MTN affiliate IHS ‘fears hostile takeover’

IHS Holding, an African tower operator, is currently in consultation with JPMorgan Chase & Co for advice regarding an escalating standoff with its largest shareholders over how the company is run. This information comes from people familiar with the matter who have asked to remain anonymous.

The Shareholder Dispute

The move to consult with JPMorgan Chase & Co comes as IHS management fears that governance changes sought by MTN Group and Wendel could enable a hostile takeover. MTN Group and Wendel together own about 45% of IHS.

Shareholders representing about 48% of IHS shares have submitted proposals to bring the company’s governance in line with best practice at US-listed companies and to improve market perceptions. Wendel has stated that members of the IHS board and management team are portraying these proposals as a takeover effort by a small number of shareholders, which they claim is disingenuous and an attempt at misdirection.

IHS, MTN, and JPMorgan have all declined to comment on the matter.

The Impact on IHS Shares

The shareholder dispute comes at a time when IHS shares have lost about 60% of their value since the company’s 2021 initial public offering in New York. Tower firms in Africa are facing demands for major investment in their networks as broadband and smartphone use surges on the continent.

In addition to governance issues, some shareholders are also concerned about capital allocation and high prices of assets as IHS seeks to diversify away from its biggest market, Nigeria, to Latin America and Persian Gulf countries.

The Extraordinary Meeting

MTN, the firm’s biggest shareholder with a 26% stake, has requested an extraordinary shareholder meeting to vote on the governance proposals, which would boost its presence on the board. However, IHS has stated that MTN does not have the right to call such a meeting and that the mobile operator’s voting rights were capped at 20% in a 2014 agreement.

This is not the first time that IHS management has clashed with Wendel and MTN. Before going public, there was a dispute over post-IPO voting rights that delayed the share sale.

In conclusion, IHS Holding is currently in consultation with JPMorgan Chase & Co as it faces an escalating standoff with its largest shareholders over how the company is run. The outcome of this dispute remains to be seen.

By Shamiso Miracle

Shamiso Miracle completed her degree in journalism and media studies at the University of Zimbabwe before honing her skills at Savanna News. She then went on to work at iHarare News, becoming a voice for everyday SA citizens who wanted to share their stories. When she's not writing news that entertains and inspires ,Shamiso is an avid reader and a wellness bunny.

Leave a Reply

Your email address will not be published. Required fields are marked *