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MultiChoice Awaits Canal+ Takeover with Imtiaz Patel at the Helm

Published April 04, 2024
2 months ago

In a strategic move that underscores the significance of corporate stability during periods of significant transition, Imtiaz Patel has agreed to retain his position as chair of leading pay-TV operator MultiChoice. This decision comes amid the impending takeover by French broadcasting giant Canal+ and temporarily defers the company's plans to enhance governance standards in response to shareholder concerns.

Patel, who was slated to step down following investor scrutiny over governance and potential conflicts of interest, had concluded his near three-year tenure last September. This postponement in leadership change arises as MultiChoice approaches a critical juncture with Canal+'s offer to acquire all outstanding shares by April 8.

In a crucial reshuffling, Patel remains chair—providing much-needed continuity—while Elias Masilela, a seasoned nonexecutive director, assumes the role of deputy chair and will become lead independent director, succeeding Jim Volkwyn. Despite these changes, Volkwyn maintains a nonexecutive director position within the board.

The decision to retain Patel comes in light of a recent consultancy contract termination involving Kgomotso Moroka, highlighting the company's active efforts to address governance issues raised by shareholders. Nevertheless, the potential acquisition by Canal+, now holding more than 35% of MultiChoice's shares, has necessitated a temporary hold on governance reforms.

Notably, Canal+ made a significant move in February with an initial buyout offer at R105 per share, amounting to over R31 billion. However, MultiChoice deemed the proposal inadequate relative to its business value and growth prospects. Persisting in its pursuit, Canal+ revised and uplifted its offer to R125 per share on March 5, bringing the prospective valuation of the transaction to about R37 billion. Canal+, already a key shareholder, raised its interest in the company to just above the mandatory offer threshold following the offer's release, prompting a definitive firm intention announcement slated before the set April deadline.

The unfolding events depict a carefully balanced act, with MultiChoice managing corporate governance concerns while navigating the intricacies of a blockbuster acquisition, potentially the largest M&A in South Africa's business landscape for 2024.

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