Bamburi Cement confirms Sh25b bid from Savannah Clinker

Bamburi Cement has confirmed receipt of a Sh25.4 billion bid from Savannah Clinker to acquire its entire shareholding.

Savannah Clinker, a Kenyan firm, has set out to improve the position of Bamburi Cement shareholders with an offer above the $180 million (Sh23 billion) offer recently placed by a Tanzanian conglomerate, Amsons Group, which is also seeking to acquire the entire Bamburi equity stake.

The offer is subject to regulatory approval by the Capital Markets Authority.

Savannah is offering to snap up the 362,959,275 Bamburi-issued shares for a Sh70 cash consideration payable by the end of February 2025, improving on the end of November 2025 long-stop timeframe offered by the Tanzanian bidder. 

At Sh70, the competing offer price represents a 53.34 per cent premium as of July 9 2024, the day prior to the date of notice of intention to make a takeover offer made by Amsons.

Savannah Clinker executive chairman Benson Ndeta confirmed that the firm had served Bamburi Cement with a detailed Competing Offeror’s Document.

Also, Savannah Clinker will seek to retain the listing of Bamburi on the Nairobi Securities Exchange, with up to 40 per cent of its shares available as a free float to institutional and local investors. 

“Savannah Clinker has provided binding financial guarantees to its transaction advisor, Faida Investment Bank, from an international, professionally regulated firm. This confirmation provided to Faida Investment Bank indicates the availability of funds for direct payment to shareholders,” Ndeta said as part of the regulatory disclosures.

“The competing offeror’s statement provides that the transaction advisor, Faida Investment Bank Ltd, has received a letter confirming that they act for the investor, the investor is in receipt of sufficient funding for this specific transaction, and that the funding is free and unencumbered.”

Subject to meeting the minimum acceptance threshold set at 60 per cent, Savannah Clinker, Ndeta disclosed does not intend to de-list Bamburi from the NSE.

“However, should the Competing Offeror achieve acceptances of 90 per cent or more of the offer shares, Savannah Clinker shall, by the Takeover Regulations, offer the remaining shareholders a consideration that is equal to the prevailing market price of the voting shares or the price offered to the other shareholders of Bamburi, whichever is higher,” said Ndeta.

Earlier before the Savannah offer, Bamburi Cement said its major shareholders had backed the offer from Amsons.

A notice from the firm on July 26 said Holcim, the Swiss-based global building material and aggregates company, had agreed to sell its entire stake in Bamburi Cement to Amsons Industries.

It said the two largest shareholders of the cement maker had earlier that month agreed to sell their shareholding to Amsons Group, the Tanzanian manufacturing and energy giant.

Holcim 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.

Bamburi is a leader in the local and regional cement industry.

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.

Its cement operations include a 6,000 tonnes per day facility and the recently acquired Mbeya Cement in Tanzania.

“We have great plans to deepen our investment in Kenya and Bamburi,” said Amsons Group Managing Director Edha Nahdi in a statement when the firm announced the offer.

“The proposed cross-border acquisition will further strengthen our position in the East African cement sector as part of our regional economic development and market integration strategy.”