Savannah Clinker Limited (SCL) has placed a counter-offer bid of Ksh. 25.4 billion to acquire up to 100% of the issued ordinary shares in listed cement company Bamburi Cement. The bid, which is subject to regulatory approvals, also offers a Ksh. 1.8 billion sweetener for all shareholders.
Savannah Clinker, which is a local building and construction sector firm, is wholly owned by Benson Sande Ndeta, a seasoned Kenyan entrepreneur. The counter-offer now outpaces the Ksh. 23 billion (USD 180 million) offer recently placed by a Tanzanian conglomerate, Amsons Group, which is also seeking to acquire the entire Bamburi equity stake.
By making an offer for the entire company and pegging success at 60% of the shares, SCL has challenged Amsons position in the possible acquisition. As a locally incorporated firm, SCL’s bid will also offer attractive tax benefits to the government as dividends will not be expatriated or converted to foreign currency.
By placing the improved counter-offer bid on the table, Savannah Clinker will seek to exit Holcim, the Swiss multinational firm that owns a majority stake in Bamburi, while offering a premium to acquire minority equity stakes. Additionally, SCL has indicated that it will immediately pay all shareholders after the transaction closes and no later than February 28, 2025, compared to a long stop date of November 28, 2025, issued in the Amsons offer. This time difference represents a close to 15% uplift of the offer price.
In the offer which now places Savannah Clinker in a pole position in this deal, the firm has topped up Amsons Group’s Ksh. 65 per share offer with an additional Ksh. 5. The firm is offering to snap up the 362,959,275 Bamburi-issued shares for a Ksh. 70 cash consideration payable almost immediately.
According to details filed with 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 Benson Ndeta said the firm is now moving to complete its Competing Offer Document. This is in strict compliance with regulatory requirements for the consideration of Bamburi Cement shareholders. He also confirmed that the firm will actively engage Holcim and the minority shareholders seeking to win their acceptance.
“On behalf of Savannah Clinker, 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. 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,” Ndeta said.
At Ksh. 70, the competing offer price represents a 53.34% 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% premium over the 30-day volume-weighted average price (“VWAP”) of Ksh. 42.54 per ordinary share, A premium of 56.91% over the 90- day VWAP of Ksh. 44.61 per ordinary share, and a premium of 79.62% over the 180-day VWAP of Ksh. 38.97 per ordinary share.