3 major reasons why Ndindi Nyoro is opposing Sh244 billion Safaricom shares deal

Kiharu MP Ndindi Nyoro has criticised the government’s proposed divestiture of its 15% stake in Safaricom PLC, terming the deal "grossly undervalued" and a potential "blank cheque" for the buyer.

Vodafone Kenya is set to acquire 15% of Safaricom PLC from the Government of Kenya at Sh34 per share, in a deal worth about Sh204 billion. The government will also receive Sh40.2 billion upfront for future dividends on its remaining 20% stake.

In a comprehensive memorandum submitted during the public participation session, the vocal legislator and former Budget and Appropriations Committee Chair raised a red flag over what he described as "incompetent negotiations" that could see taxpayers lose billions of shillings.

Nyoro’s primary grievance centers on the government’s reliance on the Nairobi Securities Exchange (NSE) share price to value the telecommunications giant. 

He argued that the stock market has been bearish for a long time, leading many blue-chip companies to trade far below their intrinsic value.

"Basing valuation on the stock market is incorrect and naïve," Nyoro stated. 

To bolster his point, he highlighted that in 2021, before Safaricom’s massive investment in Ethiopia, the share price was Sh45, valuing the company at over Sh1.8 Trillion. 

With Ethiopia now nearing an operational break-even point, he argues the true valuation should exceed Sh2.5 Trillion.

The MP pointed to a significant disparity in the Price-to-Earnings (P/E) ratios between Safaricom and its global peers. 

He noted that while Safaricom’s price to earnings (P/E) ratio sits at approximately 16.1, regional and international competitors enjoy much higher valuations.

The P/E ratio shows how much investors are willing to pay for every shilling of a company’s earnings.

According to the MP, the government is relying too much on Safaricom’s current share price, even though the stock market has been struggling for a long time. When markets are down, he argues, good companies often look cheaper on paper than they really are.

"Safaricom is undervalued by half at the current price," Nyoro noted, adding that the company is "more diversified and solid" than its peers.

In a move that is likely to stir the Capital Markets Authority (CMA), Nyoro alleged that the share price may have been "artificially suppressed." 

He cited a "recent immobilisation of 16 billion Safaricom shares by the buyer in June 2025," which he claims sent a signal of oversupply to the market to keep prices low in readiness for the transaction.

He further criticised the lack of a competitive bidding process, arguing that the "insider" buyer holds an undue advantage due to information asymmetry.

"How do you arrive at that shareholder in a public company where the right of first refusal doctrine is not exercised? Was there a competitive process? Competitive bidding would definitely unlock value," he posed.

Instead of a "rush sale" at a discount, the Kiharu MP proposed three alternative routes to extract maximum value for Kenyans:

• Disentangle Safaricom into three distinct entities, that is Telco, Financial Services (M-Pesa), and Towers Business. He argued the sum of these parts would be worth much more than the current whole.

• List Safaricom on a mature market like the London Stock Exchange (LSE) to gain global visibility.

• Open a transparent, international bidding process after the listing to find the highest bidder.

The memorandum comes as the joint Committee of Finance & National Planning and Public Debt & Privatisation on the Proposed sale of GoK's 15% stake in Safaricom is set to wrap up the public participation phase. 

While Treasury CS John Mbadi has previously defended the Sh34 per share price as a fair premium over the market average, Nyoro’s detailed dissent is expected to lead to a heated debate when the matter reaches the floor of the House.