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Kiharu MP Ndindi Nyoro has accepted Treasury CS John Mbadi’s challenge for a televised debate over the government’s planned sale of a 15% Safaricom stake, warning that the deal risks undervaluing the company and urging more strategic valuation to protect public funds. Nyoro, drawing on his experience as a...

22,111 Aufrufe • vor 8 Monaten •via X (Twitter)

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National Treasury CS has appeared before the National Assembly's Finance & Planning Committee explaining why GOK's choice path for divestiture of its 15.0% stake in Safaricom Plc is to Vodafone Kenya & not any other investor (see quoted tweet). He makes a few points: · GOK feared that opening the transaction to competitive bidding presented valuation risk. The concern was that suppose the open market process yielded bids that were priced lower than Vodafone Kenya's Kes 34/share, it would create challenges in walking back to Vodafone Kenya scouting for premium valuation · He argues that opting for a private equity entity presented the challenge of onboarding a risk averse shareholder who will not understand the business & be unwilling to pay a premium. It's an interesting argument given GOK's history/experience with Helios on Telkom Kenya · Selling to minority shareholders was not an option on the table given fears of a discount to the market price. GOK argues that going the minority shareholders route would necessitate underwriting as part of the deal, something the state wasn't ready for · GOK was also worried that potentially taking the 15.0% stake to market in close proximity to listing Kenya Pipeline would 'saturate' the market & necessitate underwriting · The liquidity question loomed large & GOK was worried about inability to secure an investor willing & able to plough in the US$1.909 billion (Kes 244.5 billion) to consummate the transaction · GOK argues that an existing shareholder enjoys incumbency & is therefore already has familiarity with the business hence presenting a strong case for continuity

Julians Amboko

50,900 Aufrufe • vor 7 Monaten