MTN Nigeria issues 575 million shares via digital public offering
Nigeria’s largest telecommunications company MTN Nigeria has announced that from Wednesday December 1, 2021, retail investors will be able to purchase up to 575 million shares held in MTN Nigeria at 169 yen per share, a price lower than its stock market price. This public offer is in line with MTN Group’s commitment to reduce its stake in MTN Nigeria from 78.8% to 65% over time. MTN listed its Nigerien business two years ago at 90 per share, becoming the second largest share by market capitalization; its share price has since risen by around 100%.
In particular, this public offering is mainly digital since the shares can be bought online. Bolaji Balogun, CEO of Chapel Hill Denham, an investment bank leading the public offering, explained to TechCabal.
“The beauty of digital is that a lot more people can participate. The customer experience is much better; you can complete your purchase in 3 to 5 minutes. It also reduces the amount of paper that will be used for printing share certificates, ”Balogun said. “Overall we recognize that there are Nigerians who do not have access to a smartphone or the internet so they can go to any money deposit bank or store / agent. MTN nearby to make more requests. “
The offer, which is open until Tuesday, December 14, 2021, will offer many Nigerian retail investors the option of owning shares in MTN Nigeria.
The minimum number of shares that can be purchased is 20 units. To encourage people to buy more, the MTN offer includes one free share for every 20 shares purchased, up to a limit of 250 free shares per investor, an incentive open to retail investors who hold shares for at least 12 months after the award. .
Balogun added that he believed digital sales of these stocks would increase financial literacy on stocks, but also expressed concern that retail investors should be wary of buying from anyone or anyone. any platform.
“There are five investment banks / issue houses mandated to sell: Chapel Hill Denham (the management), Rand Merchant Bank, Renaissance Capital, Vertiva and Stanbic IBTC. On top of that, all (around 200) brokerage firms in Nigeria can sell, ”he said. “The main digital platform allowed to buy is PrimaryOffer, as seen on MTN’s website. Then there is another digital sub-broker, Chaka, which partners with Renaissance Capital.
It is important to note that mobile money agents and MTN stores only provide information on how people can buy from the aforementioned authorized parties.
In response to this public offering announcement, MTN Nigeria’s share price fell 10% on Wednesday to a five-week low, a logical response as investors rushed to buy the offering shares. public MTN at a lower price.
“In my 30 years of issuing shares, I have never seen this number of requests in the first few hours,” said Balogun. “People usually wait until the last few days to start buying. This shows that there is a huge benefit to doing this digitally.
MTN revealed that if the 575 million common shares were oversubscribed by the closing date, an additional 15%, or 86 million more shares, would be offered to the public.