MTN Nigeria launches a digital public offering of 575 million shares

MTN Nigeria, Nigeria’s largest telco, has announced that beginning on Wednesday, 1 December 2021, retail investors will be able to purchase up to 575 million shares held in MTN Nigeria at 169 per share, which is lower than its stock market share price.

This public offering is consistent with MTN Group’s commitment to gradually reduce its stake in MTN Nigeria from 78.8 percent to 65 percent. MTN listed its Nigerian operations two years ago at $90 per share, becoming the second-largest stock by market capitalisation; its share price has since increased by approximately 100%.

Notably, this public offering is primarily digital, with shares available for purchase online. This was explained to TechCabal by Bolaji Balogun, CEO of Chapel Hill Denham, the investment banking firm leading the public offering.

“The beauty of it being digital is that a lot more people can participate. The customer experience is a lot better; you can complete your purchase within 3-5 minutes. It also reduces the amount of paper that’s going to be used in printing share certificates,” Balogun said. “In all, we recognise that there are Nigerians who don’t have access to a smartphone or the internet, so they can go into any money deposit bank or a nearby MTN shop/agent to make more inquiries.”

The offer, which is open until Tuesday, December 14, 2021, will allow many Nigerian retail investors to own shares in MTN Nigeria.

The minimum number of shares that can be purchased is 20. The MTN offer includes one bonus share for every 20 purchased, up to a maximum of 250 free shares per investor—an incentive available to retail investors who hold shares for at least 12 months after allotment.

Balogun went on to say that he believes digital sales of these shares will increase financial literacy about stocks, but that retail investors should be wary of buying from just anyone or any platform.

“Five investment banks/issuing houses have been mandated to sell: Chapel Hill Denham (the lead), Rand Merchant Bank, Renaissance Capital, Vertiva, and Stanbic IBTC.” Furthermore, all (about 200) stockbroking firms in Nigeria can sell,” he added. “PrimaryOffer, as seen on MTN’s website, is the primary authorized digital platform to buy from.” Then there’s Chaka, a digital sub-broker that’s partnered with Renaissance Capital.”

It’s important to note that mobile money agents and MTN shops only provide information on how to buy from the aforementioned authorized parties.

MTN Nigeria’s share price fell 10% on Wednesday to a five-week low in response to the public offering announcement, a logical reaction as investors rushed to buy the lower-priced MTN public offering shares.

“I’ve never seen this many applications in the first few hours in my 30 years of issuing shares,” Balogun said. “People usually wait until the last few days to begin purchasing.” It demonstrates that there is a significant advantage to doing this digitally.”

MTN stated that if the 575 million ordinary shares are oversubscribed before the closing date, an additional 15%, or 86 million shares, will be made available to the public.