The acquisition battle for Bamburi Cement Plc has taken a decisive turn as Savannah Clinker Limited withdrew its $197.2 million bid, leaving Tanzania’s Amsons Industries (K) Limited as the sole contender with its $182.8 million offer. The decision, announced by the Capital Markets Authority (CMA) on December 4, 2024, follows a series of legal and financial challenges faced by Savannah Clinker and its chairman, Benson Ndeta.
Legal Woes Force Savannah to Pull Out
Savannah Clinker’s withdrawal comes in the wake of Ndeta’s arrest and indictment on fraud charges. He is accused of fraudulently securing a $35 million loan from Absa Bank Kenya eight years ago and faces additional allegations of financial misconduct tied to his previous venture, the defunct Savannah Cement.
In a statement, Savannah attributed its decision to the financier of its bid, Global Infrastructure Finance and Development Authority Inc. (GIFDA), withdrawing support due to the legal uncertainties surrounding Ndeta. The company also blamed the CMA for declining its request to extend the offer period by 60 days to address due diligence concerns.
The Acquisition Tussle
The withdrawal marks the end of a heated bidding war between Savannah and Amsons. Savannah had previously upped its offer from KSh 70 ($0.47) per share to KSh 76.55 ($0.54), representing a significant 53.34% premium over Amsons’ $182.8 million bid. The competitive atmosphere briefly boosted Bamburi’s share price to KSh 77.52 before a subsequent dip following a dividend payout.
Despite Savannah’s aggressive counteroffer, regulatory disclosures revealed Holcim, Bamburi’s largest shareholder, had already approved Amsons’ initial bid in July. Holcim’s endorsement gave Amsons an edge, but Savannah’s entry delayed proceedings and raised uncertainty about the final outcome.
What’s Next for Bamburi Cement?
With Savannah’s exit, Amsons Industries is poised to secure its acquisition of Bamburi Cement, pending regulatory approval. Shareholders who initially accepted Savannah’s bid have until December 5, 2024, to reconsider and decide whether to sell their shares to Amsons or retain their stakes.
The acquisition would make Amsons the dominant shareholder in Bamburi, a company that controls approximately 30% of Kenya’s cement market. If the deal goes through, Bamburi may delist from the Nairobi Securities Exchange (NSE), following a trend among companies seeking to operate privately.
A Contentious Chapter in Kenyan Business
The saga underscores the complexities of high-stakes corporate acquisitions, where legal, financial, and regulatory factors intersect. Savannah’s high-profile withdrawal highlights the risks of corporate governance lapses and the importance of due diligence in securing investor confidence.
Amsons Industries now has a clear path to finalize the acquisition and cement its position as a significant player in East Africa’s construction sector.
