Amsons boosts shareholder engagement in $182.4 million bid for Bamburi acquisition

Timilehin Adejumobi -
Key Points
  • Amsons Group launches a $182.4 million bid for Bamburi Cement, seeking full shareholder support through targeted marketing campaigns and informational sessions.
  • The acquisition offer includes a Ksh65 ($0.5) per share proposal, featuring financial backing from KCB Bank and a $5.3 million break fee. 
  • Amsons aims to expand its presence in East Africa's cement market, highlighting a 42.4% premium over Bamburi’s market price to attract shareholders.

Amsons Group, a Tanzanian family-owned conglomerate led by businessman Edha Nahdi, has launched a marketing campaign to garner support from shareholders of Bamburi Cement following the release of a shareholder circular on Tuesday. The circular outlines Amsons' acquisition proposal through its Kenyan subsidiary, Amsons Industries (K) Ltd.

The bid offers an investment of over Ksh23.5 billion ($182.4 million), equating to Ksh65 ($0.5) per share for up to 100 percent of Bamburi's shares. The offer is supported by KCB Bank and includes a break fee of $5.3 million (Ksh683.7 million), which is being held in escrow at Absa Bank Kenya. This initiative comes on the heels of the termination of a prior sale agreement between Amsons and Holcim, enabling Savannah Clinker to submit a competing proposal.

Savannah Clinker, Amsons compete for Bamburi

Savannah Clinker has made an offer of Ksh76.55 ($0.59) per share, increasing competition and prompting Amsons to effectively present its bid to shareholders. Bamburi’s circular, issued on Oct. 25, states that acquisition offers from both Amsons and Savannah Clinker will be accepted until Dec. 5, 2024. The board clarified that shareholders can only accept one offer: “If any shareholder accepts both offers, both acceptances will be rejected.”

Holcim, the Swiss building materials giant, controls a 58.6 percent stake in Bamburi through its subsidiaries, Fincem Holding and Kencem Holding. Nahdi noted that Amsons' bid represents a 42.4 percent premium over Bamburi's last closing market price and a 52.94 percent premium over the 30-day volume-weighted average price as of the reference date. He highlighted the strength of the bid, supported by Bamburi's intrinsic value and robust financial backing from KCB Bank Kenya.

Amsons aims to gain shareholder support

To enhance shareholder support, Amsons plans to hold informational sessions detailing its offer, financial guarantees, and the strategic rationale behind the acquisition. As of December 31, 2023, Bamburi's shareholder register indicates that 3,954 local individuals hold a 4.3 percent stake, while 557 local institutions possess 33.56 percent.

“We value all shareholders and aim to earn their support by candidly explaining our offer, including the break fee and financial guarantees,” Nahdi stated, noting the investment's potential to strengthen Kenya-Tanzania relations.

Amsons Group targets cement market growth

Under Edha Nahdi’s leadership, Amsons Group has experienced sustainable profit growth and solidified its business foundation in a challenging operational landscape. The proposed acquisition of Bamburi Cement aligns with the group’s strategy to expand capacity and enhance its presence in the global market.

Bamburi Cement, recognized for its pioneering role in sustainable construction, operates Sub-Saharan Africa’s largest cement plant located in Mombasa. The company’s focus on innovative building solutions and environmental sustainability has established it as a key player in the region’s construction industry. Amsons' $182.4 million bid through its private investment arm aims to bolster its position in East Africa's cement market.