Sports-Betting Firm Tied to Arsenal Weighs Kenyan IPO

(Bloomberg) -- SportPesa Ltd., an online-betting company with operations in Africa and the U.K., plans to list on the Nairobi Securities Exchange in the first quarter of next year, according to two people familiar with the matter.

The firm, with 100 billion shillings ($1 billion) of annual revenue, may rank among the 10 biggest companies on the exchange if the IPO goes ahead, said one of the people. Both asked not to be identified because the information is private. The listing would be the first in Nairobi since August 2016, when clothing retailer Deacons East Africa Plc began trading.

“It’s one of the few oases right now in what has become quite a desert when you think about the Nairobi Securities Exchange,” Aly-Khan Satchu, chief executive officer at Nairobi-based Rich Management Ltd., said by phone. “People had dumped the NSE and ran as far away as they could,” he said.

There have been 21 listings on the stock exchange since 2006, according to the Capital Markets Authority statistical bulletin. Thirteen of these companies, including state-owned power producer Kenya Electricity Generating Co PLC., are trading below their reference price, while the stock of seven companies are below two shillings, according to data compiled by Bloomberg.

Chasing Profit

“The last time investors came to the market was during the Safaricom Plc. and KenGen initial public offerings,” Satchu said. “The NSE needs something people can get into and make a profit from.”

Isle of Man-registered SportPesa appointed Nairobi-based Kestrel Capital East Africa Ltd. as transaction advisers for the IPO, the people said. Kestrel Executive Director Andre DeSimone declined to comment when contacted by phone on Wednesday.

“SportPesa is a privately owned company and is constantly exploring opportunities that will create value for our stakeholders,” the company said in an emailed response to questions on Wednesday. “As and when appropriate, we will communicate with each of our stakeholders.”

SportPesa has a three-year, multi-million pound sponsorship deal with English soccer team Hull City and a five-year sponsorship agreement with Everton Football club, according to its website. The gaming company is also Arsenal Football Club’s Africa betting partner, it said.

©2018 Bloomberg L.P.