State-owned pension fund Public Investment Corporation (PIC) will sell 1.7% stake in South Africa’s largest mobile phone operator by subscribers Vodacom Group, a deal that could be worth more than R3.5 billion.
The PIC has appointed Deutsche Bank AG, London Branch as sole bookrunner to sell 25 million ordinary shares in Vodacom Group, representing about 1.7% of the company’s issued share capital, the PIC said in a JSE filing on Tuesday.
Vodacom shares closed at R139 on Monday and selling 25 million shares at yesterday’s closing price will translate to R3,48 billion.
“This placement is in relation to a hedging activity in respect of certain risk mitigation arrangements entered into by Merrill Lynch International with the Government Employees Pension Fund (GEPF),” the PIC said.
The PIC manages more than R1.5-trillion in assets on behalf of the GEPF, and owns 16.91% in Vodacom competitor MTN Group – Africa and Middle East biggest mobile phone operator.
Subsequent to this transaction, PIC has agreed to a lock-up of 60 days on its remaining stake.
Earlier this month, the PIC increased its exposure in Vodacom by buying the Government of South Africa’s 13.91% equity stake.
The stake was acquired through the PIC’s participation in the engagement process that National Treasury ran with various financial institutions and managed to agree on the sale with PIC.
“We are proud to have acquired these shares on behalf of the GEPF and believe that more benefit will be derived from this investment. Vodacom is a well-managed blue-chip South African company with credible exposure in the rest of Africa and strongly underpinned by its corporate governance practices,” the PIC CEO Daniel Matjila, said at the time.
The PIC has been a long-term investor in Vodacom and looks forward to a continued fruitful relationship with the company.
Shares of Vodacom are still up 9.54% so far this year, buoyed by decent performance by the mobile phone operator.