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UPDATE 2-S.Africa's MultiChoice open-minded about Canal+, reports higher profits

* Canal+ upped MultiChoice stake, sparking takeover talk

* MutliChoice has ‘open mind’ about future moves - CFO

* Reports 68% rise in interim profits

* Shares initially rise, but drop back to stand over 1% down (Recasts with interview, adds detail, updates shares)

JOHANNESBURG, Nov 12 (Reuters) - MultiChoice is keeping an open mind about its future relationship with France’s Canal+ Group, which sparked takeover speculation when it doubled its stake in Africa’s largest pay-TV group, chief financial officer Tim Jacobs said on Thursday.

Vivendi’s Canal+ raised its stake in MutliChoice to 12% in October in what it described as a financial investment signalling confidence in both the continent and company.

Jacobs said it was too early to tell whether the move precipitated something more significant, but the two companies had a long-standing relationship and it was the board’s responsibility to assess any opportunities for shareholders.

“We’ll keep an open mind on that basis,” he said in a phone interview after the company reported a 68% rise in interim profits, in line with expectations. Jacobs’ comments suggest MultiChoice would weigh up any proposal from Canal+ and not immediately consider it hostile.

MultiChoice, only spun off by former parent Naspers last year, saw its subscriber base surpass 20 million for the first time in the six months to Sept. 30 - attractive to a company like Canal+ that is increasing its focus on Africa.

Canal+’s African operations are concentrated in French speaking regions on the continent, while MultiChoice reaches 50 countries with mostly English-language content via both traditional TV offerings and streaming services meant to compete with the likes of Netflix.

MultiChoice reported headline earnings per share (HEPS) - the main profit measure in South Africa - of 572 cents ($0.3663) in the first half, compared with 341 cents a year earlier and in the middle of its forecast range. Core HEPS were 43% higher.

It also said it had taken a 20% stake in sports betting group BetKing for $81 million upfront, with a further $31 million performance-dependent payment possible later.

Jacobs said the move would bolster future revenues as it would bring gamblers to its sports offerings, supporting the company’s bottom line once the impact of hefty cost cutting fades.

MultiChoice shares initially rose, but closed 0.14% lower, with the local stock market down 1%.

$1 = 15.6176 rand Reporting by Emma Rumney; Editing by David Goodman and Mark Potter

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