MultiChoice’s total price to French media giant — around R47 billion

French media conglomerate Groupe Canal+ has probably already paid over R16 billion to acquire a more than 31% stake in DStv operator MultiChoice and is willing to spend about another R32 billion more to buy the rest of the company.

MyBroadband analysed Canal+’s creeping takeover of MultiChoice since October 2020 to estimate how much it could have paid for its current shareholding in the company.

Canal+ announced on Thursday that it submitted a non-binding indicative offer to acquire MultiChoice for R105 per share.

However, it already owns over 31% of MultiChoice, which it acquired at various times during the past 3¼ years.

MultiChoice made its first announcement that Canal+ had taken a stake in the company on 5 October 2020, informing shareholders that the French media giant had acquired a 6.5% stake.

Three weeks later, it issued a similar statement announcing that Canal+ had increased its stake to 12%.

At the same time, MultiChoice’s share price rocketed from around R86.50 per share on 15 September 2020 to a peak of over R145 on 26 October 2020.

For our estimate, we calculated the average market price over the relevant periods before such announcements from MultiChoice to estimate how much Canal+ may have spent to acquire their stake.

Wherever we identified patterns like the one in 2020, we calculated the average price over that period.

MultiChoice has provided details on exactly how many shares Canal+ owns in its annual reports since 2021, allowing us to cross-reference those figures to notices containing percentages that have been issued over the years.

A timeline showing Canal+’s confirmed shareholding overlaid on the MultiChoice share price is shown below.

Using average share prices calculated over eight distinct periods on the timeline, we estimated that Canal+ likely paid around R16 billion for the 31.67% stake (140,160,277 shares) that MultiChoice disclosed in its 2023 annual report.

Its average buy-in price would have been around R115 per share.

If you assume that Canal+ increased its stake to 35% between 20 November 2023 and 16 January 2023, its average buy-in price reduces to around R111 while its bill increases to over R17 billion.

MultiChoice’s share price had taken a beating since issuing a cautionary announcement in March 2023 warning investors that revenue growth in its South African business would be below expectations.

It took a further hammering in November when it warned shareholders to expect more pain.

By market open on 20 November, MultiChoice’s share traded at R63.76. At market close on 17 January 2024, it was R91.29.

It is probable that Canal+ filled its bags during this time, as the Companies Act of South Africa stipulates that crossing the 35% ownership threshold triggers a mandatory buy-out offer.

Assuming that Canal+ currently holds 35% of MultiChoice, it would have to pay around R30.2 billion to buy out the roughly 287,633,240 shares it does not own.

Its total purchase price for MultiChoice, including what it has spent since 2020, would be around R47.5 billion.

If you assume that Canal+ only held 31.67% of MultiChoice at the time of its offer, the total purchase price increases to roughly R47.9 billion.

Thanks to Daily Investor’s Drikus Greyling for his assistance with calculating the mean share prices for the periods in question.