Savannah Clinker Limited (SCL), a local building and construction sector firm, has placed a sweet counteroffer bid to acquire up to 100% of the issued ordinary shares in listed cement solutions provider Bamburi Cement Plc, subject to regulatory approvals.
Savannah Clinker, a firm wholly owned by Benson Sande Ndeta, a seasoned Kenyan entrepreneur, is placing $190.3mn counteroffer bid. With a Ksh 1.8bn sweetener for all shareholders, the counteroffer now outpaces the $180 million (Kshs 23bn) offer recently placed by a Tanzanian conglomerate, Amsons Group, which is also seeking to acquire the entire Bamburi equity stake.
Instructively, by making an offer for the entire company and pegging success at 60% of the shares, SCL has effectively challenged Amsons position that its transaction with Holcim, the Swiss multinational firm that owns a majority stake in Bamburi, was irrevocable. 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 counteroffer bid on the table, Savannah Clinker will seek to exit Holcim, 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 sweet offer that now places Savannah Clinker in a pole position in this deal, the firm has topped up Amsons Group's Kshs 65 per share offer with a Kshs 5 cherry on top of the cake. The firm is offering to snap up the 362,959,275 Bamburi-issued shares for a Kshs. 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 counteroffer development, Savannah Clinker Executive Chairman and Director Mr Benson Ndeta said the firm is now moving to complete its Competing Offer Document in strict compliance with regulatory requirements for the consideration of Bamburi Cement shareholders. He confirmed that the firm will actively engage Holcim and the minority shareholders seeking to win their acceptance.
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.
"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," Ndeta said.
He added: "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. 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 modernization and operating efficiency programs."
At $0.5 (Kshs 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 KES 42.54 per ordinary share, A premium of 56.91% over the 90-day VWAP of KES 44.61 per ordinary share, and a premium of 79.62% over the 180-day VWAP of KES 38.97 per ordinary share.
Subject to meeting the minimum acceptance threshold set at 60%, Savannah Clinker Ndeta disclosed does not intend to de-list Bamburi from the NSE. "However, should the Competing Offeror achieve acceptances of 90% or more of the Offer Shares, the Savannah Clinker shall, by the Take-Over Regulations, offer the remaining shareholders a consideration that is equal to the prevailing market price of the voting shares or the price offered to the other shareholders of Bamburi, whichever is higher, with the provisions of the Companies Act, 2015 applying," he said.
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 pensions of all Bamburi employees, which will remain in force by the applicable laws.
Ndeta said: "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.
