MTN will sell shares of its Nigerian business at a discount to retail investors in a public offer today as the telecommunication company seeks to expand its local shareholder base in Africa’s largest economy.
MTN Nigeria said Tuesday that the share sale will be priced at N169, an 11 percent discount compared to the N190 at which it closed Tuesday on the Nigerian Exchange Group (NGX) trading platform.
The N169 offer price to retail investors is also a 21 percent discount compared to the 12-month target price of the stock which is N213 per share according to consensus analyst estimates on Bloomberg.
This means that investors who buy MTN Nigeria shares when they open today, December 1, could potentially make a return of 21 percent in one year.
Read also: MTN to give investors 1 share for every 20 bought
The offer, which opens at 8:00 am today and closes at 5:00 pm on 14 December 2021, will last two weeks and will be done electronically, the first paperless public listing in Nigeria.
This means investors can buy the shares from the convenience of their devices.
Investors will be able to submit applications through the Issuing Houses, Receiving Agents (authorised Stockbrokers and Nigerian banks) and online via a unique digital application platform, PrimaryOffer, administered by the Nigerian Exchange Limited.
Though the offer is not for capital raise but to increase Nigerian ownership of its shares, MTN Nigeria could raise N87 billion through the offer to retail investors. That’s in addition to the nearly N10 billion raised from institutional investors last week.
MTN had sold 10 percent of the 575 million shares on offer to institutional investors last week and will now sell the remaining 90 percent which comes to 518 million shares to retail investors.
The initial sale to institutional investors was done to ascertain the price at which to sell the stock to retail investors.
The minimum that an investor can buy in the retail offer is 20 shares.
BusinessDay had exclusively reported that the offer includes an incentive in the form of 1 free share for every 20 shares bought subject to a maximum of 250 free shares per investor.
The incentive is open to retail investors who buy and hold the shares for a minimum of 12 months.
The share sale is part of MTN Group’s plan to sell down 14 percent of its stake in the Nigerian unit and have 2 million Nigerian investors.
“It is a genuine commitment to make Nigerians become shareholders in MTN Nigeria. We are a Nigerian entity and we import talents from across the country into the MTN Group,” Karl Toriola, CEO of MTN Nigeria said.
Temi Popoola, the chief executive officer of the Nigerian Exchange Group (NGX) Ltd said the MTN offer has brought remarkable excitement to the market, in terms of raising investor confidence, especially as the NGX currently lacks a robust retail market.
“We think that a deal would help, especially the amount of publicity that this would bring,” Popoola said.
The telecommunication company’s solid financial performance sets it up nicely to get significant interest from investors. Sources say the share sale to Institutional investors last week was 7 times oversubscribed.
MTN Nigeria is on course to beat last year’s record revenue haul after raking in N1.206 trillion in the first nine months of 2021 which is only N144 billion away from last year’s total revenue of N1.35 trillion, according to data from its financial statement.
The N144 billion MTN Nigeria needs in the fourth quarter to equal 2020’s total revenue is less than half of its quarterly average revenue this year of N340 billion.
The pandemic, which crimped revenues of Nigerian companies last year, seemed to have minimal negative impact on MTN.
