A brewing standoff between shareholders of the telecommunications giant IHS spilled into the open at this week’s annual meeting of the company, degenerating into a tense confrontation after IHS dismissed demands from MTN and another of its largest stakeholders.
IHS is the largest telecommunications infrastructure provider in Africa, Latin America and the Middle East by tower count and the fourth largest independent multinational tower company globally.
With its Nigerian head office in Lagos, IHS Towers and its subsidiaries manage over 16,700 sites in Africa’s largest mobile communications market.
Wendel SE and MTN Group Ltd., which together own about 45% of the company, argued at Wednesday’s annual meeting that all shareholders with at least a 10% stake should have the power to nominate board members but IHS’s board dismissed the proposals, according to a report by Bloomberg.
“The proposals requested to be put forward were not in the best interests of the company as a whole or our collective shareholder base,” IHS said in a statement responding to Bloomberg’s questions.
IHS board determined that the proposal was “designed to benefit certain large shareholders to the detriment of other shareholders.”
Wendel and MTN have not commented officially on the standoff.
Some investors are looking for a change after IHS’s stock plummeted, losing 60% of its market value since its initial public offering in New York in 2021.
Tower companies in Africa are struggling to cope with large demands for investment in their networks to cope with surging broadband and smartphone use.
The two shareholders also said IHS management failed to give notice of their proposed resolutions in a timely fashion and are demanding the general meeting be reconvened to consider them.
MTN reportedly sought to convert its non-voting shares into voting ones, and that motion was denied, the people said.
Currently, MTN, which is Africa’s biggest mobile operator, owns a 26% economic stake and controls 20% of the voting rights.
MTN does not have board representation currently, and Wendel has one representative, Frank Dangeard.
“Under our shareholders agreement, Wendel has the right to designate one director for nomination by the board from time to time so long as Wendel holds at least 10% of the shares,” said IHS. “MTN does not have a similar right, which was agreed as part of the IPO to preserve IHS Towers’ independence from a significant customer,” the company said.
Before going public, IHS management clashed with Wendel over post-IPO voting rights in a dispute that delayed the share sale, Bloomberg reported at the time.