Investment bankers and lawyers who helped the National Treasury sell a 15% share in Safaricom to South Africa’s Vodacom Group will earn up to KSh 2.3 billion in fees. Treasury CS John Mbadi explained the sale of Safaricom shares. This represents an increase in advising earnings following increased deal-making in Kenya. Who will earn billions in the Safaricom sale? During a conference call, Business Daily reported that Vodacom executives informed analysts that the Safaricom share purchase deal will result in transaction costs of between 200 million rand (KSh 1.51 billion) and 300 million rand (KSh 2.27 billion), the majority of which will go toward stamp duty and brokerage fees. Vodacom revealed that Stanbic Bank and its investment banking subsidiary SBG Securities, along with the legal firms CDH Kenya (Cliffe Dekker Hofmeyr) and CMS Kenya, were among the advisers in the KSh 204 billion deal.
“Transaction costs are relatively low for a transaction of this size. They are in a range of 200 million rand KSh 1.51 billion) to 300 million rand (KSh 2.27 billion). It is a block trade in Kenya. So there are various fees that have to be paid, regulatory fees, etc. That is a large portion of that,” Vodacom Group’s financial controller Shaun Biljon stated. From over KSh 40 billion last year, the stated value of transactions such as rights issues, corporate bond issuances, block share transactions, and listings on the Nairobi Securities Exchange (NSE) has increased to roughly KSh 370 billion this year. As a result, deal advisers have received billions of shillings in fees. How many shares is Vodacom purchasing? The South African multinational is buying six billion Safaricom shares from the government at KSh 34 per unit.
This is besides paying Treasury an advance dividend of KSh 40.2 billion in exchange for future rights to KSh 55.7 billion in dividends that will accrue on the government’s remaining 20% shareholding. Safaricom CEO Peter Ndegwa. The government remains with a 20% stake. At the same time, Vodacom is paying KSh 34 per share to purchase a 5% stake in Safaricom, which is owned by its parent company, Vodafone Group. This will involve the purchase of 50 ordinary shares of Vodafone International Holdings, which will constitute a 12.5% ownership in Vodafone Kenya. Why is Treasury selling govt stake in Safaricom? Treasury Cabinet Secretary (CS) John Mbadi disclosed plans to raise more funds to finance the KSh 4.2 trillion 2025/2026 budget, as previously reported by TUKO.co.ke. The Budget and Appropriations Committee of the National Assembly recommended the transaction. The proposal to sell Safaricom’s shares was made following President William Ruto’s signing of the Privatisation Bill 2023 into law.
By Japhet Ruto
