Kenya’s Savannah Clinker Limited has raised its bid for the acquisition of Bamburi Cement, even though its offer already exceeds Tanzania Amsoms’ competing offer.
Savannah has increased its bid to acquire the entire stake in Bamburi Cement for Ksh 76.55 per share, up from the initial Ksh 70 offer, which was already above Amsoms’ competing offer of Ksh 65.
This upward revision values the total offer at just under Ksh 28 billion (Ksh 27.78 billion), surpassing the initial offer of Ksh 25.4 billion.
Savannah Clinker, a company wholly owned by seasoned Kenyan entrepreneur Benson Sande Ndeta, has increased its offer to Ksh 27.7 billion, which includes a Ksh 1.8 billion sweetener for all shareholders.
Savannah Clinker Raises Its Bid
This revised bid now outpaces the US$180 million (Ksh 23 billion) offers made by Tanzanian conglomerate Amsons Group, which also aims to acquire the entire Bamburi equity stake.
Savannah Clinker’s revised offer presents a compelling proposition for Bamburi Cement shareholders, providing more favorable payment terms with a commitment to making payments within 12 months of the deal’s completion, a quicker timeline compared to Amsons Group.
Both Savannah Clinker and Amsons Group have submitted their formal offers to Bamburi Cement’s board with Amsons Group maintaining its initial offer.
The closing date for both offers is on December 5, 2024.
Also Read: Bamburi Issues Warning to Shareholders & Investors
About Savannah Company
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.
Savannah Clinker says they have signed a $415 million (Ksh53.5 billion) financing agreement in mid-Q2 2023 with some unnamed U.S. investors for the development of its limestone extraction and clinker processing factory.
For the year ending 2023, Savannah reported a net loss of Ksh 750,000, improving from a Ksh 3.5 million loss in 2022.
The company’s total equity as of 2023 was Ksh 600.37 million, with property, plant, and equipment valued at Ksh 330.19 million, and exploration capital costs of Ksh271.87 million.
Savannah says it has invested over Ksh 650 million in feasibility studies for its cement operations.
The company said it had also entered into a $380 million (Ksh 49 billion) FIDIC ‘Silver Book’ contract with Sinoma International Engineering Co. Ltd in Q4 2023.
Savannah Cement Limited was placed into administration on 21st July 2023.
Also Read: Savannah Announces Plans to Take Over Bamburi Cement
Bamburi Cement Competing Offer Price
The competing offer price for each ordinary share of Bamburi as submitted by Savannah is set at Ksh70.00, which is significantly higher than Bamburi’s recent trading prices as of July 9, 2024.
Specifically, the offer price includes the following premiums:
- A 53.34% premium over the closing price of Bamburi’s shares on July 9, 2024.
- A 64.55% premium over the 30-day volume-weighted average price (VWAP) of Ksh 42.54 per share.
- A 56.91% premium over the 90-day VWAP of Ksh 44.61 per share.
- A 79.62% premium over the 180-day VWAP of Ksh 38.97 per share.
The competing offeror plans to maintain the existing business operations and employment terms of Bamburi employees after the acquisition.
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