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The Reorginisation of MultiChoice South Africa Holdings Proprietary Limited as a Consequence of the Mandatory Offer
MULTICHOICE GROUP LIMITED
Incorporated in the Republic of South Africa
(Registration number 2018/473845/06)
JSE and A2X Share code: MCG
ISIN: ZAE000265971
MultiChoice" or "the Company")
THE REORGANISATION OF MULTICHOICE SOUTH AFRICA HOLDINGS PROPRIETARY LIMITED AS A
CONSEQUENCE OF THE MANDATORY OFFER BY CANAL+
1. INTRODUCTION AND RATIONALE
Shareholders are referred to:
• the combined circular published by Groupe Canal+ S.A.S. ("Canal+") and MultiChoice dated
4 June 2024 ("Combined Circular") setting out the terms and conditions of the mandatory offer
by Canal+ to acquire up to all the issued ordinary shares of MultiChoice not already owned by
Canal+, excluding treasury shares, from shareholders of MultiChoice for a consideration of
ZAR125.00 per share, payable in cash ("the Mandatory Offer"); and
• the various joint announcements related to the Mandatory Offer released subsequently by
Canal+ and MultiChoice on the Stock Exchange News Service of the JSE Limited and the A2X
News Service, including in particular:
o the joint announcement dated 4 February 2025, which described the intended post-
transaction structure of MultiChoice and, in particular, the restructure of
MultiChoice Proprietary Limited ("LicenceCo"); and
o the joint announcement dated 23 July 2025, which announced that the South African
Competition Tribunal ("the Tribunal") had approved the Mandatory Offer
("Competition Approval").
If the Mandatory Offer becomes unconditional, depending on the level of acceptances by
MultiChoice shareholders, Canal+ may acquire up to 100% of the issued ordinary shares in the
Company, excluding treasury shares, through the Mandatory Offer.
As previously disclosed, certain entities controlled by MultiChoice in South Africa are subject to
applicable laws in the electronic communications sector. LicenceCo, an entity under the effective
control of MultiChoice, holds a commercial broadcasting licence issued in terms of the Electronic
Communications Act, No. 36 of 2005 ("ECA"). Section 64 of the ECA places certain restrictions on
foreign entities in respect of commercial broadcasting licensees, such as LicenceCo.
As a result of the Mandatory Offer, to ensure compliance with the foreign control restrictions
mentioned above, it is necessary for MultiChoice to undertake a reorganisation of certain of its South
African operations, which are held through MultiChoice South Africa Holdings Proprietary Limited
("MCSAH").
The proposed reorganisation will be effected through a series of sequential inter-conditional
transactions (the "Reorganisation"). This announcement sets out those steps in the Reorganisation
which result in the effective disposal by MultiChoice of an interest in the MCSAH group (see further
paragraphs 2 to 4 below). Further details regarding the Reorganisation, including details of the
intergroup steps and other transactions which form part of the Reorganisation, are set out in the PN
Circular referred to in paragraph 8 below.
As previously disclosed, the Competition Approval is subject to a number of agreed conditions,
which include the implementation of the Reorganisation ("Competition Approval Reorganisation
Requirement"). The Reorganisation is specifically designed to ensure that the licensed entities
within the MultiChoice group remain compliant with foreign control restrictions under the ECA,
thereby preserving the integrity of the Company's broadcasting and signal distribution licences.
On or about 1 August 2025, the Company, LicenceCo, Phuthuma Nathi Investments (RF) Limited
("PN"), 13th Ave Investments Proprietary Limited ("13th Avenue"), Identity Partners Itai Consortium
Proprietary Limited ("IPIC") and the Trustees for the time being of the MultiChoice (Pty) Ltd Workers
Trust ("Workers Trust") entered into a number of transaction agreements (including various
subscription, repurchase and shareholders agreements) to give effect to the Reorganisation
("Transaction Agreements").
13th Avenue is owned by investment vehicles associated with Sipho Maseko, Ms Neo Lesela, Ms
Khanyisile Kweyama and Ms Philiswe Sibiya, whilst IPIC is owned by investment vehicles
associated with Ms Sonja De Bruyn, Mr Maxwell Nyanteh, Ms Taleleni Moshapo, Mr Ernest Kwinda
and Mr Eugene Govender. These individuals are highly experienced leaders who bring with them
great commercial and industry knowledge. PN is a broad-based black economic empowerment
listed vehicle. The Workers Trust is a broad-based ownership scheme, the beneficiaries of which are
employees of LicenceCo and employees of key suppliers of LicenceCo.
2. INVESTMENT IN LICENCECO
The Reorganisation contemplates, among other things, each of PN, 13th Avenue, IPIC and the
Workers Trust subscribing for various classes of shares in LicenceCo, namely class A ordinary
shares (Class A Shares), class B ordinary shares (Class B Shares) and class C ordinary shares
(Class C Shares). Upon implementation of these subscriptions, the economic interests and voting
rights of the shareholders of LicenceCo will be as follows:
Shareholder Class of Shares1 Economic interest* Voting percentage#
MultiChoice Ordinary Shares 49% 20.00%
PN Class A Shares 17.2% 39.00%
Class B Shares2 9.8%3
1 The Class A Shares are ordinary shares with full economic rights from the outset, whilst the Class B Shares and the
Class C Shares are notional vendor funded ("NVF") shares which entitle the holder to a "trickle" dividend of 20% and
35%, respectively, until the NVF balance is reduced to zero, after which they convert to ordinary shares with full rights.
2 Initial NVF balance of R2 148 000 000 escalated at 75% of the prime rate.
3Notwithstanding that this portion of PN's overall shareholding is notionally vendor funded, the overall financial effect
of its combined shareholding in LicenceCo (though the Class A Shares and Class B Shares) is an effective increase in
Shareholder Class of Shares1 Economic interest* Voting percentage#
13th Avenue Class A Shares 1.3% 16.23%
Class B Shares4 8.2%
IPIC Class A Shares 1.3% 16.23%
Class B Shares5 8.2%
Workers Trust Class C Shares6 5% 8.54%
* Note: The economic interest referred to above includes the economic interest associated with the LicenceCo B
Shares and the LicenceCo C Shares, which are subject to the notional vendor funding mechanic.
# Note: The voting percentage referred to above arises from the application of the foreign control restriction and other
qualifications to the voting rights of shareholders. This voting percentage may adjust if the foreign control restriction
and other qualifications are amended or fall away.
The Class B Shares and Class C Shares will be issued at nominal value. PN will subscribe for Class
A Shares in consideration of the contribution of a loan claim in the amount of R3.774 billion and each
of 13th Avenue and IPIC will subscribe for their respective Class A Shares at an aggregate cash
subscription amount of R287 million.
3. INVESTMENT IN ORBICOM
Prior to the Reorganisation, PN holds an indirect shareholding in Orbicom held via PN's 25%
shareholding in MCSAH. The Reorganisation contemplates, among other things, PN subscribing for
20% of the ordinary shares in Orbicom at nominal value.
Following this subscription, PN will increase its effective shareholding in Orbicom from 25% to 40%
(comprising a 20% direct shareholding and a 20% indirect shareholding held through PN's 25%
shareholding in MCSAH) (together with the PN subscriptions for shares in LicenceCo, referred to as
the PN Repurchase and Subscription).
4. EXTRAORDINARY DIVIDEND
MCSAH will declare a further extraordinary dividend to its shareholders (PN and MultiChoice) of
R1.375 billion of which R343.75 million is attributable to PN. The payment of this extraordinary
dividend is subject to the implementation of the steps in the Reorganisation which preceded the
payment of this dividend.
5. CATEGORISATION OF THE REORGANISATION
The net economic effect of the Reorganisation for MultiChoice is that 26% of the economic interest
in LicenceCo, the licensed broadcasting service provider that contracts with South African
subscribers, will be disposed of, and 15% of the economic interest in Orbicom, the licensed signal
distributor and holder of electronic communications and radio frequency spectrum licences, will be
disposed of.
PN's right to receive dividends in cash from LicenceCo from 25% to 25.2% immediately following the implementation
of the Reorganisation, which will ultimately increase to 27% once the NVF balance is fully reduced.
4 Initial NVF balance of R1 797 000 000 escalated at 75% of the prime rate.
5 Initial NVF balance of R1 797 000 000 escalated at 75% of the prime rate.
6 Initial NVF balance of R1 097 000 000 escalated at 75% of the prime rate.
In accordance with a ruling obtained from the JSE, the Reorganisation has been classified as a
Category 2 transaction in terms of Section 9 of the JSE Listings Requirements and does not require
the approval of the shareholders of MultiChoice.
6. FINANCIAL EFFECTS
Per the audited annual financial statements for the year ended 31 March 2025, the audited net asset
value of LicenceCo and Orbicom as at 31 March 2025 is R11 018 465 000 and R152 028 000
respectively and the audited profit after tax for the year ended 31 March 2025 for LicenceCo and
Orbicom is R6 534 920 000 and R3 920 000 respectively.
The annual financial statements of LicenceCo and Orbicom for the year ended 31 March 2025 were
prepared in accordance with International Financial Reporting Standards and the Companies Act,
71 of 2008, as amended ("Companies Act").
7. SUSPENSIVE CONDITIONS TO THE REORGANISATION AND EFFECTIVE DATE
The implementation of the Reorganisation is subject to the fulfilment or, where applicable, waiver of
various suspensive conditions on or before the Long-Stop Date of the Mandatory Offer, including:
• All remaining approvals necessary to implement the Mandatory Offer (as set out in the Combined
Circular) having been obtained (other than the approval of the South African Competition
Tribunal, which does not yet unconditionally approve the Mandatory Offer as such approval is
subject to the Competition Tribunal Reorganisation Requirement).
• The various Transaction Agreements becoming unconditional in accordance with their terms.
• The adoption of the requisite resolutions by the relevant entities to the Reorganisation, including
the adoption by shareholders of PN of: (i) a special resolution in terms of section 112 (read with
section 115) of the Companies Act ("112 Resolution"); and (ii) a special resolution to amend its
memorandum of incorporation.
• To the extent required, the Court granting its approval for the implementation of the 112
Resolution.
• PN having not received a notice of objection, as contemplated in section 164(5)(a)(i) of the
Companies Act, from any of its shareholders.
• Each of IPIC and 13th Avenue having finalised its arrangements with its funders so that it has
sufficient funds to subscribe for the Class A Shares referred to in paragraph 2.
• Certain other regulatory approvals (including the Prudential Authority) and third-party consents
(including the approval of the funders to the MultiChoice Group) to implement the
Reorganisation have been obtained or, if appliable, waived.
In addition, it is a term of certain steps in the Reorganisation relating to PN that those steps will only
be implemented if the Takeover Regulation Panel has issued, following the fulfilment or where
permitted, waiver of all the suspensive conditions to that step, a compliance certificate to the
Company in terms of section 119(4)(b) of the Companies Act.
The effective date for the implementation of the Reorganisation will occur only after all the
suspensive conditions set out above have been fulfilled or waived.
8. ANCILLARY MATTERS
More detail regarding the PN Repurchase and Subscription and the Reorganisation, including the
steps which comprise the Reorganisation, are set out in the circular to PN shareholders dated
4 August 2025 ("PN Circular"). The PN Circular can be accessed at www.phuthumanathi.co.za
9. RESPONSIBILITY STATEMENTS
The independent board of the Company, individually and collectively, accepts full responsibility
for the accuracy of the information contained in this announcement. In addition, the
independent board of the Company confirms that to the best of its knowledge and belief, the
information contained in this announcement, is true and correct and, where appropriate, does
not omit anything that is likely to affect the importance of the information contained herein, and
that all reasonable enquiries to ascertain such information have been made.
Randburg
4 August 2025
Sponsor
Merchantec Capital
Legal advisors to MultiChoice
Webber Wentzel
Legal Advisors to MultiChoice on Competition and Broadcasting matters:
Werksmans and Herbert Smith Freehills Kramer
Important notice
Shareholders should take note that, pursuant to a provision of the MultiChoice memorandum of
incorporation, MultiChoice is permitted to reduce the voting rights of shares in MultiChoice
(including MultiChoice shares deposited in terms of the American Depositary Share ("ADS")
facility) so that the aggregate voting power of MultiChoice shares that are presumptively owned or
held by foreigners to South Africa (as envisaged in the MultiChoice memorandum of incorporation)
will not exceed 20% of the total voting power in MultiChoice. This is to ensure compliance with
certain statutory requirements applicable to South Africa. For this purpose, MultiChoice will
presume in particular that:
• all MultiChoice shares deposited in terms of the MultiChoice ADS facility are owned or held
by foreigners to South Africa, regardless of the actual nationality of the MultiChoice ADS
holder; and
• all shareholders with an address outside of South Africa on the register of MultiChoice will be
deemed to be foreigners to South Africa, irrespective of their actual nationality or domicilium,
unless such shareholder can provide proof, to the satisfaction of the MultiChoice board, that
it should not be deemed to be a foreigner to South Africa, as envisaged in article 40.1.3 of the
MultiChoice memorandum of incorporation.
Shareholders are referred to the provisions of the MultiChoice memorandum of incorporation
available at www.multichoice.com for further detail. If shareholders are in any doubt as to
what action to take, they should seek advice from their broker, attorney or other professional
adviser.
Shareholders are further referred to ruling issued by the Takeover Regulation Panel on
27 February 2024, which ruling deals with the MultiChoice memorandum of incorporation.
Shareholders can access the ruling on the Company's website at
https://www.investors.multichoice.com/regulatory.php.
Date: 04-08-2025 08:26:00
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