Bank: “Canal+ buying into MultiChoice a long-term investment”

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Vivendi-backed Canal+ clearly believes Africa is worth a major investment having placed €140 million (Rand 2.8bn) into a 6.5 per cent stake in South Africa’s MultiChoice, which last year was spun off as a stand-alone unit from Naspers.

Evidently, Canal+ has been quietly building its shareholding since April this year and has now declared its interest having exceeded the 5 per cent obligation threshold.

Deutsche Bank, in a note to clients, explains that MultiChoice is the largest pay-TV operator in continental Africa with 19.5 million subscribers operating in 50 countries with a strong presence in English-speaking countries in Eastern and Southern Africa.

“For the March-ended FY20, MultiChoice reported full-year revenue of ZAR51.4 billion (or €3128 million) with an operating profit of ZAR8.3 billion (or €503 million) and net income of ZAR507 million (or €31 million),” says the bank.

“Meanwhile, Canal+ has 20.4 million total pay-TV subscribers across continental Europe, Africa, and Asia, of which 5 million are in Africa. We estimate C+ Africa revenue was €0.7 billion in 2019, representing nearly 14 per cent of the group. Canal+ has a strong presence in the French-speaking countries in Western Africa, therefore the two operators directly compete in very few markets,” adds Deutsche Bank.

The bank tells its clients that Canal+ considers its equity investment in MultiChoice as a long-term financial investment, and expects to further strengthen its partnership in the region.

“Overall, the size of Vivendi’s stake in MultiChoice is small in the scheme of things, representing <1 per cent of Vivendi’s current market cap. Growing cooperation between the two largest pay-TV operators in the region is a small positive regarding technical collaboration, however, we see limited scope for synergies in terms of content procurement given the linguistically different audiences.”


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