French television broadcaster Groupe Canal+ has been given an extra 25 days to make a mandatory offer to shareholders of JSE-listed MultiChoice Group.

The South African pay-TV operator disclosed this in a statement to shareholders on Monday, in which it said that the Takeover Regulation Panel (TRP) has granted Canal+ an extension until 8 April to make the enforced offer.

This comes after the TRP ruled that Canal+, after having bought more than 35% of MultiChoice’s shares, had triggered the threshold under South African law that required it to make the mandatory offer.

MultiChoice’s board had on 5 February spurned the Canal+ indicative offer of R105/share and told its shareholders that they no longer had to exercise caution in trading in the group’s shares. But that was before Canal+ upped its stake to beyond 35%.

“Shareholders are advised that the TRP issued a ruling on 27 February to the effect that Canal+ has acquired 35.01% of the voting rights in MultiChoice and, accordingly, a mandatory offer in terms of section 123 of the [Companies Act] has been triggered,” MultiChoice said in a statement to shareholders on 28 February.

According to the regulations, Canal+ must make a “firm intention announcement” to MultiChoice shareholders. Section 111(2) of the companies regulations – an adjunct to the Companies Act – stipulates that the offer price must be, at a minimum, the highest price that Canal+ has paid for acquiring MultiChoice shares in the last six months, TechCentral reported last week.

Offer price

“However, regulation 111(3) allows for deviations from the highest-price-paid principle if the offeror (Canal+) believes that it is not applicable in a particular case. An offeror may consult the [TRP], which has the discretion to agree to an adjusted offer consideration if it deems it appropriate under the circumstances,” according to the regulations.

Canal+ had been steadily buying up shares in MultiChoice since 2020. For much of that time, the South African broadcasting group’s share price soared above the R120/share mark. In the last year, however, the price swung from a peak of more than R150/share, reached in February 2023, to a low point of R63.21/share last November.

Read: Why Canal+ wants control of MultiChoice

It is unclear what the highest price is that Canal+ paid for MultiChoice shares in the last six months, but from historical share price data, the value must be a minimum of between R63/share and R92/share – well below the R105/share the French broadcaster has said it is prepared to pay shareholders to secure a deal.

Fifty percent of the voting rights in MultiChoice, other than those held by Canal+ (understood to be capped at 20%), must agree for the mandatory offer to succeed. Barring that, Canal+ is not at liberty to back out of the deal.

But even if the deal gets approval from shareholders, Canal+’s efforts to acquire MultiChoice could still be stymied by legislation that caps voting control of South African broadcasting licensees by foreign entities at 20%. This restriction is contained in the Electronics Communications Act.