Merali was not happy with the South Africans and by virtue of the fact that he owned 40 per cent of Kencell he had pre-emptive rights to buy the shares from Vivendi. But he couldnât raise the Sh18 billion MTN was willing to pay for Vivendiâs shares in Kencell.
Somehow, he got into an arrangement with Mo Ibrahim who owned Celtel, got a loan and acquired Vivendiâs shares at Sh400 million more than what MTN had offered. He paid Sh18.4 billion ($230 million)â calculated at then dollar price of Sh80 at around 7.00pm of the material date. He now owned 100 per cent of the company.
But as he was finalising the deal with Vivendi, the Celtel group was waiting in another room. After buying the shares, Merali and his team rushed to meet the Celtel team led by Mo Ibrahim for another round of negotiation.
According to past reports, two hours after sealing the Vivendi deal-at around 9 pm to be precise, Merali sold the shares to Celtel for Sh20 billion coming out with a cool Sh1.6 billion profit.
Such is the genius of Merali, the man variously referred to as Kenyaâs Donald Trump-because of his business acumen that many have likened to the US investment mogulâs style.
"He rarely makes business mistakes," says the investment banker.
"The lesson corporate Kenya should learn from his past dealings is that when you see Merali selling, there could be fire on the mountain. Youâd probably be advised to think twice before you buy because those whoâve bought from him in the past did not succeed with those businesses."
He gives the example of Eveready batteries where a firm associated with Merali reduced their stake from 51 per cent to 35.1 per cent during the firmâs Initial Public Offer (IPO) about five years ago.
The battery maker was profitable by the time of the issue. From a modest profit of Sh186 million ahead of the November 2006 IPO, the company returned a loss of Sh54 million after-tax in the six months ending March 2007 to dim investors hopes.
Today, that kind of profit level for Eveready has all but turned into a mirage as the firm reportedly mulls over sustainability of its operations.