PUBLIC OFFERING
MTN’s Nigeria listing may lift value
‘I don’t think there’s any downside [to the IPO] — it just crystallises that entity in Nigeria,’ says one portfolio manager
A local listing could push up the valuation of MTN’s business in Nigeria, which trades at a discount to the group and its emerging-market peers, says Imtiaz Suliman, portfolio manager at Sentio Capital. MTN Group CEO Rob Shuter said last week the initial public offering (IPO) of the Nigerian unit should be completed within six months, subject to market conditions. The IPO is part of an agreement between MTN and Nigerian regulators, after the company missed a deadline to disconnect unregistered subscribers in the West African country. MTN was fined $1bn. "I don’t think there’s any downside [to the IPO] — it just crystallises that entity in Nigeria," Suliman said. Domestic investors could "bid that asset up given that it’s a decent asset with quality underlying cash flows". MTN Nigeria was likely to trade at an enterprise value to earnings before interest, taxes, depreciation and amortisation ratio of about five, which was behind the group and below the norm for emerging market teleco...
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