Global telecoms giant lines up bid for Telkom tower unit
New York-listed IHS Holding Ltd. 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.
IHS and Telkom declined to comment on the matter. Telkom shares rose as much as 6.6% on the news, closing 4.2% higher on Tuesday.
Tower companies – including IHS Towers, American Tower Corp. and Helios Towers – have been expanding in Africa to tap rising demand for broadband as smart-phones 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 a fifth-generation mobile network. The firm reached a sales-and-lease back tower deal with MTN in 2021.
State-owned 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.
Telkom, South Africa’s third-largest operator, abandoned a plan to list Swiftnet last year as the local market stumbled and instead began seeking a buyer for the unit.