The Uphill Task of Selling Safaricom in Kenya

Mergers, Acquisitions and Financial Results

Handling the biggest Initial Public Offer in the country ever is no small task for the joint managing director and co-CEO of Dyer & Blair Investment Bank, Hassan Mohammed.

Perhaps nothing has stretched the limits of Mohammed's energies more than to bring together a team to prepare the prospectus for the Safaricom sale to the public. In fact, the prospectus itself has turned out to be rather controversial even before it was officially published.

The controversies have come not only from the politicians, but also from analysts and stock brokers - some of whom think that the IPO is being rushed. Indeed, the Association of Kenya Stockbrokers thinks that the IPO is best suited for the next calendar year and they have even written to the Treasury on the issue.

The vice-chair of the Nairobi Stock Exchange, James Wangunyu, has appeared to contradict the Government and even Dyer and Blair's chief executive who is also the NSE chair, Mr Jimnah Mbaru, over when the IPO should be done.

As the person squarely in charge of the company's day-to-day operations such as preparing IPO documents and representing Mr Mbaru in many forums, Mr Mohammed cannot but follow the public (and some not quite public) pronouncements closely.

Constantly engaged in meetings, you cannot easily find him for a one-to-one interview on the IPO, not to mention the fact that he is not supposed to be seen to be commenting on an issue he is yet to conclude.

Throughout the IPO period he maintained a "no comment" stance except when a representative of public relations firm Gina Din Communications - who are the PR consultant for the IPO- was present. The only thing he would say was that he was proud to be associated with the largest IPO in sub-Saharan Africa. "This will definitely go into my memoirs," he said of the sale.

Indeed, Mr Mohammed may have done his work quietly behind closed doors as expected with a public share sale but has no choice but to hear the noises and sometimes constructive suggestions made by his peers as well as rivals in the market place.

For example, Wangunyu has proposed that the IPO should actually be priced at below five shillings a share - a view that can only be ignored at the risk of being accused of making the IPO a rich-man's affair. This may surely be out of perception as there are more factors at play including the minimum number of shares and therefore the required value of shares purchased.

But incidentally, perceptions in a controversial and emotional issue like Safaricom's IPO do matter for more than objective analysts would hope for. Mohammed rose to nearly the top of the investment bank's hierarchy last year when he was made the co-CEO at the relatively youthful age of 36. He holds a Bcom (Hons) from the University of Nairobi, MSc Finance from Strathclyde University in Glasgow and is pursuing chartered financial analyst's (CFA) qualifications.

He is no stranger to making deals. Indeed, he has been involved in deals worth over one billion dollars (over Sh63 billion) in the past decade having been the team leader on the Equity Bank listing, the Sony Sugar restructuring, among others. He was the KenGen IPO broker supervisor and steered the IPO to regulatory compliance as well as the IPO marketing strategy. The investment bank itself describes Mr Mohammed as "an innovative investment banker who has established new investment frontiers in East Africa."

The bank credits him with originating and executing the 2003 take-over of East African Cables by the Trans-Century Group. He also designed and structured the East African Cables convertible debt, which enabled the company acquire a Tanzanian subsidiary more than a year ago.

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