Industry speculation claims that MTN valued Afrihost at R1 billion, and therefore paid R500 million for a 50% stake in the company.<\/p>\n
On 2 June 2014 the companies announced that MTN is buying 50% +1 of Afrihost\u2019s shares<\/strong><\/a>, and the current Afrihost shareholders are retaining the remaining 50%.<\/p>\n \u201cThe Afrihost acquisition will add scale to MTN South Africa\u2019s online ICT service offering which is focused on the consumer and SME market,\u201d MTN said in a press statement.<\/p>\n \u201cMTN South Africa expects to leverage off Afrihost\u2019s strong customer service, value proposition, and agility, thereby boosting MTN South Africa\u2019s presence in the SME, Corporate\/Consumer and Connected Home segments.\u201d<\/p>\n Afrihost and MTN did not disclose any financial information associated with this deal.<\/p>\n However, two independent industry sources with knowledge of the transaction told MyBroadband that MTN valued Afrihost at R1 billion.<\/p>\n It should be noted that MTN did not necessarily pay R500 million in cash for its Afrihost stake \u2013 the deal may well have been structured differently. There is currently no clarity regarding this issue.<\/p>\n One industry source said that all the executive Afrihost directors \u2013 Gian Visser, Brendan Armstrong, Peter Meintjes, and Greg Payne \u2013 signed long term employment contracts as part of the agreement.<\/p>\n Speculation further suggests that MTN wanted to buy 100% of Afrihost, but the directors refused.<\/p>\n According to the source, Afrihost believes that it can revolutionise the South African telecommunications market with MTN, hence the directors wanted to keep a strong shareholding in the company.<\/p>\n Afrihost would not confirm or deny the speculation.<\/p>\n \u201cAs per the terms of our agreement with MTN, we have agreed to keep information regarding our performance confidential. So unfortunately we cannot share this information,\u201d said Afrihost CEO Gian Visser.<\/p>\n MTN would also not comment on this issue.<\/p>\n \u201cIn line with internal corporate governance, as well as JSE requirements, MTN does not comment on market speculation,\u201d said Nik Kershaw, Executive, Investor Relations, MTN Group.<\/p>\n Visser did, however, confirm that Afrihost\u2019s revenue for the last financial year exceeded R400 million. Visser could not disclose the company\u2019s profit.<\/p>\n This article first appeared on MyBroadband<\/a><\/p>\nAfrihost selling price speculation<\/h3>\n
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