Safaricom IPO commences today; valuation defended

28 Mar 2008

The Kenyan government has today launched the IPO of Kenya’s largest cellco by subscribers, Safaricom, on the Nairobi Stock Exchange. The state is offering ten billion shares priced at KES5 (USD0.08), equivalent to 25% of the company’s total equity and nominally valuing it at KES200 billion. The sale will reduce the government’s holding to 35%, leaving the UK’s Vodafone as the largest shareholder with 40%.

Investment bank Morgan Stanley, advisors to the sale, have been forced to defend their valuation of Safaricom following allegations by opposition politicans that it had undervalued the cellco.Yesterday, Orange Democratic Movement (ODM) secretary-general Anyang’ Nyong’o called for a delay in the sell-off until Morgan Stanley’s figures had been scrutinised. Dr Nina Weiden, a senior officer at the bank, said the valuation was based on the value of other African mobile operators. ‘Ours is a global firm with a reputation to maintain and there would be no reason for us to short value Safaricom,’ she said, adding that the valuation report would not be made public as it was ‘confidential information only accessible to Treasury and the Privatisation Commission’.

Kenya, Safaricom