Published on September 13, 2024 by Agencies for Kenya Online News
Last Updated on 2 years by Agencies for Kenya Online News
Listed cement manufacturer Bamburi Cement Plc has formally confirmed receipt of a Ksh 25.4 billion counter offer from Savannah Clinker Limited, a local building and construction solutions provider seeking to acquire up to 100% of the manufacturing firm (Bamburi) issued shares, subject to regulatory approvals.
This followed receipt by the Kenyan bidder of formal approval from the Capital Markets Authority to make the bid, themselves having been provided with a independent third party professional attestation as to the availability of the requisite, dedicated funding.
In a public notice published in the local dailies, the Bamburi Cement Plc Board of Directors confirmed that they had received a Competing Offeror’s Statement from Savannah Clinker Limited (SCL) for a Kshs 70 cash consideration for each ordinary share of Bamburi.
The Kenyan firm, wholly owned by Mr Benson Sande Ndeta, a seasoned Kenyan entrepreneur, has set out to improve the position for Bamburi Cement shareholders with an offer representing Ksh 1.8 billion bonus above the US$180 million (Kshs 23 billion) offer recently placed by a Tanzanian conglomerate, Amsons Group, which is also seeking to acquire the entire Bamburi equity stake.
Timing-wise the Savannah bid is also an improvement on that from the Tanzanians; the Kenyan firm is offering to snap up the 362,959,275 Bamburi-issued shares for a Kshs. 70 cash consideration payable by end of February 2025, dramatically improving on the end of November 2025 long-stop timeframe offered by the Tanzanian bidder. This time difference represents a close to 15% uplift of the offer price.
When contacted for comment, Savannah Clinker Executive Chairman and Director Mr Benson Ndeta confirmed that the firm had served Bamburi Cement with a detailed Competing Offeror’s Document containing relevant information and disclosures as per regulatory requirements. Ndeta said Savannah Clinker will also seek to retain this critical company listed, with up to 40% of its shares available as a free float to institutional and local investors.
Ndeta said that as part of the regulatory disclosures, SCL has provided binding financial guarantees to its Transaction Advisor, Ms Faida Investment Bank, from an international, professionally regulated firm. This confirmation provided to Faida Investment Bank indicates availability of funds for direct payment to shareholders compared to the Amson’s offer which included confirmation of credit facilities by the underwriter, KCB Investment Bank Limited.
The competing offeror’s statement provides that: “the Transaction Advisor, Faida Investment Bank Limited, has received a letter from a leading, professionally regulated international firm confirming that (a) they act for the investor, (b) the investor is in receipt of sufficient funding for this specific transaction; and (c) that the funding is “free and unencumbered” for such purposes…”.
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 while offering a premium to acquire minority equity stakes.
Savannah Clinker, he assured, also intends to ensure sustained Bamburi Cement business continuity 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.
Said Ndeta,” 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 Limited is a mining, manufacturing, processing, packaging, marketing, and cement solutions provider. It is also developing a limestone extraction and clinker processing plant in Kitui County.
