Key Milestones and Requirements for Safaricom Transaction
Transaction summary
Overview
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Vodafone currently holds a 40% interest in Safaricom through a wholly-owned subsidiary, Vodafone Kenya Ltd ('VKL')
Vodacom has agreed to acquire an 87.5% interest in VKL, representing a 35% interest in Safaricom
1.62x Vodacom shares per 100 Safaricom shares¹, representing:
Valuation
Consideration
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(5.9)% discount vs 1.72x closing price as of 12 May 2017
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(4.8)% discount vs 1.70x 1m VWAP
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(0.6)% discount vs 1.63x 6m VWAP
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The exchange ratio implies a valuation for Safaricom:
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7.5x EV/FY17 EBITDA
11.3x EV/FY17 OpFCF
5.7% FY17 LFCF yield
Share swap transaction - issue of new Vodacom Group Limited shares
Vodacom will issue 227m new shares, resulting in total issued shares of 1 715m²
Financial
effects
Approvals and
governance
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Vodacom's 35% stake in Safaricom will be equity accounted as an associate investment
Slightly HEPS accretive (excluding the effects of amortisation on intangibles on acquisition) based on FY17 results
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Transaction is subject to shareholder approval (excl Vodafone) and a general meeting will be held on 15 August 2017
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Vodacom will be entitled to appoint 3 directors to the board
1 Shares issued to be adjusted for any Safaricom or Vodacom distributions between signing and closing.
2 Including shares held in treasury.
3View entire presentation