Multichoice Offered Multibillion Rand Buyout From French Investor

Source image: Multichoice

(The Post News) – Well-known satellite television service DSTV’s parent company, Multichoice Group, has been offered a billion-dollar, all-cash buyout from French media company Vivendi’s Canal+. Canal+ is an existing investor within Multichoice, having acquired 6.5% of the company in ordinary shares in 2022, increasing their total stake to 36.6%.

The French group has placed a R35 billion ($1.9 billion) deal on the table for the rest of the shares that they have not acquired. This joint venture could see both companies reach each other’s audiences, with Canal+ gaining access to Multichoice’s English-speaking territories and Multichoice entering Francophone regions on the continent.

“What we have now is some economies of scale. We’ve got a larger company that has access to more content at better prices, which means that the bouquet of available TV shows, movies, and all sorts of other entertainment programs will expand,” Petri Redelinghuys of Herenya Capital Advisors told SABC News.

The companies believe that as a combination, the groups would better “address key structural challenges and opportunities resulting from the progressive digitalization and globalisation of the media and entertainment sector.”

Maxime Saada, chairman, and CEO of Canal+, said, “Our potential offer, if successful, would be an important next step for MultiChoice to realise its full potential. Combined with Canal+, MultiChoice would have the resources to invest in scale, local African talent and stories, and best-in-class technology, to allow it to grow in Africa and compete with the global streaming media giants.”

Multichoice’s video streaming subsidiary, Showmax, recently partnered with Comcast’s NBCUniversal and Sky to launch a streaming service for Africa. The new merger with Canal+ could further help bolster Showmax’s position globally.

“I think that there is a better possibility now for the likes of Showmax to compete with something like Netflix,” Redelinghuys commented.

The deal comes at a time when Multichoice has recorded massive profit losses over the past year. By September 2023, the company reported a loss of R911 million over six months due to the impact of foreign exchange fluctuations and the effect of load shedding, which led to a decrease in subscribers.

Should the merger happen, Multichoice will lose its JSE listing. However, Canal+ affirms that they will be “respectful and observant of all laws and regulations relating to the South African media sector and companies listed on the JSE,” and that their ultimate goal is to ultimately obtain a listing.