New York-listed IHS Holding is weighing a bid for Telkom’s tower unit, according to people familiar with the matter.
Deliberations are focused on the structure of the potential deal, although Telkom remains open to offers from other companies and there is no guarantee IHS will buy the unit, according to the people, who asked not to be identified because the discussions are private.
The Swiftnet business is worth about R8.7-billion based on future expected cash flows, according to a recent note from Nedbank.
Tower companies — including IHS Towers, American Tower Corporation and Helios Towers — have been expanding in Africa to tap rising demand for broadband as smartphones become more widespread. Meanwhile, mobile companies have increasingly sought to spin off their towers to focus on their core business, with Vodacom separating its towers portfolio into a new unit in 2021.
IHS Towers is the biggest Africa-focused tower company and has been acquiring assets in South Africa as the country prepares for a scaled roll-out of 5G. The firm reached a sales-and-lease back tower deal with MTN South Africa in 2021.
Read: MTN to sell South Africa towers to IHS for R6.4-billion
Telkom this month said it was expecting offers for its Swiftnet mast and towers unit in March, following the board approval of a full or partial sale of the business.
Read: IHS appoints CEO for South Africa following MTN towers deal
Telkom, South Africa’s third largest mobile operator, abandoned a plan to list Swiftnet last year as the local market stumbled and instead began seeking a buyer for the unit. — (c) 2023 Bloomberg LP