With MTN’s share price at its worst level in a decade, the emerging-markets operator could be in the cross-hairs of cash-flush international operators, analysts say.

After Nigerian authorities said MTN needed to send $8.1bn worth of dividends back to the country, and then slapped a $2bn tax bill on the stunned operator, the group’s shares have plunged to below R80 – less than a third of the highs reached four years ago.

At these levels, MTN could be attractive to operators such as China Mobile, which is sitting on net cash of about $70bn (R1-trillion) and has signalled its intent to make deals, according to Alastair Jones, a UK-based analyst at New Street Research.

China Mobile said in a statement on its website on September 10 that it had opened an office in Johannesburg and that it had signed an agreement with MTN for a "strategic alliance relationship".


"The two companies will collaborate on international business expansion, international transmission interconnection and network resources sharing etcetera," the state-owned operator said.

An MTN spokesperson said the group was not yet in a position to discuss the partnership.

Jones said it was possible that China Mobile could be interested in buying MTN’s troublesome business in Nigeria, which the market now values at close to zero, or that it could purchase a minority stake in the entire MTN Group.

The Chinese operator bought an 18% stake in Thai operator True Corp in 2014.

A 20% stake in MTN would cost it just R30bn at current valuations, a mere drop in the ocean for the Hong Kong-listed behemoth.

Having a state-owned Chinese operator as a strategic investor could also help MTN in its tussle with Nigerian authorities, Jones said.

"China Mobile is over 70% owned by the government, so if Nigeria hurts China Mobile they hurt the government – Nigeria has got to be sensitive to that. It’s not necessarily a perfect solution but it’s an opportunity."

A portfolio of African assets could also "sit pretty nicely for China Mobile", Jones said. MTN operates mobile networks in 19 African countries and four Middle Eastern states.

"They would be able to fund the business, and there would be some sort of political relationship that could help."

After dipping below R70 for the first time in 12 years early last week, MTN’s shares recovered slightly on Thursday after authorities in Nigeria said they were working towards an amicable solution to the standoff.

The central bank said late on Wednesday it was engaging with MTN and its four banking partners there. The parties had provided "additional information, which is currently being reviewed with a view to arriving at an equitable resolution".

MTN has said the central bank’s claims that its repatriations were illegally converted preference shares were untrue, and that it moved ordinary dividends out of the country.

Nigeria fined MTN $5.2bn in 2015 for not disconnecting unregistered SIM cards. After talks, the fine was cut to slightly more than $1bn. Some analysts ask if Nigeria, MTN’s biggest market, is worth the risk.