Nigerians can't get enough of MTN

Hot on the heels of strong results in Nigeria, MTN (JO: MTNJ ) has announced the completion of its Series 1 offer as part of a strategy to increase local ownership in the Nigerian subsidiary.

Given the importance of that market to MTN and the horrors it has been through with that government, this is probably a good move.

The offer has been implemented through a bookbuild to institutional investors (a price discovery process) and a fixed price offer to retail investors.

The offer was 1.2 times oversubscribed and there were applications by more than 126,000 investors.

The look-through from pensions funds suggests that around 6.5 million Nigerians now have investment exposure to MTN Nigeria.

Due to the demand, the 575 million offer shares and a further 86.25 million shares were allocated.

This extra 15% is known as a "greenshoe" option, which allows for an over-allotment of shares if demand is strong.

In news that is on-brand for MTN with its digital strategy in Nigeria, this offer was the first time that a digital application platform was used for a Nigerian public offer. More than 74% of the retail participants applied via this platform.

With gross proceeds of around R4.3 billion, MTN Group's shareholding in MTN Nigeria reduces from 78.8% to 75.6%.

There's a maximum further dilution of 0.02%, as there is a share allocation to retail investors who hold their shares until 31 January 2023.This is a great initiative to encourage the right investment behaviour among individuals.

For investors, the assessment will be whether MTN has sufficiently derisked this important asset from a regulatory perspective. The momentum is certainly positive for MTN.

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