MTN Group Ltd. will list its Nigeria unit in Lagos on Thursday in a move that will value the pan-African wireless carrier’s largest business at 1.8 trillion naira …).
The move is a step toward a partial sell down of the carrier’s majority 79% stake, and was agreed to as part of the settlement of a $1 billion regulatory fine three years ago. MTN Nigeria is the market leader in Africa’s most populous country, with about 60 million customers at the end of last year.
In my model, in June 2018, I arrived at $5.57 billion as the value of MTN Nigeria. Simply, I used the numbers from MTN Ghana to arrive at the pricing range in Nigeria after taking many factors into considerations. This was my conclusion: “That brings the market value of MTN Nigeria to be $5.57 billion.” You may like to read that piece again.
MTN Ghana has 17.8 million subscribers and commands a market share of 47.6%. MTN Nigeria has 54.5 million subscribers with a market share above 35%. Neglecting the market positioning and focusing on the subscriber base, 35% of MTN Nigeria should give 3.06x of the $745 million from Ghana (i.e. $2.3 billion). With this number, MTN Nigeria would be worth $6.57 billion. But since MTN Nigeria does not have the same market positioning as it has in Ghana (48% vs 35% market share), we would drop $1 billion from the number. That brings the market value of MTN Nigeria to be $5.57 billion. Post-IPO, that would give it about 13% of the total value of the Nigerian Stock Exchange, depending on the exchange rate you use.