MTN a takeover target

The Sunday Times reported that investment bankers are looking at MTN as a potential takeover target.

Citing a company insider, the report stated that MTN has attracted interest from investment bankers – but no firm offer was on the table.

MTN’s share price has plummeted from a high of over R260 a share in September 2014 to current levels of around R120 a share.

This made the company cheap to investors, who, according to Ashburton Fund Manager Wayne McCurrie, can pick up MTN at between R150 and R160 a share.

MTN’s troubles may be behind it

MTN has faced many challenges over the last two years, including a large regulatory fine in Nigeria, foreign exchange losses, and losing money because of poor investments.

During this period, the company cleaned house. MTN’s new CEO Rob Shuter will join the operator on 13 March, while new CFO Ralph Mupita will join the company in April.

MTN executive chairman Phuthuma Nhleko said the company has ensured it will avoid a rerun of its Nigerian regulatory problems.

“There is nothing – that we are aware of – that is a big regulatory issue,” said Nhleko.

In South Africa, the company has invested heavily in its network and is turning around its fortunes with subscriber and revenue growth.

MTN’s subscribers in South Africa now total 30.8 million, with increases driven by the prepaid segment – which sits at 25.6 million.

MTN SA’s annual revenue totals R42 billion, fueled by an increase of 1.9% in service revenue and growth of 11.4% in data revenue.

MTN share price over the past 5 years

MTN Share Price

Now read: MTN wins with better network and smartphone sales

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MTN a takeover target