(Bloomberg) -- Vivendi SE’s Canal+ has offered to buy the shares of South African pay-TV company MultiChoice Group that it doesn’t already own in a deal that values the business’s shares at 46 billion rand ($2.5 billion). 

Canal+, which is MultiChoice’s biggest shareholder with a 31.7% stake, has offered 105 rand per share in cash for the rest of the business, the French media group said in a statement on Thursday. The non-binding bid represents a 40% premium to the company’s last closing price. 

Vivendi aims to combine its local Canal+ operations with MultiChoice, which operates across Africa, creating a group with nearly 50 million subscribers and the resources to invest more in local content and sports. Canal+ said the new group may ultimately seek to sell shares on the South African exchange. 

“We are in a world where we are facing global competitors, most of them from America that have been smart at creating scale through the internet,” said Canal+ chairman and CEO Maxime Saada in an interview. “To face these giants you need to be able to invest in content and technology and to that you need scale.”

MultiChoice shares rose 23% to 92.27 rand at 11:12 a.m. in Johannesburg after earlier jumping as much as 27%, the biggest gain since its listing in 2019. Vivendi fell 1.7% to €10.28 in Paris. 

The announcement of the offer comes two days after French billionaire Vincent Bolloré’s Vivendi formally proposed breaking up the sprawling media and entertainment empire into four separately traded companies, and Canal+ is actively preparing its own listing. 

Read More: Vivendi Is Proposing to Break Up Bolloré Media Empire Into Four

Formed in South Africa in 1985, MultiChoice expanded across Africa in the early 1990s with packages including live English football matches and local shows. The company, which was spun off from Naspers Ltd., owns Showmax, a streaming service that rivals the likes Netflix Inc. on a continent with the world’s fastest-growing and youngest population.

“The bigger we are, the better chance we have of getting access” to content from studios such as Warner Bros Discovery Inc. or the Walt Disney Co., Saada said. “The second element is to invest more in local content. There are millions of African stories that have not been told.”

Canal+ has submitted its non-binding offer to MultiChoice’s board and will deliver a firm-intention letter once it completes due diligence, the company said. There’s no certainty a deal will be reached, it said. 

--With assistance from Benoit Berthelot.

(Updates with chairman’s comments from the fourth paragraph)

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