Assured PIC’s MultiChoice stake at 15%

In a move that signals confidence in MultiChoice’s investment case, the government’s investment arm, the Public Investment Corporation (PIC), has increased its stake in MultiChoice to 15.1%, the group said on Friday.

Just days before, the company’s largest shareholder, Canal+, was ordered to make a mandatory offer to other shareholders for the shares it does not already own in MultiChoice.

The French broadcaster recently grew its stake in the pay-TV group to 35%, triggering a mandatory offer according to rules set by the takeover regulation panel (TRP).

The PIC held a 12.25% stake as recently as February 7. That means the investment firm has added 2.85 percentage points to its stake — worth R1.3bn at present market prices. As MultiChoice’s second-largest shareholder its total stake is valued at just more than R7bn. The investment firm may be seen as having made an opportunistic move.

With many expecting Canal+ to raise its offer for MultiChoice, the PIC could be setting itself up for a payday. But the firm has had a track record as a longterm investor, which would point to greater confidence in MultiChoice’s prospects. Other large investors include SG

Nantes Global Securities, M&G Investments, Allan Gray and Vanguard.

At the start of February, Canal+ made an offer to buy out the rest of the company at R105 a share, or just more than R31bn, in what would be the biggest merger & acquisition deal so far in SA in 2024.

The DStv owner snubbed the offer as too low for the business and its prospects, despite being at the top end of the target price range that analysts and brokers have for the stock.

Just less than a year ago, the stock reached a record high of R155.20 but then plunged to a low of R62.31 in November, after the company said headline earnings fell 5% in the six months to September due to rand weakness and more spending on Showmax.

While some analysts are changing their minds after the overtures by Canal+, some — including Sanlam Private Wealth

— are unconvinced. In late February, it signalled it had exited the stock in most of its client portfolios, since it was trading “at close to fair value”.

According to data from MarketScreener and S&P Global Market Intelligence, the target pricing for MultiChoice ranges from R104.50 to R117 a share, with an average of R110.80.

MultiChoice’s share price was up 0.18% at R104.60 at the close of trade on Friday.