…Blackwells suggests it could wage a proxy battle if status quo at cell-tower operator persists – report
What started as an observation at IHS Holding Ltd.’s annual meeting on June 07, 2023, is now snowballing into a major crisis.
Blackwells Capital, a long-term shareholder of IHS, is pushing for the cell-tower operator to appoint new independent directors to its board and offer investors more transparency to boost its stock price, according to this WSJ report.
Recall that Wendel SE and MTN Group Ltd., which together own about 45% in the tower operator, demanded better representation on the board.
They argued that all shareholders with at least a 10% stake should have the power to nominate board members, said the people, who asked not to be identified because the matter is not public.
IHS’s board dismissed the proposals, they said.
Now, an activist investor is ratcheting up the pressure on IHS Holding, says the board changes are necessary to reverse the company’s growing losses and its weak stock price, according to a copy of a letter said to be sent to the company’s directors Wednesday (today).
Current board members include Jeb Bush, the former governor of Florida, and Ursula Burns, who was chief executive of Xerox between 2009 and 2016, according to IHS’s website.
New York-based Blackwells is ranked among the 10 largest shareholders of IHS, which has a market value of about $3 billion, according to a person familiar with the matter.
IHS is incorporated in the Cayman Islands and listed in New York. It oversees a network of close to 40,000 towers across Africa, Latin America and the Middle East, according to its website. The company went public in October 2021, and since then its stock price is down more than 50%, sharply underperforming the S&P 500 over that period.
The activist warned that “it will take all necessary steps to overhaul the current board in the event the status quo persists,” suggesting Blackwells could wage a proxy battle.
IHS faces pressure from other shareholders. Earlier this month, MTN, a mobile operator based in South Africa, called on IHS to hold a shareholder meeting, claiming the company had breached a shareholder agreement over the sale of nonvoting shares. MTN owns a 26% stake in IHS.
This is Blackwells’s second attempt to agitate for change at IHS. It first sent a letter to the board privately in August, but according to the firm, IHS largely dismissed its ideas.
One area at which Blackwells takes aim is IHS’s use of shareholder-disclosure requirements that are allowed given its status as a Cayman Islands-incorporated company. The investor describes them as lax and wants IHS to reincorporate in the more shareholder-friendly jurisdictions of Delaware or Maryland.
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