Canal+ and MultiChoice have announced they are assessing and finalising suitable structuring options following the conclusion of discussions surrounding the French media giant's ambitious R55 billion buyout of the South African private broadcaster.
This transaction represents a pivotal shift in the media market and raises crucial questions about ownership and empowerment in a competitive industry.
According to the companies on Tuesday, the envisioned post-transaction structure will likely be enacted by the MultiChoice Group on or shortly before the Closing Date, ensuring compliance with the relevant restrictions on foreign ownership while safeguarding MultiChoice's Broad-Based Black Economic Empowerment (BBBEE) credentials.
This strategic approach aims to navigate not only local laws but also the intricate landscape of corporate responsibility in South Africa.
Key to this initiative is Phuthuma Nathi, a BBBEE share scheme representing over 70 000 shareholders.
Both Canal+ and MultiChoice have engaged with Phuthuma Nathi's board of directors, which has given in-principle backing for the transaction.
An Independent Board of Phuthuma Nathi will now be formed to review and evaluate formal proposals, adhering to the necessary regulations.
Maxime Saada, CEO of Canal+, expressed optimism regarding the transaction’s potential, asserting it will create a unique global media company with deep roots in Africa and emphasised the importance of BBBEE in the structure of the deal.
“With the scale, expertise, and creativity to rival the largest players in the media sector, I am confident that the contemplated post-transaction structure will comply with South Africa's laws and regulations,” Saada said.
Under the proposed structure, the MultiChoice Group will be re-organised.
The current holder of the South African broadcasting licence, MultiChoice (Pty) Ltd, will be separated from the group to operate as an independent entity, named LicenceCo.
This entity will manage the subscription broadcasting licence and contract with South African subscribers, while a majority ownership will reside with Historically Disadvantaged Persons (HDPs) through Phuthuma Nathi, which will hold a 27% economic interest in LicenceCo.
Additionally, two well-established black-owned and managed companies—Identity Partners Itai Consortium and Afrifund Consortium ran by Sonja De Bruyn and Sipho Maseko respectively —will also join the ownership mix, alongside a Workers' Trust (ESOP).
Calvo Mawela, CEO of MultiChoice Group, expressed satisfaction with the ongoing progress of the transaction.
“In a fast-evolving industry that is becoming increasingly competitive, the opportunity to combine our efforts is something that continues to excite us. Our long and proud history of delivering value to shareholders in Phuthuma Nathi inspires us to broaden BBBEE participation in our business with new partnerships,” Mawela said.
The future of this transaction promises not just to reshape ownership but also to enhance the service offerings available to subscribers as MultiChoice Group will retain its existing 75% direct interest in MultiChoice South Africa, excluding LicenceCo.
This involves the establishment of commercial agreements to ensure the operational continuity and quality of services provided to LicenceCo.
BUSINESS REPORT