Pan-African Pay-tv operator, Multichoice, said it has turned down the $2.5 billion acquisition offer by French media company, Canal+.
The company disclosed this in a notice to its shareholders on Monday. Multichoice said it turned down the acquisition offer because the R105 per share being proposed by Canal+ undervalues the company.
According to Multichoice, Canal+ currently holds 35.01% of the Company’s total ordinary shares in issue. The botched bid was to acquire the remainder of the entire issued share capital of MultiChoice for a proposed price of R105 per share in cash.
Explaining the reasons for turning down the offer in a Monday notice withdrawing its earlier cautionary message to its shareholders, Multichoice said it recently conducted a valuation which showed that its unit of share is worth more than R105.
“After careful consideration, the Board has concluded that the proposed offer price of R105 in cash significantly undervalues the Group and its prospects. The Board has reached this conclusion taking into account all relevant considerations, including the following:
“MultiChoice has recently conducted a valuation exercise, which has valued MultiChoice significantly above R105 a share.
“MultiChoice’s valuation excludes any potential synergies which may arise from the envisaged transaction.”
“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+” Multichoice added.
The company’s board noted that while it is open to all means of maximizing shareholder value, it has conveyed to Canal+ that – at this proposed price – the letter does not provide a basis for further engagement.
“Caution is accordingly no longer required to be exercised by shareholders when dealing in their securities. In keeping with its duty to act in the best interests of the Company, the Board remains open to engage with any party in respect of any offer which is for a fair price and is subject to appropriate conditions. Moreover, it goes without saying that the Board will continue to act in accordance with its duties in the applicable provisions of the Takeover Regulations regarding any formal and binding offer,” the company added.