In what is the logical next step in Econet’s fascinating journey, the company is seeking to list on the London Stock Exchange (LSE) and also to seek a secondary listing on the Johannesburg Stock Exchange (JSE.)
Bloomberg reports that they obtained this information from people familiar with the matter.
They say the company will seek a valuation of $8 billion. Before you scoff at that valuation first consider all they had to say. The company intends to acquire more African phone businesses and the $8 billion valuation will be based on the resultant larger company.
By African phone businesses we take it they mean telecoms companies that will partly lead to the high valuation. The group still eyes other non telecoms companies in line with their TMT (Telecoms, Media, and Technology) model.
They however stress that the plans are not final and as it is with all listings, market conditions when the company is finally listed will determine the valuation.
The group will sell $1 billion worth of shares in an initial public offering (IPO) on the LSE and may also seek a secondary listing on the JSE. The $1 billion raised will be used for further acquisitions.
Econet has been making quite a number of acquisitions in the last few years as the group solidifies its position in Africa. Econet Wireless Zimbabwe acquired 51% of Cumii Zimbabwe (Private) Limited, an Internet of Things company and in South Africa, Liquid Telecom acquired Neotel Pty Ltd, the largest domestic fiber company in that country.
As mentioned above, more acquisitions are planned, including purchasing some assets from Millicom International Cellular SA, which will lead to the $8 billion valuation making sense. When asked for a response, Econet said,
We are working to streamline these into a vehicle which can be listed. At the moment, Econet considers it premature to discuss further, but will provide further clarity should the listing proceed.
From that response we can conclude that the group is actively seeking the listing.
Econet is an ambitious company and listing on the LSE would make it easier for the group to obtain funding to pursue its vision. The group has been looking to engage foreign investors and listing in London helps achieve that. The group will also get better market visibility.
We will look at what this listing means in a different article.