Last week, it was revealed that French pay-TV giant Canal+ had its intentions to entirely purchase South Africa's MultiChoice, in its quest to go from its top shareholder to the leading televised entertainment provider in Africa.
Now, however, the takeover bid has come onto a roadblock. MultiChoice declined the acquisition offer, with the belief that Canal+, a dominant force in Francophone Africa owned and controlled by Vivendi, has undervalued the firm.
Canal+'s non-binding offer sought to takeover MultiChoice for $1.7 billion, at ZAR 105 (around $5) per share.
“After careful consideration, the Board has concluded that the proposed offer price of ZAR 105 in cash significantly undervalues the Group and its prospects. The Board has reached this conclusion taking into account all relevant considerations.” the business' statement to the Johannesburg Stock Exchange reads.
Apparently, a valuation exercise conducted—most likely after the bid—shows that the service is worth much more than ZAR 105 per share. “MultiChoice’s valuation excludes any potential synergies which may arise from the envisaged transaction,” the group says.
“In this regard, Canal+ has, following the lengthy discussions between the parties, repeatedly conveyed to the public what it sees as the advantages of the combined entity and, therefore, seemingly takes the view that there are significant synergies. These synergies need to be factored into any fair offer made by Canal+.”
Added to its refusal of the offer from the pay-TV giant, MultiChoice revealed Canal+ has upped its shareholding from 31.67% to 35.01%.
Nevertheless, MultiChoice does not seem entirely closed to being acquired, as it says it is willing to consider offers from just about any interested party for a fair price and under appropriate conditions.