The Capital Markets Authority (CMA) requires all companies floating shares for the first time to offload at least 25 percent of their shareholding. But Safaricom owners (the State, Vodafon, and a ‘ghost shareholder’) only want to float 9% of the East Africa’s most profitable company. In that regard, the state is in a tight dilemma. Should it
(a) push CMA to accepting a 9% floatation, or
(b) negate from the IPO altogether, or
(c) let go 25% of Safaricom.
I say they let go 25% of Safaricom. However, some government officials have argued that 25% floatation is too large for the public to swallow. But i bet Kenyans would easily oversubsribe the so-called Mother of All IPOs.
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If it is open to foreigners - I think the IPO should allow ONLY Kenyans - then not a problem.
At 8.4 Billion (PAT)x 15 (P/E) x 25% = KES 31.5 Billion = $425 Million.
This is a small to mid-size deal by USA/Japan standards.
For Kenya... CMA allows for gradual sale e.g. 10% in 2006 then 10% every year thereafter until 40% is sold.
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