Blu Label Unlimited (BLU) this morning disclosed Cell C's offer price for its imminent listing, saying the stock will be put on sale at between R29.50 and R35.50, making it worth as much as R12 billion.
Peter Takaendesa, chief investment officer at Mergence Investment Managers, says this means the implied market cap is R10 billion to R12.1 billion, although “investors will have to bid at a price level they believe makes sense to them”.
In an announcement to shareholders, the company says the offer size will be as much as R6.5 billion, which includes an up to R338 million overallotment and up to R2.4 billion allocation to an empowerment vehicle.
BLU, through The Prepaid Company, will continue to hold a share of Cell C.
BLU – previously Blue Label Telecoms – disclosed that Cell C's revenue for the first three months of the year was R2.8 billion, 1.7% growth from the previous comparative period. Meanwhile, EBITDA came in at R371 million.
The mobile operator's return to profitability this year reverses over two decades of losses since its 2001 launch.
It also had free cash flow of R255 million in the first quarter. BLU said at the beginning of the month that it would pay its first-ever dividend at the end of its 2027 financial year.
However, any payout to shareholders will depend on factors such as the group's performance, financial position, investment plans, capital needs and strategic priorities.
The company aims to have enough cash on hand to support growth, using debt carefully to maintain flexibility, and may adjust its dividend policy over time, it says.
In addition to these pre-listing disclosures, which ITWeb understands will be this side of the year, BLU said the broad-based black economic empowerment (B-BBEE) structure would include a stake of up to 20% to be held by Sisonke Growth Partners.
Sisonke Growth Partners would house the ultimate beneficiaries − Nubridge Capital, Fordside Enterprises and Sangrilor − all of which are fully black-owned. As a result, said BLU, Cell C would meet BEE criteria upon listing on the exchange.
“Cell C has demonstrated its commitment to advancing meaningful and sustainable B-BBEE in South Africa,” it says.
Empowerment partners will be locked into the stock for up to six years and can't trade any shares for the first 12 months. Following that, shares can be traded, with permission, to B-BBEE parties.
Management, including Cell C CEO Jorge Mendes, will receive 4.5% of the company’s shares at no cost.
Paying debt
In addition to paying dividends, proceeds from the listing will go towards settling debt, says the statement issued this morning.
After navigating a complex debt restructuring following a 2020 default on loans worth around R7.3 billion, BLU invested more than R1 billion in the operator, with much of the remaining debt restructured.
As of May 2025, its exposure to the operator is R3.1 billion, against which it has made provision for loss allowances. BLU initially invested in Cell C for R5.5 billion in 2017 and had to subsequently write its stake down to zero.
Cell C shares will be made available to potential investors in SA, the US, the European Economic Area and the UK.
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