30, 2024 and is being considered by the commission.
The transaction remains subject to regulatory review across numerous jurisdictions, including South Africa.
MultiChoice shares were up 2.0% to ZAR109.13 in Johannesburg on Tuesday morning.
By Artwell Dlamini, Alliance News reporter
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