Canal+ has made an all-cash formal offer for MultiChoice, but the valuation does not fully consider the potential of the DStv owner. MultiChoice's complex structure and emerging ventures make it difficult to evaluate. The offer takes into account the challenges posed by Netflix, Amazon, and other OTT content providers.
Canal+ ’s valuation of MultiChoice considers the strength of the company’s core business but does not fully consider the DStv owner’s potential.
“The valuation of MultiChoice is quite complicated because there are multiple ventures currently emerging from startup J-curves,” he said. “Taking this into account, it looks like the core South African business is then valued at about nine times earnings, which seems to be in the right ballpark,” Cheesman said.For example, the offer may not take into account MultiChoice’s significant tax losses.
In addition, the valuation does not appear to consider the potential improved profitability from recently launched MultiChoice ventures like SuperSportBet and Showmax 2.0.
Canal+ Multichoice Valuation Potential Dstv Offer Complex Structure Emerging Ventures Netflix Amazon OTT Content Providers
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