Standard Investment Bank (SIB) has become the first major analyst to publicly validate the KES 9.00 per share valuation of Kenya Pipeline Company (KPC) proposed by the Lead Transaction Advisor, marking a key moment in the ongoing transaction process.
In its valuation analysis, SIB concludes that the KES 9.00 offer price broadly reflects KPC’s fair value, based on a combination of earnings multiples, asset-based metrics, dividend capacity, and discounted cashflow assessments.
Blended valuation supports offer price
SIB places Kenya Pipeline’s blended fair value at KES 8.23 per share, within a valuation range of KES 7.14 to KES 10.50. This blended estimate incorporates multiple valuation methodologies and suggests that the proposed offer price sits comfortably within reasonable market bounds.
According to the firm, the KES 9.00 price has already priced in the company’s current fundamentals, growth outlook, and risk profile.
Mixed signals across valuation metrics
From a multiples perspective, SIB’s analysis shows varying implied values depending on the metric applied:
- Price-to-Earnings (P/E): KES 6.39 per share
- Price-to-Book (P/B): KES 10.83 per share
- EV/EBITDA: KES 7.98 per share
The dispersion reflects Kenya Pipeline’s unique capital structure, asset base, and earnings characteristics, particularly the heavy weighting of regulated infrastructure assets and long-term throughput contracts.
Dividend valuation points to conservative downside
Using dividend-based valuation models, SIB estimates Kenya Pipeline’s fair value at KES 7.19 per share, with a range of KES 5.39 to KES 10.10. This approach reflects expectations around distributable cash flows, payout sustainability, and policy risk.
While the dividend model produces a lower central estimate, SIB notes that the upper end of the range remains consistent with the proposed offer price under favorable operating assumptions.
Cashflow analysis aligns closely with KES 9
Notably, SIB’s discounted cashflow (DCF) analysis delivers one of the strongest validations of the offer price, placing fair value at KES 8.92 per share, with a wide valuation band of KES 6.38 to KES 15.12.
The DCF outcome suggests that under base-case assumptions, the KES 9.00 price closely matches intrinsic value, particularly when factoring in long-term infrastructure cashflows and operational stability.
A turning point in the valuation debate
SIB’s findings mark the first time an independent investment firm has publicly concluded that the KES 9.00 valuation fully reflects Kenya Pipeline’s fair value, lending analytical credibility to the Lead Transaction Advisor’s pricing.
As discussions around the transaction continue, the analysis is likely to influence shareholder sentiment, policy debate, and broader market perception of state-linked infrastructure asset valuations.
