TheCable

MultiChoice Group, Africa’s biggest pay-TV firm, has rejected a buyout offer by Vivendi’s Canal Plus.

On February 2, the French TV channel offered to buy all the shares in South Africa’s MultiChoice for $1.69 billion.

Canal+, a top shareholder in MultiChoice, offered 105 rand ($5.55) per share for every MultiChoice share it does not already own.

But in responding to the proposed deal in a statement, MultiChoice rejected the offer after the board concluded that it “significantly undervalues” the company.

After consulting its board, the South African pay-TV a recently-conducted exercise valued the group at a price significantly above the Canal Plus’ offer.

According to Reuters, the South African firm added that the synergies that Canal+ 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.

“The board, however, remains open to engage with any party in respect of any offer which is for a fair price.”

Accoding to a separate statement cited by Reuters, MultiChoice raised its stake to 35.01 percent following the deal’s announcement.

This is higher than the stake of  31.67 percent Canal+ held.

Meanwhile, the French firm had said its offer was non-binding and indicative but had expected to deliver a letter of firm intention to MultiChoice’s board once due diligence had been completed.

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.