Amsons woos shareholders as it steps up Sh23.5b Bamburi buyout bid

Amsons Group, the Tanzanian business conglomerate, has started its marketing campaign to secure the support of Bamburi Cement shareholders following the release of a shareholder circular on Tuesday.

Through its Kenyan subsidiary and investment vehicle, Amsons Industries (K) Ltd, Amsons intends to invest more than Sh23.5 billion to acquire up to 100 per cent of Bamburi shares at Sh65 per share.

The offer is backed by KCB Bank and secured by a $5.3 million (Sh683.7 million) break fee held in an escrow account at Absa Bank Kenya.

Amsons is battling for the cement maker with Kenyan firm Savannah Clinker, which has offered a rival bid of Sh75.50 per share.

According to a shareholders’ circular issued by Bamburi Cement on October 25, the acquisition offers from both firms opened for acceptance on October 25, 2024 and will run until December 5, 2024, with shareholders choosing to sell to either Amsons or Savannah.

“Shareholders must accept only one of the two offers: if any shareholder accepts both offers, both acceptances will be rejected,” said Bamburi’s board of directors in the circular.

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).

Amsons Group Managing Director Edha Nahdi said the company’s offer price represents a 42.4 per cent premium on the closing market price of Bamburi shares on the reference date and a 52.94 per cent premium to the 30-trading day volume weighted average price of Bamburi shares from the reference date.

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

While describing Amsons’ offer as robust—based on Bamburi Cement’s underlying value and guaranteed financial underwriting by KCB Bank Kenya—Mr Nahdi also said the firm is keen to foster bilateral relations between Kenya and Tanzania with the $180 million (Sh23.5 billion) investment bid.

As part of the acquisition bid, the firm will engage Bamburi shareholders to explain Amsons’ offer in the coming days.

As of 31 December 2023, regulatory filings indicated that the Bamburi Cement register features 3,954 local individuals holding a 4.3 per cent stake, 557 local institutions holding a 33.56 per cent stake, and others.

“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,” Mr Nahdi said.

“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.”

“Beyond the acquisition offer, we are also  exploring a medium-term investment commitment in Foreign Direct Investments (FDI) to modernize Bamburi Cement’s grinding and clinkerisation plants.”

“With the support of Kenya and Tanzania’s presidents, the foremost Tanzania-Kenya investment advocates, we are betting big on the Kenyan market in a shared prosperity model,” Mr Nahdi said.

Amsons Group is a family-owned business founded in 2006 in Tanzania. Its primary business operations historically involved bulk oil and petroleum products importation under the Camel Oil Tanzania retail brand.

The company produces cement products under the brand names Camel Cement and Tembo Cement.