Setback for Rothschild as Helios Towers scraps float
Lord Rothschild suffered his second flotation setback in the space of a week after Helios Towers, the African mobile phone masts operator, abandoned plans for a £2 billion flotation yesterday.
Helios gave no explanation for its decision, though its bankers said potential investors were worried about political risk in one of its biggest territories, the Democratic Republic of Congo, according to Reuters. The company was formed in December 2009 and owns about 6,600 towers. It had aimed to have a premium listing in London and a secondary listing in Johannesburg.
The IPO was scrapped just days after Dropbox, the cloud computing storage group, revealed its float would be at a lower valuation than expected.
Lord Rothschild namechecked Helios and Dropbox last month as two forthcoming flotations that he hoped would boost his popular listed investment vehicle RIT Capital Partners. RIT has previously valued its Helios stake at £42.6 million and its Dropbox investment at £28.5 million and hoped to crystallise some value in the floats. However, the two stakes only amount to 2.25 per cent of group net assets.
Helios, which has its headquarters in London, had announced an intention to float only 13 days ago, advised by Merrill Lynch and Credit Suisse. Had it gone ahead, the company was expected to join the FTSE 250 index of mid-sized companies. RIT was a significant shareholder, alongside the hedge funds Soros Fund Management and Albright Capital Management and the telecoms groups Millicom and Bharti Airtel.
One banker advising the company said: “The valuation from market feedback was not enough for the shareholders. We had a lot of interest from investors but they wanted a discount for the political risk in DRC and Tanzania,” Reuters reported. DRC, which has been ravaged by war, is on the brink of a new crisis as protests grow against President Kabila, who was meant to leave office in 2016. Tanzania has been accused of heavy-handed attacks on the mining industry in an anti-corruption drive.
The change of mind leaves Helios free to explore alternatives such as mergers. Two other mast owners, Eaton Towers and IHS Towers, are seen as prospective candidates for consolidation in Africa.
Dropbox said this week its expected IPO valuation would be between $7 billion and $8 billion, well below the $10 billion at which its last capital-raising valued it in early 2014.
Weighing in at £3 billion, RIT is one of Britain’s most popular investment trusts, with thousands of small investors attracted by its risk-averse approach.
RIT had no immediate comment.
thetimes.co.uk/article/setback-for-rothschild-as-helios-towers-scraps-float-6r9ppkmsz
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