Shares of IHS Holding, a telecommunications infrastructure operator, continued to decline for a second consecutive trading day after losing out on a Nigerian contract renewal from MTN Group.
On Monday, shares of IHS Holding listed on the New York Stock Exchange tumbled nearly 23% to $4.59, reaching an all-time low and extending the decline that began on Friday. The stock has fallen more than 25% year-to-date.
MTN Group announced last week that it had chosen a subsidiary of American Tower to manage approximately 2,500 network sites in Nigeria. These contracts are set to expire in 2024 and 2025, and IHS Holding confirmed on Friday that it currently manages these sites.
MTN stated that American Towers’ ATC Nigeria Wireless Infrastructure Solutions will take over the management of the affected sites starting in 2025.
According to IHS, the management of these towers generated approximately $45 million in revenue during the second quarter. The company’s total revenue for that period was $546.2 million.
MTN’s decision to diversify its site portfolio appears to be driven by a corporate governance dispute. MTN holds a 26% stake in IHS, and together with hedge fund Wendel, they argue that they should have more influence over the composition of IHS’s board of directors.
Analysts at TD Cowen noted that the decision not to renew the contracts with IHS seems to be related to this dispute. The decline in IHS’s shares reflects investor concerns about potential further damage that MTN could inflict on the company. However, the analysts believe that MTN’s influence may be limited going forward.