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Multichoice rejects $1.69 billion Buy-out Offer from French Company Canal Plus

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After the board determined that Vivendi’s (VIV.PA) offer substantially undervalues the company, MultiChoice Group (MCGJ.J), a South African company, announced on Monday that it will not be pursuing further negotiations with the company.

Leading MultiChoice shareholder Canal Plus made an offer on Thursday to buy each MultiChoice share that it did not already own for 105 rand ($5.55) per share.

Canal Plus stated that the offer represented a 40% premium over MultiChoice’s closing share price of 75 rand on January 31. The offer is estimated by Reuters to be worth 31.7 billion rand.

A recent exercise, which excluded any potential synergies that might result from the proposed transaction, valued the group at substantially more than the offer price, according to a statement released by MultiChoice.

The largest pay TV provider in Africa went on to say that any reasonable offer made by the French company would have to take into account the synergies that Canal Plus has communicated.

“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,” stated MultiChoice.

The board stated that it is still willing to discuss any offer for a reasonable price with any party.

Canal Plus had stated that its offer was indicative and non-binding, but after due diligence was finished, it planned to present a letter of definite intention to MultiChoice’s board.

Following the announcement of the deal, Canal Plus, which as of Thursday held a 31.67% holding in MultiChoice, increased that stake to 35.01%, according to a second statement from MultiChoice.

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Because of this, MultiChoice has asked the Takeover Regulation Panel to rule on whether, in accordance with the Companies Act, all holders of common shares in the firm must receive a required offer.


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