Savannah Clinker has withdrawn its $197.2 million bid to acquire Bamburi Cement, leaving Tanzania’s Amsons Group, with its lower $182 million offer, as the likely buyer. Savannah Clinker’s withdrawal follows the arrest of its CEO, Benson Ndeta, over fraud allegations related to a $35 million loan obtained from Absa Bank Kenya eight years ago.
Factors Leading to Withdrawal
Savannah Clinker’s withdrawal, announced on Wednesday, was driven by the loss of its financial backer, Global Infrastructure Finance and Development Authority Inc. (GIFDA), after Ndeta’s arrest. The Capital Markets Authority (CMA) also declined Savannah’s request for a 60-day extension to its offer period to address inquiries.
“The withdrawal of the competing offer has been occasioned by the recent well-publicised arrest and indictment of the chairman and main shareholder of Savannah,” the company stated.
The Acquisition Process So Far
- Initial Approval: On July 27, Holcim, Bamburi’s largest shareholder, accepted Amsons Group’s $182 million buyout offer.
- Savannah’s Counteroffer: Savannah Clinker complicated the process by submitting a $197.2 million bid, offering $0.54 per share, a 53.34% premium over the share price.
- Withdrawal Announcement: Savannah’s withdrawal eliminates the higher competing bid, making Amsons Group the only valid acquirer.
Next Steps for Shareholders
The CMA has given Bamburi shareholders until December 5, 2024, to reconsider their decision if they had initially accepted Savannah Clinker’s bid. Shareholders who do not act by this deadline will be deemed to have declined Amsons Group’s offer.
“Shareholders who do not change their decision will be deemed to have declined the offer by Amsons,” CMA said.
Implications of Amsons’ Acquisition
If regulators approve Amsons Group’s acquisition:
- Market Impact: Bamburi Cement, which holds a 30% market share in Kenya, could delist from the Nairobi Securities Exchange (NSE).
- Operational Control: Amsons Group, known for its investments in cement manufacturing, will likely integrate Bamburi’s operations into its broader regional portfolio.
Conclusion
Savannah Clinker’s withdrawal has simplified the acquisition path for Amsons Group, pending regulatory approval. While the developments underscore the challenges of corporate acquisitions in volatile markets, Bamburi Cement is poised for a new phase under Amsons, potentially reshaping Kenya’s cement industry landscape.