Boardroom drama at MultiChoice explained

MultiChoice announced on Tuesday that its chair, Imtiaz Patel, would step down with immediate effect – around three weeks after it was announced that he would delay his retirement to stay at the company, creating uncertainty about the seemingly abrupt decision.

This comes as the company is facing a takeover from French media giant Canal+, which is looking to buy the broadcaster for R125 per share.

On 11 September 2023, MultiChoice announced that Patel would be stepping down from his position as board chair effective 31 March 2024 and would be replaced by Elias Masilela, the current deputy chair.

On 28 March 2024, MultiChoice held a board meeting in which it decided that Patel would defer his resignation to oversee the Canal+ deal.

It said he would stay on “until the conclusion of the Canal+ transaction or such sooner date as may be determined in light of progress on the transaction”.

The board announced this decision on 2 April 2024 due to the Easter weekend holidays over that period. However, on 23 April 2024, MultiChoice announced that Patel would step down with immediate effect.

The company explained that, at the time of the announcement on 2 April 2024, discussions were in their final stages on key terms of the proposed transaction with Canal+. 

These discussions culminated in MultiChoice and Canal+ –

• Entering into a co-operation agreement on 7 April 2024.
• Issuing a firm intention announcement on 8 April 2024.

“Given these developments, the progress that has been achieved thus far and the fact the Independent Board has been constituted and will fulfil its obligations under the Takeover Regulations, the proposed transaction has now shifted to the next phase,” MultiChoice said.

“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.” 

MultiChoice said Patel will remain involved in assisting the company on a consultancy basis.

MultiChoice ended the announcement by thanking Patel for his “extraordinary service and sacrifices during his tenure as chair” and wishing Masilela every success in his new role.

The decision explained

MyBroadband reported that MultiChoice, when asked if it would go back and explain this more clearly and avoid all the negative press from its 2 April notice, said it would not because there are regulatory processes involved requiring that things be done according to a set protocol.

Daily Investor asked MultiChoice what these processes were and was told that Patel was due to step down as MultiChoice Chair effective 31 March, but at that stage, the discussions with Canal+ were at a critical point.

The company had to finalise and announce the material terms of the mandatory offer required by the Takeover Regulation Panel and the accompanying cooperation agreement. 

“As a key person involved in the negotiations, the MultiChoice board therefore asked Mr Patel to defer stepping down from the board and as chair until a later, more suitable date,” the company said.

When asked if it was always the company’s plan for Patel to step down when this stage of the transaction with Canal+ was reached, the company said, “Yes. As communicated to the market in the SENS on 2 April, the board had reached an agreement with Mr Patel to remain on as Chair until a date to be determined in light of progress on the transaction”. 

MultiChoice explained that all changes have been communicated to the market and investors, as required by various regulatory standards. 

“In the SENS on 23 April, MultiChoice announced that Mr Masilela would be appointed as Chair and that Mr Patel would step down from the board with effect from the date of the announcement, which was 23 April,” MultiChoice said.