Cell C is heading to the public market with a proposed JSE listing that pegs the offer price between R29.50 and R35.50/share – a range that implies a post-listing market capitalisation of between R9.5-billion to R12.1-billion, depending on the final share count and whether an over-allotment is exercised.

The transaction is a secondary sale by The Prepaid Company (TPC), a wholly owned subsidiary of Blu Label Unlimited Group. Cell C itself won’t raise primary capital under the offer.

By comparison, Telkom has a market value of R25.3-billion. Vodacom Group and MTN Group — South Africa’s two largest telecommunications operators, which also have extensive operations in other markets — are valued at R289-billion and R303-billion, respectively.

For the Cell C listing, up to 173.4 million ordinary shares will be sold, with a further 9.52 million shares available for stabilisation (the “over-allotment”). At the maximum 182.92 million shares, the offer represents up to 53.8% of the company’s issued equity immediately after admission to the JSE under the code CCD.

Because the offer comprises more than half of the equity at the top end, the total issued shares post-listing can be inferred. Including the full over-allotment, the share count is about 340 million. That translates to R10-billion at the lower end of the valuation range and R12.1-billion at the upper end.

Cell C disclosed group pro forma Ebitda (earnings before interest, tax, depreciation and amortisation) of R3.7-billion for the year to 31 May 2025 and expects gross debt of about R2.75-billion upon listing (post-restructuring). Using the 340 million share assumption, that means a mid-single-digit enterprise value/Ebitda multiple range.

BEE transaction

The JSE has approved admission subject to various conditions. The offer opens on 13 November 2025 and closes on 21 November. Successful applicants will be advised of allocations on 21 November, with the final offer price published on 24 November. Settlement and first trading is targeted for 27 November. If minimum acceptances required to meet the JSE’s spread/free-float rules aren’t achieved, admission will not proceed.

Read: Blu Label may declare special dividend on Cell C listing

Up to 68 million shares (about R2.4-billion at R35/share) are reserved for a vendor-funded broad-based black economic empowerment special purpose vehicle (Sisonke Growth Partners) to ensure 30% black ownership at admission. The BEE SPV is subject to a six-year lock-up (no disposals in year one; up to 20%/year thereafter to qualifying black investors, with the consent of TPC).

Cell C management’s near-term guidance points to low-to-mid-single-digit revenue growth, Ebitda margins in the low-20s percentage range and a capital intensity ratio in mid-single digits; over the medium term, the company will target a payout to shareholders of 30-50% of free cash flow. – © 2025 NewsCentral Media