As per reports by Reuters, Canal Plus, a subsidiary of Vivendi, has proposed an acquisition of all outstanding shares in South Africa’s MultiChoice Group for approximately USD 1.7 billion. This move aims to fortify Canal Plus’ position in the fiercely competitive global satellite TV market.
Canal Plus, currently the largest stakeholder in MultiChoice with a 31.67% share, revealed its intention to offer ZAR 105 in cash per share, reflecting a 40% premium over MultiChoice’s closing share price on January 31, 2024. Despite a surge in MultiChoice shares during February 1, 2024 trading, they remained below the proposed offer price, closing at ZAR 93, up by 24.83%. Canal Plus clarified that its offer, valued at ZAR 31.7 billion by Reuters estimates, is non-binding and indicative. However, a formal letter of intention is expected to be submitted to MultiChoice’s board following the completion of due diligence.
Following this, MultiChoice acknowledged receiving the letter from the French media company and pledged to inform shareholders of any developments.
Maxime Saada, Chairman and CEO of Canal Plus, underscored the merger’s potential benefits, emphasising the need for MultiChoice to enhance its scale and strengthen local and global expertise for sustained success in Africa. Saada stated, “Our potential offer, if successful, would be an important next step for MultiChoice to realise its full potential.”
Industry analysts have weighed in on the impending acquisition, offering insights into its potential impact on the companies involved and the broader satellite TV market landscape. Analyst Michael Steere from Avior Capital Markets expressed reservations, stating that while the merger offers scale advantages, the suggested price “significantly undervalues the group.”
The satellite television market in Africa experienced significant growth in 2023, with DStv, BeIN, and Canal Plus serving as primary drivers. Factors such as increased availability of satellite TV services in emerging markets, innovative subscription packages, and a growing desire for high-quality entertainment content contributed to the market expansion. However, satellite TV providers face tough competition from streaming services like Netflix and Prime Video. Pay TV services often offer more affordability and a broader content range, while streaming services provide greater convenience on multiple devices. Some satellite TV providers, like DStv operating Showmax, have ventured into streaming services, but whether these efforts can counter the cord-cutting trend remains to be seen. The industry’s dynamic landscape suggests that the competition between traditional satellite TV and streaming services will continue to evolve.
The upcoming acquisition can reshape the power dynamics, influencing factors such as market share and other critical aspects within the African and global satellite TV markets. This development holds the promise of significant transformations, and the unfolding events will ultimately determine the magnitude of its impact on the landscape of satellite television.