In a bold move set to reshape Kenya’s cement industry, Savannah Clinker Limited has submitted a Ksh 25.4 billion counter-offer to acquire up to 100% of Bamburi Cement Plc shares. This follows formal approval from the Capital Markets Authority (CMA), marking a significant turn in the competition to take over the leading cement manufacturer. Savannah Clinker’s offer represents an attractive alternative for shareholders, with a higher cash consideration and a quicker payout timeline than a previous bid from Tanzanian conglomerate, Amsons Group.
The locally incorporated company, led by seasoned entrepreneur Benson Sande Ndeta, is offering Ksh 70 per share—Ksh 1.8 billion higher than Amsons’ Ksh 23 billion bid. Bamburi’s Board of Directors confirmed receiving the offer, which includes assurances of the availability of dedicated funding backed by an international, professionally regulated financial firm.
Ndeta emphasized that the bid will keep Bamburi listed on the Nairobi Securities Exchange (NSE), allowing 40% of shares to remain as free float for institutional and local investors, while offering a premium for the minority stakes. This contrasts with Amsons’ plan, which has a longer payout timeline, stretching into late 2025.
In a public notice, Savannah Clinker’s offer promises shareholders Ksh 70 per share, payable by February 2025, far ahead of Amsons’ November 2025 offer. This faster payout reflects a close to 15% uplift in the value of the bid.
“We have provided detailed information and all required disclosures to Bamburi Cement, and we are committed to ensuring business continuity for both employees and shareholders,” said Benson Ndeta, Savannah Clinker’s Executive Chairman. The firm has provided binding financial guarantees to its Transaction Advisor, Faida Investment Bank, ensuring the availability of funds for direct payment to shareholders.
Savannah Clinker also plans to uphold Bamburi’s contractual obligations to its employees, ensuring pension rights and statutory employment protections remain intact. “We value the expertise and experience of Bamburi’s current management and employees and intend to provide avenues for growth and advancement within the company,” Ndeta added.
Savannah Clinker’s strategic bid stands to benefit the Kenyan economy by keeping profits within the country, avoiding the repatriation of dividends or conversion into foreign currency, which would have been the case under foreign ownership.
Founded in 2019, Savannah Clinker Limited has steadily grown as a key player in Kenya’s construction industry. The company is currently developing a limestone extraction and clinker processing plant in Kitui County, further demonstrating its commitment to expanding local manufacturing capacity.
Savannah Clinker’s Ksh 70 per share offer represents a 53.34% premium over the market price as of July 9, 2024, the day prior to Amsons’ initial bid. It also offers a 64.55% premium over the 30-day volume-weighted average price (VWAP) of Ksh 42.54 per share, making it a lucrative deal for shareholders looking to capitalize on their investments.
Should Savannah Clinker secure more than 90% of the shares, they will offer remaining shareholders a price equal to the prevailing market rate or the Ksh 70 per share, whichever is higher, in compliance with Kenya’s Take-Over Regulations and the Companies Act, 2015.
This move intensifies competition between Savannah Clinker and Amsons Group, a Tanzanian firm that has also placed a bid for the full acquisition of Bamburi Cement. Savannah’s quicker payout timeline and enhanced offer are key factors that could sway shareholders in their favor.
Bamburi Cement, Kenya’s leading cement manufacturer, stands at a critical juncture as both local and regional firms vie for control of its vast market share. As the dust settles, the outcome of this takeover battle will likely reshape the landscape of Kenya’s cement and construction industries.
The final decision now rests with Bamburi’s shareholders, who must evaluate the competing bids and choose the best path forward. With Savannah Clinker’s offer presenting a quicker, higher-value proposition, the coming weeks promise to be decisive for the future of the company.
