UPDATE 2-Foreigners to pay 10 pct premium for Safaricom

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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.