Amid the MultiChoice acquisition deal by Canal+, the Independent Communications Authority of South Africa (Icasa) has reported a request to transfer the control of Orbicom’s electronic communication and radio frequency spectrum licences to Canal+. Orbiom is MultiChoice’s signal distributor.
The communications regulator disclosed that Orbicom submitted applications on 28 November 2024 to transfer control of its Electronic Communications Service (I-ECS), Individual Electronic Communications Network Services (I-ECNS), and Radio Frequency Spectrum licences to Canal+.
Icasa will process the request based on some criteria such as the promotion of competition in the ICT sector, consumers’ interests, and equity ownership by Historically Disadvantaged Persons (HDPs).
The agency, in reflection on the submission, noted that HDPs hold 40 per cent of Groupe Canal+’s shareholding.
“Any interested party is invited to lodge written representations to the application within fourteen (14) working days from the publication of this notice in the Government Gazette,” said Icasa.
It then pointed out that interested persons should submit their written representations from now till April 7.
The latest revelation is significant to Canal+’s complete takeover of the pay-TV company, Multichoice. Canal+ has been working to purchase the rest of the pay-TV’s shares at R125 per share.
The French TV giant has been gradually increasing its stake in the South African company over the years, passing the 35 per cent mark early in 2024. This, in turn, automatically triggered a mandatory offer for the acquisition of MultiChoice at about $3.03 billion.
In 2024, Canal+ acquired the largest share in MultiChoice by buying an additional 3.65 million shares, increasing its share to 40.83 per cent. The French media company had been acquiring the pay-Tv’s shares on the open market stealthily, a sign that it was determined to acquire full ownership of the firm in the long run.
Canal+ initially showed interest in MultiChoice in 2020 when it wanted to create a pan-African broadcasting giant by combining its dominance over French-speaking Africa with MultiChoice’s dominance over English-speaking Africa. The company has insisted that the acquisition would allow it to challenge big international players in the media and entertainment industry.
While the final acquisition deal is under consideration, Canal+ has continued to buy Multihoice’s shares. The deal will cost the French TV more than R30 billion in cash. TRP’s latest report on Canal+’s shareholding in May 2024 revealed a 45.2 per cent shareholding.
Similar Read: MultiChoice to move on with Canal+ R55bn deal despite regulatory hurdles.
Challenges in the MultiChoice/Canal+ deal
As the French media giant holds legal rights to acquire Multichoice, the deal has witnessed several regulatory hurdles such as securing approvals from the Financial Surveillance Department, the JSE, TRP, and Icasa.
Also, the companies must find a way to continue limiting Canal+’s voting rights to 20 per cent, a requirement for broadcasting licences under the Electronic Communications Act (ECA).
It must also meet the Broad-based Black Economic Empowerment (BBBEE) rules set out by Icasa, which stipulate that licensees must be 30 per cent owned by HDPs. This is a regulatory hurdle that has stalled Elon Musk’s Starlink official launch in South Africa.
The deal will see MultiChoice carved out as an independent entity, under a distinct company – LicenceCo which will hold South African operating licences. LicenceCo will also contract with MultiChoice’s South African subscribers, and the remainder of the group’s video entertainment assets will remain with the Group.
In addition, the Group’s shareholding in LicenceCo will ultimately give it a 49 per cent economic interest and a 20 per cent share of voting rights.
“MultiChoice Group will retain its existing 75 per cent direct interest in MultiChoice South Africa, which will exclude LicenceCo. Phuthuma Nathi will similarly retain its existing 25 per cent interest in MultiChoice South Africa. LicenceCo will enter into various commercial agreements with MultiChoice Group subsidiaries in relation to the services currently provided to LicenceCo by other MultiChoice Group entities,” the companies stated.
The Competition Commission and the Independent Communications Authority of South Africa (ICASA) are considering the proposed acquisition and the DStv owner’s restructuring proposals. The final decision will determine the fate of the deal.
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