Yebo for ev­ery­one

But com­par­isons to MTN Asonge scheme un­fair

Finweek English Edition - - Openers - BENE­DICT KELLY benk@fin­

WHILE an­a­lysts may be quib­bling about whether Vo­da­com’s Ye­boYetho deal con­sti­tutes bet­ter or worse value than other black eco­nomic em­pow­er­ment of­fer­ings, the con­sen­sus seems to be the deal of­fers a good op­por­tu­nity to gain ac­cess to the com­pany. In line with sim­i­lar of­fers from MTN and (more re­cently) Sa­sol, Vo­da­com is of­fer­ing around R360m of shares in a hold­ing com­pany – Ye­boYethu – to its busi­ness part­ners and SA’s black pop­u­la­tion.

Speak­ing at the an­nounce­ment last week, out­go­ing Vo­da­com CEO Alan Knot­tCraig com­mented the var­i­ous par­ties had ne­go­ti­ated the of­fer’s pric­ing over the three years that the deal had been in the works.

Kulekani Dlamini, an­a­lyst at Re­nais- sance Spe­cial­ist Fund Man­agers, says the R120bn val­u­a­tion placed on Vo­da­com’s SA op­er­a­tions is some­thing of a best guess as there’s no mar­ket value for Vo­da­com. How­ever, he says given the lower growth ex­pec­ta­tions for Vo­da­com com­pared to MTN in the SA mar­ket, the deal is priced at a pre­mium to MTN’s Asonge share scheme last year. But Dlamini says just be­cause it’s priced at a pre­mium doesn’t mean it’s not a good deal.

Palavi Am­bekar, port­fo­lio man­ager at Coro­na­tion Fund Man­agers, says a com­par­i­son be­tween the Asonke scheme and Vo­da­com’s Ye­boYethu deal is not nec­es­sar­ily fair. That’s be­cause the Asonge scheme wasn’t ini­ti­ated but a straight sale of ex­ist- ing shares at a dis­count from the Na­tional Em­pow­er­ment Fund. The Ye­boYethu deal is an is­sue of shares in a new com­pany by Vo­da­com, with its fund­ing pro­vided by Vo­da­com.

The Ye­boYethu deal al­lows black South Africans to buy shares in Vo­da­com’s SA sub­sidiary at a price of R25 each, with the min­i­mum be­ing 100 shares and the max­i­mum 1,44m shares.

Am­bekar says the fund­ing of the deal by Vo­da­com will give the small­est in­vestors (those who have put up R2 500) more than R15 000 of ex­po­sure to Vo­da­com SA.

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