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By George Obulutsa and Wangui Kanina
NAIROBI, May 7 (Reuters) - Foreign investors buying Kenya's Safaricom [SCOM.NR] stock will pay a 0.5 shilling premium per share over the 5 Kenya shillings ($0.08) that domestic investors will be paying, the government announced on Wednesday.
"This represents a 10 percent premium to the local offering price, an unprecedented structure and premium level when compared to past transactions around the world," Kenya's privatisation commission said in a statement.
The offering generated over $1.25 billion in bids from established institutional investors, the commission said.
"The IPO has far exceeded the goals laid out at the launch of this process, namely, deepening Kenya's capital markets, maximizing revenues for the Treasury and increasing international investor interest in the Nairobi Stock Exchange," it said.
The government is selling a 25 percent stake in the mobile phone operator, one of Kenya's most profitable firms, and expects to earn at least 50 billion shillings from the IPO.
The offer is a gauge of investor confidence in Kenya after President Mwai Kibaki's disputed December re-election, which triggered ethnic clashes that killed at least 1,200 people, left 350,000 homeless and damaged the tourism and transport sectors.
Local investors have been allocated 65 percent of the 10 billion shares on offer and thousands applied.
"With regard to the local tranche of the transaction, initial indications suggest that more than 750,000 applicants participated in the IPO generating almost 115 billion shillings in local demand," the statement said.
The government has a provision to take back up to 15 percent of the 35 percent offered to international investors and give it to local buyers if the local offer is oversubscribed by more than 200 percent.
Final results in the local pool will be known only over the next few weeks once the application processing is finished. Preliminary figures show that the local investors have oversubscribed the share offer by close to 254 percent.
Should international investors get their entire 35 percent and locals the rest, Safaricom will be valued at 207 billion shillings ($3.36 billion).
The privatisation commission said once completed, Safaricom will be the largest IPO in sub-Saharan Africa, overshadowing those of South Africa's financial services firm Sanlam <SLMJ.J>, and Telkom S.A <TKGJ.J>.
Safaricom has more than 9.5 million subscribers or about 80 percent of current subscribers in the nation with a population of 36 million.
Britain's Vodafone <VOD.L> owns 40 percent of Safaricom, while the government owns the rest. After the IPO, the government will own 35 percent. (Editing by Stephen Weeks) (For full Reuters Africa coverage and to have your say on the top issues, visit: http://africa.reuters.com/)
