Helios Towers Ltd met with a tepid response for a long-delayed share offering that gives investors a foothold in Africa’s fast-growing wireless tower industry.
The stock is likely to price at 115 pence apiece before the Tuesday listing, the bottom end of the initial range, bringing proceeds of about $360 million, according to terms seen by Bloomberg. The company was originally looking to raise as much as $500 million.
Shareholders including Millicom International Cellular SA and Bharti Airtel Ltd are selling down their stakes in the IPO, with Helios set for a market valuation of $1.42 billion to $1.79 billion and a minimum free float of 25%.
The London-based company has more than 6,800 towers spread across five African countries and needs the money to step up its rollout of fourth-generation mobile services and keep pace with soaring mobile data consumption on the continent.
New share sales in Europe have struggled to drum up enough interest this year. With the exception of some recent, high-quality listings such as EQT AB and TeamViewer AG, IPOs have priced near or at the bottom end of their asking price ranges.
While sellers often sought valuations in line with near-peak levels in publicly traded stocks, buyers have taken a more cautious view. CM.com and Congatec decided to delay their IPOs rather than see them fall flat.
The London market is particularly quiet and Helios is one of several African and Middle Eastern companies that are helping to keep it alive.
Helios already had to cancel one IPO attempt last year. It was one of three African tower firms that tried to sell stock in London or New York. The most optimistic estimates gave them a potential combined value of $15 billion before choppy markets scuppered the plans and Helios’s two peers went down other routes.
The biggest, IHS Towers, decided to raise $1.3 billion via the debt market in two offerings that will close next week. The other, Eaton Towers Ltd, is being bought by American Tower Corp.
Helios serves carriers including Airtel Africa Plc, MTN Group Ltd and Vodacom Group Ltd. It’s the only independent tower operator in the Democratic Republic of Congo and Tanzania, has operations in Ghana and launched in South Africa this year.