MultiChoice lists on Johannesburg exchange

Naspers-backed MultiChoice Group’s shares rose respectably yesterday after the company listed on the Johannesburg Stock Exchange. The new listed company includes MultiChoice South Africa, MultiChoice Africa Holdings, SVOD outfit Showmax, digital platform security provider Irdeto, and all their subsidiaries and affiliates.

However, a slight shadow was cast over the listing by regulator Icasa, which expressed concern that the listing had gone ahead despite a complain placed before the Complaints and Compliance Committee over an alleged contravention of the country’s Electronic Communications Act.

Some local analysts meanwhile said that the IPO price was at the lower end of expectations, possibly a result of lack of commitment by some Naspers shareholders who primarily value the stock for its holding in China’s Tencent.

The listing creates a public company that provides pay TV content to about 14 million homes in 50 African markets, with content deals with eight out of 10 major international studios. The group has 37 sports channels and Showmax has access to 17,500 hours of content, with half being local content.

MultiChoice said that it was continuing to see mass-market growth in Shout Africa, with business elsewhere in Africa stabilising with a value-driven strategy.

The listing includes the allocation of an additional 5% stake in MultiChoice South Africa for Phuthuma Nathi shareholders for no consideration. Phuthuma Nathi, a black economic empowerment initiative, will now have a 25% stake in the South African unit.

“Today’s listing is an important milestone in our exciting journey of growth.  As one of the fastest growing pay-TV broadcast providers globally, our strong financial position at listing is backed by attractive long-term growth opportunities in both subscriber numbers and revenue. MCG has a highly cash generative core with no financial debt, and we are poised to deliver value to our shareholders over time,” said Calvo Mawela, group CEO.

“We are overwhelmingly positive about MultiChoice Group’s future. With the largest pay TV footprint across Africa, we understand our customers and tailor our offering and services to suit market-specific video entertainment needs. This, coupled with a leading content offering, world-class technology and infrastructure, pan-African scale and strong in-country capabilities, positions us well to generate shareholder returns and future growth.”

Bob van Dijk, Naspers CEO, said: “Today is a proud day for Naspers. Listing MultiChoice Group through an unbundling unlocks value for Naspers shareholders by creating the opportunity for them to own a direct stake in MultiChoice Group, a top-40 JSE-listed African entertainment group. We are also very pleased to be able to create further value for Phuthuma Nathi shareholders, who, through MultiChoice South Africa, have already participated in one of South Africa’s most successful empowerment schemes. As MultiChoice Group embarks on its next exciting chapter I look forward to seeing the team build further on their impressive success story.”

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