IHS SEEKS JPMORGAN'S ADVICE AS MANAGEMENT FEARS HOSTILE TAKEOVER BY MTN, WENDEL

According to sources familiar with the matter, New York-listed IHS Towers is currently seeking advice from JPMorgan Chase & Co. regarding an ongoing dispute with its largest shareholders regarding the company’s management. The concern stems from the fear that proposed governance changes by MTN and French investment company Wendel, who collectively hold approximately 45% of IHS, could potentially facilitate a hostile takeover. The individuals providing the information wished to remain anonymous due to the confidential nature of the matter.

Wendel stated in a Bloomberg release that shareholders representing around 48% of IHS shares have submitted proposals aiming to align the company’s governance with the best practices observed in US-listed companies. The proposals also seek to enhance market perceptions of the company.

Wendel further criticized the IHS board and management team, accusing them of misleadingly characterizing the governance-oriented proposals as a takeover attempt by a small group of shareholders. According to Wendel, this portrayal is disingenuous and an attempt to divert attention.

When approached for comment, IHS, MTN, and JPMorgan all declined to provide statements on the matter.

The dispute among shareholders arises amidst a significant decline in IHS shares, which have dropped by approximately 60% since the company’s initial public offering (IPO) in New York in 2021. African tower firms are experiencing pressure to make substantial investments in their networks due to the increasing usage of broadband and smartphones on the continent.

Beyond concerns regarding governance, some shareholders are apprehensive about capital allocation and the high prices of assets, as IHS aims to diversify away from its primary market in Nigeria and expand into Latin America and Persian Gulf countries, as per the sources.

MTN, the largest shareholder in IHS with a 26% stake, has recently requested an extraordinary shareholder meeting to vote on the proposed governance changes, which would augment its representation on the board.

In response, IHS announced on Wednesday that MTN does not possess the right to convene such a meeting, citing a 2014 agreement that capped MTN’s voting rights at 20%.

Prior to the company’s IPO, IHS management faced disputes with both Wendel and MTN regarding post-IPO voting rights. These conflicts resulted in a delay in the share sale, according to a previous report by Bloomberg.