TopTV, a digital broadcasting rival to South Africa’s Multichoice, is in financial trouble. Up until now the front-runner to buy the troubled company was StarTimes, a China-backed operation with an existing portfolio of African-based pay-TV investments. A new potential buyer (‘Dynamic TV Consortium’) has now emerged in the shape of local South African entrepreneurs, but with one major snag: Multichoice is an investor in their consortium.
South African TV regulations demand that no outside investor can hold more than 20 per cent of a broadcasting enterprise, and StarTimes has been lobbying for that rule to be relaxed. Satellite operator SES of Luxembourg is a 20 per cent investor in TopTV, and it was widely assumed that StarTimes would be acquiring the SES stake as part of a wholesale restructuring of TopTV’s share structure.
However, while there are undoubted financial complications in StarTimes’ plans, the local market is now concerned that Multichoice is seeking to maintain its monopoly in pay-TV by buying TopTV. Reportedly, the Dynamic TV Consortium is putting up to ZAR500 million ($55.6m) on the table to sweeten the deal and reportedly financed by Multichoice.
TopTV put out a statement late on April 29th, saying somewhat ambiguously “The Business Rescue Practitioner (BRP, the Court-appointed administrator of TopTV) would like to confirm that we have since received unsolicited, non binding expressions of interest from two other interested parties. It is the intention of the BRP to go ahead and present the current plan as published. As part of that process, [the BRP] has an obligation to announce to the meeting the receipt of the additional proposals which cannot be viewed as plans under the current circumstances.”