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Thursday, September 07, 2006

Safaricom: IPO Mania... Coming soon to the NSE

Safaricom's IPO will be the "Mother of IPOs" when it happens!

The government (thru Telkom) owns 60% while Vodaphone owns 40%. The current CEO is a Vodaphone nominee/appointee.

Value:
  • Vodaphone had offered $100 Million for 11% of Safaricom in 2005 thus valuing Safaricom at $900 Million (KShs 68 Billion)
  • PKF valued Telkom's 60% of Safaricom between KShs 34-57 Billion thus valuing the entire shareholding of Safaricom at KShs 57-95 Billion range.
The government wants to raise KShs 27 Billion before the elections by selling 9% of Safaricom to Vodaphone (at a price Vodaphone accepts to give up their "right of first refusal") then floating about 26% of the firm on the NSE, leaving Telkom with 25%.

Opinion in Blue
The listing could be achieved as an "Offer for Sale" or "IPO".

The IPO is a better way to go since it will raise cash for Safaricom to reinvest in Kenya & within the EAC while keeping the cash out of the government's hands so close to election time.
Nevertheless, the need for cash to settle Telkom's debts, facilitate restructuring & for those on the government's gravy train, it is likely there will be an "Offer for Sale".

Based on the hype & profitability of Safaricom, the IPO will be a blockbuster if fairly priced. I expect strong interest from Kenyans from all walks of life, Kenyan diaspora, EA citizens, EA institutions & foreign fund managers.

21 comments:

Ig-know-rant said...

Defintely an IPO to look forward to!!

Anonymous said...

Coldtusker: has there been any official word from the govt on when this might happen? This will definitely be the mother & gransmother of all IPOs

Jakarumba said...

The year 2007 i=will be year year of Greatest IPOs. Safcom and Kenya-Re will put Kengen to shame. Scangroup will look like a joke and Equity will be nowhere in NSE history.
Shrewd Kenyans must start reorganising their portfolios.

coldtusker said...

The link leads to s story about some PS or Minister talking of a privatisation by April 2007.

At best he is on the money, at worst he is off a few months! I bet it will be done BEFORE the 2007 elections if Vodaphone plays ball...

Kagz said...

Dear Tusker Baridi :)

I like being missed. (LOL!!!)

If you want to hear from me then write to sanebrownlady@yahoo.com

I need your 2cents on NSE 101 and other non-NSE stuff.

I stopped blogging to focus on more productive stuff.

Adios!

pesa tu said...

Yes, this is the IPO we want.

nelie said...

My take is that Vodafone will bite the 9% on offer at the government's pricetag.
Has anyone heard about Telkom NOTNOT owning all 60 percent of Safaricom - that a certain consortium owns a bit of that meaty pie?

gathinga said...

all we have at the moment is govt ministers and bureaucrats making pronounce ments. we havent had anything concrete, like an attempt to renegotiate the shareholders agreeement that is skewed in favor of vodafone or an attempt to sell the 9% to vodafone... am sceptical on this IPO

coldtusker said...

I believe there is a serious effort to "sell" Safaricom.

- It looks good for kibz that they "gave" the public a chance to make money!
- The govt needs cash to pay off Telkom debts & pensions which is ADDITIONAL goodwill.
- Amos Kimunya has his head screwed on straight. These financial reforms will pay off big in a few years.

coldtusker said...

Gathinga - The govt folks are in London {kwani the Vodaphone guys couldn't come here?} to negotiate the sale of 9% of Safaricom...

The gov't wants to cash to look good to the 11,000 voters (& families) as well as do an IPO that will be touted as a NARC-K "event"...

Tafadzwa said...

Africa is fast becoming the investment destination attracting global investors as reflected by the percentage of 'beyond African' applicants. The recently concluded Malawi Property Investment Company IPO in Malawi is one such evidence and there is no doubt the interest in Safaricom is overwhelming

Anonymous said...

HELLO COLD TUSKER, UKO AMA THE CHAOS IS KEEPING YOU MORE OCCUPIED? WHAT NEWS ON THE MUCH ANTICIPATED SAFARICOM IPO?

Tafman said...

Safaricom IPO postponed
Written By:Rose Kamau/Timesonline , Posted: Sat, Jan 05, 2008


The flotation of Safaricom, Kenya's largest mobile phone operator has been postponed following the post election violence that had hit parts of the country.

The Government had hoped to sell 25 per cent of the group - which is part owned by Vodafone - in a public offering that was expected to be the country's biggest.

The sale, on the Nairobi stock exchange, was on course to raise up to 40 billion shillings. It had already been delayed several times.

Trading on the NSE was suspended on Thursday where business was halted an hour after opening when gunfire was heard in the business district.

The World Bank has cautioned that the post election violence could threaten the country's impressive economic gains and harm regional economies that depend on its status as an East African business hub.

GDP growth stood at an estimated 6.9 to 7 per cent last year.

Analysts said the timing of the violence, during a crucial month for tourism, meant that its impact would be further exacerbated.

Vodafone holds a 40 per cent stake in Safaricom, with 60 per cent held by Telkom Kenya.

Last year Safaricom reported net profits of 12 billion shillings on sales of 47.4 billion shillings.

(link to source: http://www.kbc.co.ke/story.asp?ID=47430)

Bayo Adekanmbi said...

Safaricom’s IPO over-subscription is a classical case of the pent-up desire of Africans to demonstrate their appreciation for worthy investment. Telco businesses are the most profitable in African continent, even with the huge CAPEX, the average margin per user is relatively high compared to the world’s average. Africans will like to put their money where their mouth or voice is because each call they make is a call of wealth to their pocket

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One should always note that if they want to invest money they should do proper research be it fundamental research or technical research. Just think how come you can invest
your money without any convincing reason for the same?

Indian stock market is one of the most happening and emerging market. Major Indian stock exchanges are BSE and NSE and both are of world class standards.

So grab good stocks and invest that’s the bottom line.

We hope to see you in major profits.

Regards
SHARETIPSINFO TEAM

sharetipsinfo said...

Hi,

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One should always note that if they want to invest money they should do proper research be it fundamental research or technical research. Just think how come you can invest
your money without any convincing reason for the same?

Indian stock market is one of the most happening and emerging market. Major Indian stock exchanges are BSE and NSE and both are of world class standards.

So grab good stocks and invest that’s the bottom line.

We hope to see you in major profits.

Regards
SHARETIPSINFO TEAM

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