MultiChoice Announces South African Reorganisation Ahead of Canal+ Takeover
This follows the recent Competition Tribunal approval of the mandatory offer by Canal+, which could see the French broadcaster acquiring up to 100% of MultiChoice’s ordinary shares, excluding treasury shares, at ZAR125 per share in cash.
MultiChoice has announced a significant reorganisation of its South African operations in preparation for the potential takeover by French media group Canal+ , as part of efforts to remain compliant with South African broadcasting laws.
This follows the recent Competition Tribunal approval of the mandatory offer by Canal+, which could see the French broadcaster acquiring up to 100% of MultiChoice’s ordinary shares, excluding treasury shares, at ZAR125 per share in cash. The approval, however, came with conditions—chief among them being the implementation of a structural reorganisation to align with local foreign ownership restrictions in broadcasting.
At the heart of this restructuring is MultiChoice South Africa Holdings (MCSAH), through which several regulated entities operate. One such entity is MultiChoice Proprietary Limited (LicenceCo), the holder of commercial broadcasting licences issued under South Africa’s Electronic Communications Act (ECA). The ECA prohibits foreign entities from exercising control over licensees like LicenceCo, necessitating the reshuffle.
To meet these legal thresholds, MultiChoice will dispose of 26% of its economic interest in LicenceCo and 15% in signal distributor Orbicom. The new structure introduces a broad-based group of South African shareholders—Phuthuma Nathi Investments (PN), 13th Avenue Investments, Identity Partners Itai Consortium (IPIC), and the MultiChoice Workers Trust—who will collectively hold the majority of voting rights in LicenceCo. These stakeholders, who are tied to respected South African business leaders and empowerment initiatives, will subscribe to various classes of shares, including vendor-funded equity designed to transition into full ownership over time.
This local ownership model preserves regulatory compliance while embedding empowerment and employee participation. Notably, PN will increase its effective interest in Orbicom from 25% to 40%, and a special R1.375 billion extraordinary dividend will be issued by MCSAH to its shareholders, of which PN will receive R343.75 million.
The Reorganisation, which is considered a Category 2 transaction under JSE rules, does not require shareholder approval but remains subject to multiple suspensive conditions. These include obtaining all remaining regulatory consents, finalising funding arrangements for the new investors, and completing required legal formalities, including compliance certification from the Takeover Regulation Panel.
This move by MultiChoice is seen as both a regulatory safeguard and a proactive localisation strategy, ensuring that its broadcasting and signal licences remain firmly within South African control, even as the company itself prepares for potential foreign ownership at the group level.
The final implementation date for the Reorganisation will follow once all suspensive conditions are met.
