MultiChoice Group announced on Monday that it would not continue negotiations with Vivendi. VIV.PA Canal Plus after its board of directors concluded that the proposal materially undervalued the company.
Canal Plus, MultiChoice's largest shareholderhad on thursday Offer R105 ($5.55) for each MultiChoice share you don't already own.
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Canal Plus said the offer, worth R31.7 billion according to Reuters calculations, was a 40% premium over MultiChoice's January 31 closing price of R75.
Read: Canal+ brings MultiChoice
MultiChoice said in a statement that the recently executed exercise valued the group significantly above the offer price, excluding potential synergies that may arise from the proposed transaction.
Africa's largest pay-TV company added that the synergies brought about by Canal Plus “must be factored in if the French company makes a fair offer”.
Read/Listen: Why Vivendi SE's Canal+ wants to acquire MultiChoice
“The board is therefore open to all measures to maximize shareholder value, but has informed Canal+ that at this proposed price, this letter provides no basis for further engagement,” MultiChoice said.
However, the board added that it is willing to engage with any party regarding an offer at a fair price.
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Canal Plus said its offer was non-binding and indicative, but said it planned to submit a letter of firm intent to MultiChoice's board once due diligence was completed. .
In a separate statement, MultiChoice said Canal Plus held a 31.67% stake in MultiChoice as of Thursday, but has increased its stake to 35.01% following the transaction announcement.
As a result, MultiChoice has requested the Takeover Regulation Commission to rule on whether a compulsory purchase of all holders of the company's common stock is required under the Companies Act.
Read Sense here.
