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South Africa’s MultiChoice Group on Monday said it will not continue talks with Vivendi’s Canal Plus after the board concluded that its offer significantly undervalues the company.
Canal Plus, a top shareholder in MultiChoice, had on Thursday offered 105 rand ($5.55) per share for every MultiChoice share it does not already own.
Canal Plus said the offer – worth 31.7 billion rand according to Reuters calculations – was a 40% premium to MultiChoice’s closing share price of 75 rand on Jan. 31.
MultiChoice said in a statement that a recently-conducted exercise valued the group at significantly above the offer price, excluding any potential synergies which may arise from the proposed deal.
Africa’s biggest pay TV company added that the synergies that Canal Plus has conveyed “need to be factored into any fair offer made” by the French company.
“Therefore, while the board is open to all means of maximising shareholder value, it has conveyed to Canal+ that at this proposed price, the letter does not provide a basis for further engagement,” MultiChoice said.
As a result, MultiChoice has requested the Takeover Regulation Panel to make a ruling as to whether a mandatory offer must be made to all holders of ordinary shares in the company according to the Companies Act.
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