9mobile Acquisition and Expectations of the Media Industry


Throughout the last three weeks of the new year, one major news has been hanging in the dark with much anticipation from media industry stakeholders.

After a tumultuous period, 9mobile, Nigeria’s fourth largest mobile carrier has been on the hunt for a new investor to rescue it from financial doldrums.

As a very sensitive and technical decision that requires painstaking efforts to pull through. Barclays, the financial adviser to 9mobile on the acquisition said it received bids from more than 10 companies including private equity, holding companies and mobile carriers alike.

While an immediate position on the preferred bidder has not been announced, the implication of a new owner controlling one of Nigeria’s largest advertiser is huge for the media industry.

A new owner might likely come with a new ambition at least in identity and management. From past case studies, these intents often lead to total rebranding, tweaks to business models which might end up in medium to heavy marketing campaigns. However, looking at the company’s dicey position, a new buyer might look at lay-low for a while till its balance sheet shapes up

Prior to the recent form and shape of 9mobile, the company is said to be heavily-leveraged across its capital expenditure (CAPEX) and operating expenditure (OPEX). The media industry has its fair share of the leverage in the tune of millions of dollars. A new owner is expected to grapple to reduce its debt profile instead of making newer commitments.

Whatever scenario plays out at the end of the day, these two pointers should be considered to manage expectations of any stakeholder.

As a takeout, analysts have reached a consensus that 9mobile acquisition a valuable case study for the media industry.

This article first appeared on NEXTGEN, an official newsletter of SBI Media.

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