Outgoing MultiChoice chair scores R23-million payday

MultiChoice has paid former chair Imtiaz Patel a bonus of $1.25 million (R22.75 million) for playing a leading role in the partnership deal between Showmax and US content group Comcast.

According to the broadcaster’s integrated annual report for 2023/24, Patel was awarded the bonus on the recommendation of its remuneration committee.

The former chair achieved two key deliverables within a period set by MultiChoice, which specified that 50% of the bonus was payable on the signing of all required agreements by April 2023.

It stipulated that the remainder payable was payable following the delivery of Showmax’s relaunch in early 2024.

Imtiaz resigned from the MultiChoice board with immediate effect in late April 2024 after his plan to resign earlier in the year was put on hold.

His earlier resignation was postponed so he could preside over negotiations with French media giant Groupe Canal+, which is gradually buying up a large shareholding in MultiChoice.

In September 2023, MultiChoice announced that Patel would step down on 1 April 2024. He would remain involved as a consultant to MultiChoice until October 2028.

However, the last-minute decision to keep him on as chairman caused tension within the company.

Despite this, MultiChoice said the decision was unanimous and noted that Patel wouldn’t receive any additional fees he wouldn’t have received otherwise.

In a notice from early April, following a board meeting on 28 March, the MultiChoice board said there was a significant benefit to having continuity in its leadership during the negotiations with Canal+.

“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.

However, in its announcement of Patel’s immediate resignation in late April, MultiChoice said the plan was always for the chairman to step down once it had reached certain milestones.

“At the time of announcement of 2 April 2024, discussions were in their final stages on key terms of the proposed transaction,” it said.

MultiChoice and Canal+ entered into a cooperation agreement on 7 April 2024 and published a notice of firm intention the day after.

MultiChoice reiterated that Patel would remain involved with the group as a consultant as per the original announcement of his resignation on 11 September 2023.

Canal+ was compelled to make a mandatory offer to buy MultiChoice earlier this year when it exceeded the 35% shareholding threshold stipulated in the Companies Act.

Since its agreement with the South African broadcaster on 7 April, the French media giant has gradually increased its shareholding in MultiChoice. Its creeping takeover began in October 2020.

It last notified the market of its MultiChoice share purchases in mid-May 2024, when it acquired a further 7,374,918 shares in the South African broadcaster.

The acquisition brought its total ownership of the local broadcaster to 45.20%.

It acquired the shares between 8 and 10 May 2024, paying between R119.44 and R119.68.

“Canal+ confirms that these acquisitions have already been disclosed to the Takeover Regulation Panel (TRP) as required under the Companies Act and [the Takeover Regulations],” it said.

“After the aforementioned trades are implemented, Canal+ will hold an aggregate of approximately 45.20% of the MultiChoice Shares in issue.”

The French media giant has been notifying the market of its MultiChoice share purchases through the Takeover Regulation Panel since the companies revealed that it broke through the 40% ownership mark.

“Some shareholders have asked whether Canal+ might cross the 50% shareholding in this way,” said MultiChoice.

“We do not envisage this happening as exceeding 50% ownership would amount to a merger under the Competition Act, which would require prior approval from the Competition Tribunal.”

MultiChoice previously explained that Canal+ would be forced to increase its offer price if it were to buy shares for more than R125 each.

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