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Get in line to buy a share of Vodacom

By unknown | Jul 30, 2008 | COMMENTS [ 0 ]

Zweli Mokgata

Zweli Mokgata

Ordinary people can now own a piece of the country's largest cellular operator following Vodacom's announcement yesterday of a public offering open to black citizens beginning today.

Vodacom Group confirmed that it would be making 14,4million shares of Vodacom South Africa available to the public in its YeboYethu offer.

The group hopes to rake in R900million from the allocation of R7,5billion worth of the company's local operations in a broad-based black economic empowerment transaction.

"Our scorecard was good before, but we scored poorly on equity. The most significant thing about this was that our staff will be able to participate, and it will be good to have customers as shareholders," said Vodacom's outgoing chief executive Alan Knott-Craig.

Investors will receive dividends from at least 50 percent of the company's profits. An initial five-year lock in period will be in effect for all public participants. Over the following five years, investors can sell only to approved black shareholders.

After 2018, there will be no restriction on the trading of the shares.

Slight speculation began to spread after the announcement yesterday, that the shares were overpriced compared to MTN's offer.

But most analysts expected the share to be as popular as the recent Sasol Inzalo public share offer.

Khulekani Dlamini, of Renaissance Fund Managers, said: "There is no ruling price. You'd have to look at the value of the fixed line business and work it out."

When MTN announced its Asonge share scheme, it sold its shares for R73,84 per share at a time when they were trading at about R107 on the open market.

Vodacom has priced each share at R25. While it is cheaper than the Asonge shares, MTN was selling shares in the entire group, not just local operations.

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