Weeks after reinstatement, MultiChoice announces exit of Imtiaz Patel as Chairman

South African cable TV company, MultiChoice Group has announced the exit of its chairman, Imtiaz Patel from the role with immediate effect. This just weeks after announcing that he would stay on to oversee a possible deal with French media group, Groupe Canal+.

According to a local report, the move is coming amid concerns about corporate governance at the broadcaster, which is the subject of a takeover bid by France’s Canal+. Mr Patel will be replaced by Elias Masilela with immediate effect.

He would, however, remain involved as a consultant to MultiChoice until October 2028 as per the details of the original announcement of his resignation on 11 September 2023.

Recall that MultiChoice had announced in September last year that Patel would step down on 1 April 2024. In a surprise move, MultiChoice said on 2 April, following a board meeting before the Easter weekend, that it had rescinded the previous announcement.

“Because of the recent ruling by the Takeover Regulation Panel that required Canal+ to make an immediate mandatory offer to all MultiChoice shareholders … the MultiChoice board has reached an agreement with Imtiaz Patel to remain on as chair,” the company said at the time.

“The board believes there is significant benefit in continuity at this time, and Mr Patel has agreed to extend his tenure until the conclusion of the Canal+ transaction or such sooner date as may be determined in light of progress on the transaction,” it said then.

In today’s notice, the company said the plan was always for Patel to step down once certain milestones were reached.“At the time of announcement of 2 April 2024, discussions were in their final stages on key terms of the proposed transaction,” it said.

Explaining why Patel is leaving, just three weeks after the board decided he should stay on, MultiChoice told investors that at the time of the announcement on 2 April, discussions were in their final stages on key terms of the proposed transaction with Canal+.

“The board and Mr Patel have therefore agreed that now would be an appropriate time for Mr Masilela, the current deputy chair, to be appointed as chair as planned and for Mr Patel to step down from the board with effect from the date of this announcement”, the statement said.

Similar: Multichoice is considering Canal+’s $1.9bn buyout offer

Canal+ acquires over 40% of Multichoice’s shares

Meanwhile, French media company, Groupe Canal+ has announced that it has acquired 3,653,492 additional shares in media giant, MultiChoice to bring its total ownership of the South African company to 40.83%.

In a notice to MultiChoice shareholders, Canal+ claimed it acquired the additional shares from 12 to 17 April for R115.95 ($6) and R117.50 ($6) per share. “Canal+ confirms that these acquisitions have already been disclosed to the Takeover Regulation Panel (TRP) as required under the Companies Act,” the company said.

The French media company also indicated its intention to acquire more shares soon. “Save as may be prohibited under the Companies Act and the Takeover Regulations, Canal+ may acquire further MultiChoice Shares after the date of this announcement”, the statement said.

Canal+’s latest disclosure comes a week after MultiChoice announced that the French company had crossed 40% ownership of South Africa’s pay-TV giant. MultiChoice notified shareholders about Canal+’s increased shareholding in a statement on the JSE news service last Friday.

Canal+’s bid to takeover MultiChoice began in 2020 with the French media group making clear its intention to create a pan-African broadcasting powerhouse with about 31.5 million subscribers across over 50 countries. 

The French media company has a broad reach in French-speaking African nations, while MultiChoice has a stronger presence in English-speaking countries, including South Africa, Nigeria and Kenya.

The French media conglomerate made its formal mandatory offer last month after exceeding the 35% threshold stipulated in South Africa’s Companies Act. When its shareholding exceeded 20%, analysts raised concerns that the company could be violating South Africa’s Electronic Communications Act (ECA). The ECA is a stringent Black economic ownership requirement on foreign media ownership that caps voting rights at 20%.