Listed cement maker Bamburi Cement has received a second acquisition offer after Savannah Clinker Ltd. expressed interest to acquire the company at KSh 70 per share.
- Established in 2019, Savannah Clinker Ltd. is owned by Benson Sande Ndeta who previously served as the director of Savannah Cement – a company that was placed under administration in July 2023.
- The acquisition bid tabled by Savannah Clinker Ltd. is worth KSh 25.4 billion, outstripping an offer made last month by Tanzania’s Amsons Group, which was worth KSh 23.59 billion.
- Amsons Group, in their intention to acquire Bamburi Cement, sought to purchase all shares at KSh 65 – representing a 44% premium over Bamburi’s closing share price on July 10th.
Savannah Clinker has pledged to maintain Bamburi’s listing at the Nairobi Securities Exchange (NSE) “subject to meeting the minimum threshold set at 60%” and retain the company’s employees.
The first condition-the approval of the transfer of mining licenses- in Savannah Clinker’s offer is similar to the Amsons bid. The offer will also represent a 53.34% premium on the closing price of Bamburi’s shares on July 9th.
Other than price, other significant difference are the long stop dates for completion and the regulatory approvals: Amsons’ offer will remain open until November 2025 and requires approval from COMESA Competition Authority and the East African Competition Commission, while Savannah Clinker’s offer expires in February 2025 and requires approval by the Competition Authority of Kenya.
The first offeror, Amsons, has already received an irrevocable commitment from Bamburi’s majority shareholder, Holcim, which owns a combined 58.6% with a break fee of $5.3million plus interest.
The New Buyer
Savannah Clinker’s counter-bid has aroused considerable queries because a similar company its owner once had majority shares in, Savannah Cement, recently announced Expressions of Interest (EoI) for the sale of its assets after going into administration.
In 2017, Ndeta became the majority shareholder of Savannah Cement after the Competition Authority of Kenya approved a deal that increased his interest, held through two companies, to 74 percent. The sale followed the divestiture of private equity firm Quantum Global from Seruji, a Mauritius-based firm that owned 60% of Savannah Cement.
Ndeta divested from his shareholding in Savannah Cement in November 2022, just months before the company was dragged in court for non-repayment of loans worth billions to creditors including ABSA bank and KCB.
“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 modernisation and operating efficiency programmes,” Ndeta said in a statement to newsrooms.
In addition to Savannah Cement and Savannah Clinker, some of Benson Ndeta’s other known investments include Tron Logistics and Trans-Africa Power.
Bamburi’s share price at the close if the market yesterday stood at KSh 64.5, a growth of 79.9% in share price since the start of this year.
