Justus Ondari
8 May 2008
Nairobi — Foreign investors will pay Sh5.50 per share; a mere 50 cents more than the locals, in the ongoing Safaricom initial public offering (IPO).
Safaricom House: International offers topped Sh76 billion during the two week bidding period
The Sh5.50 price for the international pool of the IPO represents a 10 per cent premium over the local offering price.
The Government in a statement Wednesday said that the premium was unprecedented when compared to past transactions around the world.
"International institutional investors from every continent participated in the book building process," it said.
Using what is known in stock market parlance as book building-a kind of auction that opened on April 9 and closed on April 23, the IPO generated Sh76 billion (over $1.25 billion) in bids from established international institutional investors, providing the company with a secure international investor base.
Although processing is still ongoing, the Government said initial indications suggest that more than 750,000 local investors participated in the IPO generating almost Sh115 billion (approximately $1.9 billion) in local demand.
"Final results in the local pool will only be known over the next few weeks once application processing is finalised," the statement said of the applications that ran between March 28 and April 23.
Under the IPO, 6.5 billion or 65 per cent of the 10 billion shares on offer were reserved for the local investors with their foreign counterparts taking the remainder.
Final allocations are expected to be announced on May 30. Electronic crediting of CDS Accounts and dispatch of shares is slated to commence by June 4 with trading on the Nairobi Stock Exchange starting on June 9.
The Government said the IPO had by far exceeded the goals laid out at the launch of this process; namely, deepening Kenya's capital markets, maximising revenues for the Treasury and increasing international investor interest in the NSE.
Realise goals
Upon completion, the Safaricom will be the largest sub-Saharan IPO surpassing the SANLAM and Telkom SA IPOs (both from South Africa).
On a pan-African basis it will be the third largest after Morocco's Maroc Telecom and Egyptian Telecom.
The Treasury and the Privatisation Commission, the statement said, would ensure adequate after-market support for the stock.
After the IPO, the public will hold 25 per cent of the issued ordinary share capital with the Government of Kenya holding 35 per cent and Vodafone Kenya Ltd 40 per cent.
Both have agreed not to sell more shares for a period of at least 180 days following the IPO.
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