Savannah Clinker Limited (SCL), a prominent player in Kenya’s building and construction sector, has shaken up the cement industry with a bold move to acquire up to 100% of the issued ordinary shares in Bamburi Cement Plc. The local firm, wholly owned by seasoned entrepreneur Benson Sande Ndeta, has tabled a counter-offer worth Kshs 25.4 billion, outstripping a previous bid by Tanzania’s Amsons Group. This strategic offer, subject to regulatory approvals, positions SCL as a serious contender to take over one of Kenya’s leading cement manufacturers.
Savannah Clinker’s offer includes a sweetener of Ksh 1.8 billion for all shareholders, pushing the total bid well above the US$180 million (Kshs 23 billion) offer from Amsons Group. Amsons had earlier proposed to acquire the entire equity stake in Bamburi from Holcim, the Swiss multinational that holds a majority share in the company. However, Savannah Clinker’s counter-offer challenges the finality of Amsons’ deal, particularly by seeking to acquire a minimum of 60% of Bamburi’s shares and offering attractive tax benefits to the Kenyan government.
In a statement, Savannah Clinker’s Executive Chairman, Benson Ndeta, underscored the patriotic drive behind the bid, emphasizing the importance of retaining Kenyan manufacturing interests within the country. Ndeta, a veteran in the construction industry with over two decades of experience, has been actively involved in the sector as the former non-executive chairman of East African Portland Cement and a former majority shareholder at Savannah Cement. His commitment to Bamburi’s growth includes plans for a significant capital expenditure to modernize the company and improve operational efficiency.
The proposed Kshs 70 per share offer represents a substantial premium over Bamburi’s recent trading prices, providing a compelling incentive for shareholders. Specifically, the offer is a 53.34% premium over Bamburi’s share price as of July 9, 2024, and a 64.55% premium over the 30-day volume-weighted average price. This aggressive pricing strategy highlights Savannah Clinker’s determination to secure the deal and reflects their confidence in Bamburi’s potential for future growth.
One of the key differentiators in Savannah Clinker’s bid is the promise of immediate payment to shareholders upon the transaction’s closure, with a target date no later than February 28, 2025. This is in contrast to Amsons’ proposed long stop date of November 28, 2025, offering shareholders nearly a 15% uplift in value due to the accelerated payment timeline. Furthermore, Ndeta has assured stakeholders that if the competing offer garners acceptance from 90% or more of Bamburi’s shareholders, the remaining minority shareholders will be offered a fair price, in line with market regulations.
Savannah Clinker’s bid also comes with commitments to maintain Bamburi’s listing on the Nairobi Securities Exchange (NSE) and to preserve the company’s operational integrity. Ndeta emphasized that SCL plans to uphold existing employment rights, including pension schemes, and to support the professional growth and retention of Bamburi’s Kenyan workforce. This approach not only secures Bamburi’s future but also aligns with SCL’s broader strategy of fostering local industry and contributing to Kenya’s economic development.
Savannah Clinker’s ambitious plans extend beyond the Bamburi acquisition. Established in 2019, the company has rapidly expanded its footprint in the mining, manufacturing, and cement processing sectors. It is currently developing a limestone extraction and clinker processing plant in Kitui County, further solidifying its position in Kenya’s construction materials market.
As the battle for Bamburi Cement Plc intensifies, Savannah Clinker’s counter-offer stands out not only for its financial competitiveness but also for its clear commitment to sustaining Kenyan industrial interests. With regulatory approval pending, all eyes are now on Bamburi’s shareholders as they weigh this compelling new proposal against the backdrop of a rapidly evolving cement industry.
