African tower operator IHS Holding Ltd. found itself embroiled in a tense shareholder standoff during its annual meeting as two of its largest stakeholders, Wendel SE and MTN Group Ltd., who own roughly 45% of IHS, demanded better representation on the company’s board, but their proposals were rejected by the board.
According to anonymous sources familiar with the situation, Wendel and MTN insisted that shareholders with a minimum 10% stake be able to nominate board members. The demands, however, were rejected by IHS’s board, who stated that the proposed changes were not in the best interests of the company or its shareholders as a whole.
So far, both Wendel and MTN have declined to comment on the situation.
The shareholder conflict comes amid a significant drop in IHS’s stock value, which has dropped by 60% since its initial public offering (IPO) in New York in 2021. Tower companies in Africa are facing significant investment demands to support the continent’s growing use of broadband and smartphones.
According to sources, Wendel and MTN also claimed that IHS management failed to provide timely notice of their proposed resolutions and are now demanding that the general meeting be rescheduled to address their concerns.
According to the reports, another point of contention was MTN’s motion to convert its non-voting shares into voting shares, which was also denied. MTN, Africa’s largest mobile operator, currently owns a 26% economic stake and 20% of the voting rights in IHS.
It is worth noting that MTN currently has no representation on the IHS board, whereas Wendel has one, Frank Dangeard. Sources say that according to the shareholder agreement, Wendel has the right to nominate one director for appointment by the board as long as it owns at least 10% of the shares. MTN, on the other hand, lacks a similar right.
This latest shareholder dispute is not the first involving IHS. Prior to the company’s IPO, IHS management clashed with Wendel over voting rights. As the standoff continues, it remains to be seen how the conflicting interests of the shareholders will be resolved, as well as the implications of this governance dispute for IHS and its future operations in the African tower industry.
