A New Era for MultiChoice: Major Restructuring in the Works

A New Era for MultiChoice: Major Restructuring in the Works

MultiChoice is set for a major transformation if French media giant Canal+’s R55 billion buyout offer is approved.

Canal+ has steadily increased its stake in MultiChoice over the years, surpassing the 35% threshold in early 2024, which triggered a mandatory buyout offer. After negotiations, Canal+ proposed R125 per share, valuing the company at approximately R55 billion. Given its existing 45% stake, the acquisition would require an estimated R30 billion in cash.

However, the deal faces significant regulatory challenges, particularly regarding foreign ownership restrictions under the Electronic Communications Act (ECA). The ECA imposes strict limitations on foreign control of commercial broadcasting services, including a cap on foreign voting rights and board representation.

To navigate these restrictions, MultiChoice has proposed a post-acquisition restructuring plan, detailed in a SENS announcement on 4 February. Under this new structure:

The division holding South Africa’s broadcasting license and subscriber contracts will be spun off into an independent entity called LicenceCo.
LicenceCo will be majority-owned by historically disadvantaged persons (HDPs), including Phuthuma Nathi (27% economic interest), Black-owned firms, and a Workers’ Trust (ESOP).
MultiChoice Group will retain a 49% economic stake in LicenceCo but only 20% voting rights to comply with ECA regulations.
MultiChoice will continue to hold 75% of MultiChoice South Africa, while Phuthuma Nathi retains its 25% stake.
The proposed structure is currently under review by the Competition Commission and the Independent Communications Authority of South Africa (ICASA). The Phuthuma Nathi Board has expressed in-principle support, though final approval is still pending.

Despite the changes, MultiChoice has assured shareholders and viewers that service disruptions will be minimal. Canal+ has also pledged increased investment in content and technology.

Canal+ CEO Maxime Saada emphasized that the deal would strengthen MultiChoice’s position in the global media landscape while maintaining compliance with South African laws.

“This transaction presents an opportunity to create a unique global media company with a strong presence across Africa,” Saada stated.

MultiChoice CEO Calvo Mawela echoed this optimism, highlighting the potential benefits of increased scale and an enhanced subscriber offering.

While the buyout is not yet final, one thing is certain: MultiChoice, as it has been known, is on the brink of a new chapter.