Fidelity bank banner Bayelsa State banner
Investment bankers circle MTN as woes hammer its share price

By News Express on 06/03/2017

Share on facebook Yahoo mail icon Gmail icon Share on Google+

Views: 2,005

•MTN Chairman Phuthuma Nhleko.
•MTN Chairman Phuthuma Nhleko.

 

With MTN's share price plunging 55% from its peak on rising regulatory burdens, difficult operating environments in places such as Syria and ever-increasing competition in its domestic market, industry insiders are touting the prospects of corporate activity around the mobile operator that is Africa's biggest.

Investment bankers are said to be circling the group chaired by Phuthuma Nhleko as both a potential takeover target by an international player and an acquirer itself. Africa remains one of the few growth spots in an increasingly maturing mobile market.

"Consolidation in this market is a logical and value-adding move for the sector," a company insider said this week, cautioning that in the markets in which it operates the group faced a challenge in getting the approval of competition authorities.

The insider said the company, which operates in 22 countries across the continent and in the Middle East, has attracted interest from investment bankers, although no firm offer was tabled.

From a long-term range of about 10 years or more, McCurrie said there was still much value a buyer could extract.

Apart from its regulatory headaches in Nigeria - further complicated by that country's economy struggling because of low oil prices - MTN has faced rising competition in its domestic market from smaller rival Vodacom and a resurgent Telkom.

MTN had been on the back foot in terms of investments in its infrastructure because of management's focus on its regulatory issues, said Alastair Jones, analyst at London-based New Street Research. "They [MTN] tend to react to competition ... there's been significant management changes. We'll have to see how shareholders will benefit from that."

Since Nhleko's return to lead MTN through the battle with Nigeria's regulatory authorities in November 2015 as executive chairman, the company has appointed a chief executive officer, chief financial officer and chief operating officer among a host of other appointments.

On whether there would be interest in acquiring MTN, Jones - who has had a "reduce" recommendation on the stock since September - said it would be "difficult" for an international operator to convince its shareholders to back a bid, given the challenges MTN faces.

"It's not materially expensive, but certainly not cheap given the challenges it faces ... it would be very difficult."

Kate Turner-Smith, research analyst at BPI Capital Africa, said that if MTN were to be absorbed by an international player another issue from a competition perspective would be the "validity of transferring spectrum licences". These relate to radio-frequency spectrum, which is necessary to offer products dependent on advanced and high-speed technology.

MTN was the subject of merger talks in the late 2000s at least three times. These failed for various reasons.

Previous merger talks included a $23-billion tie-up with India's Bharti Airtel which failed in 2009 after South African authorities allegedly scuppered the deal.

A year later, the mobile operator bid for the African assets of Orascom Telecom, based in the Middle East, but the Algerian government denied approval. Four years ago, there was talk about a renewed merger with another Indian firm, Reliance, but this also fell by the wayside.

Domestically, speculation around a possible deal with the Sipho Maseko-led Telkom has been the order of the day since the group failed with a 2007 bid for the fixed-line assets of what was then a much-troubled state-controlled player. There was renewed speculation about two years ago on a possible tie-up, but it did not materialise.

Consolidation has been a key feature of the local market in recent months with the fate of Cell C taking centre stage.

This week, the struggling and smallest of South Africa's mobile operators secured support for a R5.5-billion bid by Blue Label.

The third-largest mobile operator won support from creditors to push ahead with a debt-restructuring deal involving Blue Label, and in the process fended off a potential rival bid from Telkom. (Sunday Times SA)

Source News Express

Posted 06/03/2017 11:01:16 AM

 

Share on facebook Yahoo mail icon Gmail icon Share on Google+


 

CLASSIFIED ADS

REVEALED: 3 natural ways to get stronger erections, last 25 minutes on bed, and increase manhood size without using drugs. Also, Natural Prostrate Enlargement Remedy.. Get In HERE...

 

You may also like...
Anambra Town Unions condemn attacks by Fulani herdsmen...

KADUNA clash: DEATH TOLL HITS 100 •Over 10,000...

Daura attack & emergency rule: QUESTIONS OVER BUHARI’S...

Relocate your embassies to Jerusalem, CAN tells FG,...

Chatham House Lecture, an acknowledgement of developmental efforts...

Enugu-Onitsha failed road: Senate seeks FG’s intervention

Imperative of second term endorsements for Ikpeazu, By...

Ruthless Judge known as The Butcher confirms mass...

Court refuses to grant Dasuki’s request to quash...

Breaking News: DASUKI LOSES WIFE

Pictured: MAITAMA SULE is ALIVE

Thick dust haze to prevail today in the...

 

Latest News 2019 general elections to cost N242.4bn 3,000 protesters shut down Imo over impeachment plot to oust deputy governor 'Half trillion naira locked in corruption cases' Human Rights Lawyer writes ICC Prosecutor, seeks interrogation of Buhari during visit You’re a failed Senator, Okorocha replies Umeh EFCC fails to present witnesses in Sen Jang’s case Katsina engages 5,000 teachers Dasuki: Court serves warrant of release on DSS, AGF •Family, friends, associates await release Buhari declines assent to 4 Bills Reps to IGP: Beef up security in Adamawa EFCC re-arraigns Orji Kalu, raises charges to 39 counts Buhari assures ICC of free and fair elections in 2019

 

Most Read NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (361,769 views) Nigerian female sex addict opens up, says ‘I like it with both men and women’ (358,283 views) Shameless Genevieve Nnaji exposes breasts in public (286,620 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (235,216 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (214,403 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (212,495 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (186,370 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (168,306 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (156,248 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (152,628 views) Lagos plane crash: Journalist releases victims’ names (147,524 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (138,771 views)

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (52) Business & Economy (3,345) Business Verdict (45) Columnists (886) Complaints & Requests (94) Enterprise & Opportunities (207) Entertainment (516) Features (614) Global Business Monitor (284) International (2,135) Interview (157) Live Commentary (28) Love Matters (127) News (37,197) Opinion (1,024) Pidgin (10) Politics (5,591) Religion (783) Sports (1,612) Stock Watch (33) AMA & Al Jazeera Global Update

 

CBN banner

Firstmobile banner

 

 

NEWS EXPRESS TV

FRANCE vs CROATIA 4-2 Highlights & Goals 2018

 

APO Group Partner

 

 

CLASSIFIED ADS

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera

Advertisement