British telecom major Vodafone Group Plc (VOD, VOD.L) announced Monday that its unit Vodafone International Holdings B.V., has agreed to transfer part of its indirect shareholding in Safaricom Limited to Vodacom Group Limited, its sub-Saharan African subsidiary. The implied share subscription and set-off ratio for the number of new Vodacom Group shares to be issued, in respect of 87,5% of the 39,93% Safaricom shares held by Vodafone Kenya, is equivalent to 1.62 new Vodacom Group shares (cum dividend) for every 100 shares in Safaricom held by Vodafone Kenya. Vodacom shares are up 0.1% year-to-date, while Safaricom shares are up 5.7%.
The transaction is set to further enhance Vodacom as a leading African mobile communication company.
Ownership of Safaricom is now split between the government of Kenya (35%), Vodafone Kenya (39.93%), public investors (25%) and Safaricom employees (0.07%), so once the acquisition is finalised, Vodacom, with 65 percent of its own company owned by Vodafone International, would become a majority stakeholder.
"This is an exciting occasion for Vodacom and a unique opportunity to diversify our revenue growth and profitability". Vodafone will subscribe for new Vodacom shares, and its interest in Vodacom will rise to 70% from 65% now.
Safaricom is the market leader in Kenya with 71 per cent of the country's subscribers, and is under pressure from lawmakers and regulators who are debating ways to break its dominant position in the market.
"Vodacom Group sees scope to create further value through closer cooperation between both companies, including replication of Safaricom's success in M-Pesa in Vodacom Group's other territories".
Wall's 3-pointer downs Celtics, forces a Game 7
Wall's late-game heroics erased a struggling first half performance - the All-Star point guard had just three points at halftime. Bradley Beal is scoring 24.3 points on 18 shots per game at Verizon Center and just 19 points on 17.7 shots at TD Garden.
Altoona native ready to compete in Miss USA Competition
The broadcast will also include a performance from a Cirque du Soleil show based on Michael Jackson songs. Fifty-one women will participate in the decades-old competition airing live at 8 p.m.
Mummies Unearthed In Egypt
The discovery was made in the village of Tuna el-Gabal, which is a popular archeological site on the edge of western desert. Egypt's economy has taken a major hit since the 2011 Arab spring uprising, significantly reducing tourism revenue.
The agreement has been reached amid simmering debate over proposed separation of the globally successful M-Pesa from Safaricom.
A representative for Vodafone declined to comment.
Based on Friday's JSE closing price of R152.49 per Vodacom share, this values the proposed transaction at R34.6 billion.
Vodacom also said Monday that full-year earnings per share excluding one-time items increased 4.5 per cent to 9.23 rand, broadly in line with estimates. The company's EBITDA increased in the period under review, to ZAR31.238 billion (up by 2.9% y-o-y), while net profit grew 1.7% to ZAR13.126 billion (ZAR12.910 billion in FY2015/16).
The company raised three-year targets for service revenue to mid-single digit per cent growth from low-to-mid single digits and earnings before interest and taxes to a mid-to-high single digit increase.