The Takeover Panel in South Africa has determined that Groupe Canal+ SA, a French media company, must promptly initiate a mandatory offer to acquire the shares of pay-TV company MultiChoice that it doesn’t already possess, as confirmed by MultiChoice on Wednesday.

Canal Plus, a significant shareholder in MultiChoice with a 31.67% stake at the time of proposing the offer, increased its ownership to 35.01% after announcing the deal earlier this month. This slight rise placed it just above the threshold mandating the company to extend a mandatory offer to shareholders. Following MultiChoice’s cessation of potential acquisition discussions with its primary shareholder, the Takeover Regulation Panel (TRP) initiated an investigation into Canal+’s offer.

On February 1st, Canal+ disclosed its proposal of R105 per share for all outstanding MultiChoice shares, valuing the deal at approximately R31.7 billion and representing a 40% premium over MultiChoice’s closing share price of R75 on January 31st.

Although the offer price was rebuffed by the continent’s largest pay-TV company, citing a significant undervaluation, MultiChoice expressed willingness to engage in discussions with any party regarding a fair deal.

Having surpassed the 35% ownership threshold, Canal+ triggered the requirement, as per South African law, to extend a mandatory offer to shareholders. Nevertheless, MultiChoice sought a ruling from the TRP to clarify the necessity of such an offer.