Mining and cement company Savannah Clinker Limited (SCL) has filed a sweet counter-offer bid for the full acquisition of Bamburi Cement Plc. The deal for the acquisition of 100 percent of the issued ordinary shares in Nairobi Securities Exchange-listed cement maker Bamburi PLC is subject to regulatory approvals.

According to disclosures, Savannah Clinker, a company that is wholly owned by businessman Benson Sande Ndeta is placing a Kes25.4 billion counter-offer, a deal that effectively outbids earlier one filed by Tanzania's Amsons Group.

“I am pleased to present this competing offer, which represents a patriotic commitment to secure Kenyan manufacturing interests now that an opportunity to exit a major multinational player is on the table,” Mr Ndeta said.

He added, “I have been involved in the local business and construction industrial sector for the last two decades. I have served as a former non-executive chairperson at the East African Portland Cement and a former majority shareholder at Savannah Cement until November 2022. I am therefore committed to investing in the growth of Bamburi Cement through this acquisition bid and an even larger capital expenditure outlay to accelerate modernization and operating efficiency programmes.”

This counter-offer, which comes with a Kes1.8 billion sweetener for all shareholders, effectively outpaces the $180 million or Kes23 billion offer that was placed by a Tanzanian conglomerate, Amsons Group, seeking to acquire cement giant Bamburi.

Instructively, by making an offer for the entire company and pegging success at 60% of the shares, Savannah Clinker has effectively challenged Amsons position that its transaction with Holcim, the Swiss multinational that owns the lions stake in Bamburi.

SCL’s bid further implies that it offers attractive tax benefits to the government as the cement maker's dividends will not be expatriated or converted to foreign currency if the purchase plan goes through.

By placing the improved counter-offer bid on the table, Savannah Clinker will seek to exit Holcim, while offering a premium to acquire minority equity stakes, the company said in a statement.

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Pay all shareholders

Additionally, SCL has indicated that it will immediately pay all shareholders after the transaction closes no later than February 28th 2025, compared to a long stop date of November 28 2025, issued in the Amsons offer. This time difference represents a close to 15 percent uplift of the offer price, the company explained.

In the sweet offer that now places Savannah Clinker in a pole position in this deal, the firm has topped up Amsons Group’s Kes65 per share offer with a Kes5 cherry on top of the cake. The firm is offering to snap up the 362,959,275 Bamburi-issued shares for a Kes70 cash consideration payable almost immediately.

According to the Capital Markets Authority (CMA) and an intention to acquire notice served on Bamburi Plc, Savannah Clinker’s competing offer seeks to counter the Amsons Industries (K) Ltd Notice of Intention, issued on July 10, 2024.

While confirming the counter-offer development, Savannah Clinker Executive Chairman and Director Mr Benson Ndeta said the firm is now moving to complete its Competing Offer Document in strict compliance with regulatory requirements for the consideration of Bamburi Cement shareholders.

Mr Ndeta added that the firm will actively engage Holcim and the minority shareholders seeking to win their acceptance.

Additionally, Savannah Clinker will also seek to retain this critical company listed, with up to 40 percent of its shares available as a free float to institutional and local investors.

At Kes70, the competing offer price represents a 53.34 percent premium as of July 9 2024, the day prior to the date of Notice of Intention to make a Take-Over Offer was made by Amsons Industries (K) Limited.

It also represents a 64.55 percent premium over the 30-day volume-weighted average price (VWAP) of Kes42.54 per ordinary share, a premium of 56.91 percent over the 90-day VWAP of Kes44.61 per ordinary share, and a premium of 79.62 percent over the 180-day VWAP of KES 38.97 per ordinary share.

Subject to meeting the minimum acceptance threshold set at 60 percent, Mr Ndeta noted taht he does not intend to de-list Bamburi from the NSE.

“However, should the Competing Offeror achieve acceptances of 90 percent or more of the Offer Shares, the Savannah Clinker shall, by the Take-Over 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, with the provisions of the Companies Act, 2015 applying,” he said.

Savannah Clinker, he added, aims to ensure sustained Bamburi Cement business at the close of the competing offer period by maintaining the existing contractual and statutory employment rights, including in relation to pensions of all Bamburi employees, which will remain in force in accordance with the applicable laws.

"Savannah Clinker attaches great importance to the reputation, expertise and experience of Bamburi’s existing management and employees. Therefore, the Competing Offeror intends to provide avenues for employee growth, advancement and retention for the Kenyan employees of Bamburi.”

Established in 2019, Savannah Clinker is a mining, manufacturing, processing, packaging, marketing, and cement company. Currently, the firm is developing a limestone extraction and clinker processing plant in Kitui County.

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