MTN launches R35bn IHS Towers full takeover

MTN Group has agreed to take over the approximately 75% stake in mobile infrastructure company IHS Holding Limited that it doesn’t already own for $2.2 billion in cash (around R35.2 billion), uniting Africa’s biggest wireless carrier with one of the continent’s largest tower operators.

IHS investors will get $8.50 per share, the companies said in statements on Tuesday.

Read the Sens announcement here

The price is a 3% premium to the IHS’s closing share price on 4 February, before Bloomberg News reported on the plans, and a 9.7% premium to the 30-day average as of that day. The deal values the entire company at about $6.2 billion (around R99.4 billion) including debt.

The deal gives MTN direct ownership of infrastructure that it previously leased and marks a shift from its earlier strategy of divesting tower assets.

The additional control puts MTN in a position to cut leasing costs and deepen its role in Africa’s telecommunications build-out, MTN CEO Ralph Mupita said.

“This transaction gives us a unique opportunity to buy back our towers and strengthen our ability to be partners for progress to the nation states in which we operate.”

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IHS fell 1.6% to $8.16 at 11:57 am in New York. The shares have gained 9.4% this year.

MTN will fund the transaction with $1.1 billion of IHS cash, along with its own liquidity and debt. The mobile company will require IHS to finish selling its Latin American tower and fiber operations before closing, leaving just the African tower business.

The African unit is valued at about $4.8 billion in the deal.

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Another major shareholder, Wendel, has also agreed to vote in favour of the transaction. Combined, MTN and Wendel hold 40% of the voting shares.

The deal will need investors controlling two-thirds of the stock to approve it before it’s allowed to go through.The deal will also settle a long-standing dispute between MTN and IHS over governance issues, voting rights and board representation that started in 2023, when a takeover was first considered.

Read: IHS seeks JPMorgan’s advice as management fears hostile takeover [June 2023]

IHS listed in New York in 2021 at $21 a share, but reduced infrastructure spending in some of its markets and uncertainties caused by shareholder tension contributed to a slide in the stock.

MTN’s share price

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