Savannah ups offer in fight for Bamburi with Tanzania firm

Savannah Clinker has upped its offer to Bamburi Cement’s shareholders by about 9.4 per cent as it seeks to outdo Tanzania’s Amsons Group.

Amsons first approached the owners of the cement maker and bid to buy the entire shareholding in July this year. Savannah Clinker, owned by businessman Benson Ndeta – who is also associated with troubled Savannah Cement but says he is in the process of exiting as director of Savannah Cement -is now ready to offer the owners of Bamburi Sh76.55 per share, which is higher than the Sh70 per share the firm had offered in its first bid in August.

This translates into Sh27.7 billion for the firm’s 362.96 million issued shares, which is Sh2.38 billion more than the Sh25.4 billion it had earlier made in its competing offer.

Amsons had offered to buy Bamburi at Sh65 per share or Sh23.59 billion for the entire stake. While the Tanzanian firm has not increased its offer, it has said it will pay a total of Sh690 million “break-up fee” to Bamburi’s shareholders willing to accept its offer. Both offers are a premium on the current share price. Bamburi’s shares are currently trading at Sh64 per share on the Nairobi Securities Exchange, having risen from Sh45 when Amsons Group announced its offer but rallied to Sh84 in September before easing and trading at Sh64 per share yesterday. 

Shareholders have until December 5 to accept one of the two offers. 

“Shareholders must accept only one of the two offers: if any shareholder accepts both offers, both acceptances will be rejected,” said Bamburi Cement in a shareholder circular yesterday. The firm also said the irrevocable undertaking that Bamburi Cement’s majority shareholders, Fincen and Kencem, had given to Amsons was terminated in early October. 

Holcim, the Swiss-based global building material and aggregates company, owns 58.6 per cent of Bamburi’s total issued share capital through Fincem Holding (29.3 per cent) and Kencem Holding Ltd (29.3 per cent).  Kenyan institutions and individuals own an estimated 32.17 per cent of Bamburi shares, while another 9.23 per cent is held by other foreign investors.

Following its July offer, Amsons said it had “received an irrevocable undertaking” from Fincem and Kencem, adding that “under the terms of the Undertaking, each of Fincem and Kencem has irrevocably undertaken to Amsons to… not solicit, entertain, negotiate or accept any offer to purchase the Subject Shares other than the Offer.”

In the statement on Thursday, Bamburi said the firms had mutually terminated the irrevocable undertaking. “According to Amsons offer document, on October 2, 2024, Amsons, Kencem and Fincem terminated the irrevocable undertaking and the break fee agreement by mutual agreement and on the same date entered into an escrow agreement with Absa Bank Kenya Ltd,” said Bamburi in its statement.

It also explained that Amsons had on July 10 received an irrevocable undertaking from the two key shareholders and the three firms had entered into a break fee agreement, “committing to pay $5.31 million (Sh690 million) to shareholders that accept the Amsons offer in any Break Fee Events occur.”

Amsons, a family-owned business founded in 2006, has diversified from its roots in bulk oil and petroleum products to become a manufacturing and energy conglomerate with over $1 billion (Sh130 billion) in annual revenue.

In a statement yesterday, the company said it has started its marketing campaign to secure the support of Bamburi Cement shareholders.

"We respect all the shareholders very much, and the engagements are meant to seek their support. During these sessions, we will candidly explain our offer and share details, including the break fee we are offering and our financial guarantees, as this bid is underwritten by Kenya’s largest financial solutions provider, KCB Group,” said Amsons Group managing director Edha Nahdi.

Amsons has partnered with KCB Investment Bank as its transaction adviser.

“Solid financial guarantees from reputable East African entities back our bid. We greatly respect Kenya’s capital markets, and our offer adheres to all applicable laws and regulations,” Nahdi said.

“Beyond the acquisition offer, we are also exploring a medium-term investment commitment in foreign direct investments to modernise Bamburi Cement’s grinding and clinkerisation plants," he added.