Airtel Money sets IPO price, targets $7B valuation
What's the story
Airtel Africa's mobile payments business, Airtel Money, has announced the price for its upcoming initial public offering (IPO) in London. The shares have been priced at £1.96 each, which would give the company a market capitalization of £5.3 billion (around $7 billion). The IPO will see 270 million existing shares offered to investors and is set to begin trading on October 14.
Market impact
Airtel Money to be separately traded entity
The upcoming IPO will create a separately traded entity for Airtel Africa's mobile money business. This move will give investors direct access to one of the group's fastest-growing operations.
Conditional trading in Airtel Money shares is expected to start on October 9, with unconditional trading beginning when markets open on October 14.
Share distribution
No share sales by Airtel Africa in IPO
The IPO will see the sale of 270 million Airtel Money shares by some shareholders, with an additional 27 million shares available if the over-allotment option is fully exercised.
However, Airtel Africa does not plan to sell any existing shares in this main offer. The group intends to remain a long-term strategic shareholder in Airtel Money and support its growth as an independently listed company.
Future prospects
Expected free float to meet FTSE UK indices criteria
Based on current indications from shareholders, about 16.5% of Airtel Money's issued ordinary share capital is likely to be in public hands after admission.
This could increase to around 17.5% if the maximum over-allotment option is exercised.
The company has also confirmed that its expected free float would make it eligible for inclusion in the FTSE UK indices.