Kenyan banks have urged Parliament to amend the Treasury’s agreement to sell a 15% stake in Safaricom PLC to South Africa’s Vodacom Group. The Kenya Bankers Association (KBA) has recommended that a portion of the shares be reserved for public sale, arguing that this would broaden ownership of the telecommunications giant and deepen the capital markets.
The National Treasury recently entered into an agreement with Vodacom to sell 6 billion Safaricom shares, equivalent to a 15% stake, to Vodacom, at KES 34 per share, translating to an aggregate of KES 204.3 billion. While supporting the divestiture in principle, the KBA has proposed that 5% of the shares being sold, which is 300.4 million shares, be offered to the general public. This would leave the remaining 5.7 billion shares to be purchased by Vodacom as originally planned. The bankers emphasized that such a move would enhance public participation in a key national asset and increase the free float of Safaricom shares on the Nairobi Securities Exchange (NSE).
Currently, only 25% of Safaricom’s shares are freely traded. The majority 75% is held by the Kenyan government (35%), Vodafone Kenya (39.9%), and other entities.
“By placing more Safaricom shares in free float and aligning a major portion with a strategic investor like Vodacom, the NSE stands to benefit from higher liquidity and deeper market participation,” stated KBA CEO Raimond Molenje.
Based on the negotiated price of KES 34 per share which is a premium to Thursday’s closing price of KES 29.7, a public offer of 300.4 million shares would be valued at approximately KES 10.2 billion. Such a block offering would likely attract institutional investors seeking to acquire a large stake in a single transaction, though retail investors could still accumulate shares at lower prices on the open market.
Vodacom, which already holds a 35% interest in Safaricom, plans to acquire an additional 20% from the Kenyan government and a further 5% from Vodafone Group. This would bring its total stake to 55%, granting it controlling ownership. The South African multinational confirmed in a notice that the transaction remains flexible, stating that no irrevocable undertakings have been given and that the agreement is not yet final.
Under the current structure, the government stands to receive KES 204.3 billion from the share sale plus an upfront dividend payment of KES 40.2 billion on its residual 20% stake, bringing its total proceeds to KES 244.5 billion. Vodafone Group will receive KES 68.1 billion for the 5% stake sold to Vodacom.
While changes to large-scale negotiated deals are rare, the KBA’s proposal highlights a broader push to ensure that the divestiture of a strategic national asset also serves to widen public investment and strengthen Kenya’s equity market. The parliamentary committee is expected to review the submissions as part of its ongoing public hearings on the transaction.
Also Read: Vodacom Launches Bold Proposal to Acquire an Additional 15% Stake in Safaricom
