South African corporation, MultiChoice declared today that it had turned down a takeover bid from the French media conglomerate Canal+.
Canal+, which already owned a 30% share in MultiChoice, has terminated negotiations, citing a severe undervaluation of the company.
Canal+ made an offer of 105 rand, or roughly $5.5, per share, for the remaining MultiChoice shares. The South African business asserted, meanwhile, that a recent valuation significantly increased its value.
In a statement, MultiChoice said “Following careful consideration, the board concluded that the proposed offer price significantly undervalues the Group and its future prospects.”
“Therefore, while the board is open to all means of maximizing shareholder value, it has conveyed to Canal+ that at this proposed price, the letter does not provide a basis for further engagement,” MultiChoice added.
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.
Consequently, MultiChoice has asked the Takeover Regulation Panel to rule on whether, in accordance with the Companies Act, a required offer ought to be sent to every owner of common stock in the business.