Majority shareholder Airtel Africa said it expects to retain a long-term holding
By Adam Whittaker
Shares in African digital financial-services platform Airtel Money opened slightly higher on its first trading day in London, but its $7 billion valuation came in softer than the company had targeted.
In opening trade, shares in the company, which is also known as Airtel Mobile Commerce, were 2% higher at 200 pence ($2.65) a share.
Airtel Money offered investors 270 million shares at 1.96 pounds a piece, which gave it a valuation of 5.29 billion pounds, equivalent to $7 billion. The shares, which represented 10% of its total share capital, were sold by existing shareholders.
The company had targeted a valuation of $8 billion to $9 billion, a person familiar with the transaction said in September.
Airtel Africa, which is the majority shareholder in Airtel Money, said Friday that it expects to remain a long-term shareholder.
Airtel Money reported earnings before interest, taxes, depreciation and amortization of $676 million in the fiscal year ended March, and currently has 53 million monthly active users. It operates in 13 markets in sub-Saharan Africa, where traditional banking infrastructure is underdeveloped.
The listing is welcome for London's exchange, which has been hit by a drought of listings and a deluge of takeover deals and delistings, leading to an exodus of household names.
This summer, Apollo Global Management agreed to buy British budget airline easyJet after a protracted bidding war. Meanwhile, Flutter Entertainment -- which houses FanDuel, PokerStars, and Paddy Power among its brands -- has canceled its listing in London and made New York its main listing. In May, money-transfer company Wise moved its primary listing to New York, keeping a secondary listing in London. Rental company Ashtead canceled its primary London listing in March and switched to the New York Stock Exchange and rebranded as Sunbelt Rentals, the name of its U.S. business.
The U.K. government has implemented a series of reforms to make London a more competitive place to list. These have included lowering the percentage of shares that must be listed so entrepreneurs can retain a larger stake, and simplifying listing requirements and procedures.