Amsons Group, the Tanzanian business conglomerate, has started its marketing campaign to secure the support of Bamburi Cement (NSE: BAMB) shareholders following the release of a shareholder circular Thursday.
The Amsons Group bid is fully financially backed by KCB Bank and secured by a US $5.3 million break fee held in an escrow account at ABSA Kenya.
This is a first in the Kenyan capital markets scene and a demonstration of the seriousness of the AmsonsGroup’s take-over offer.
Through its Kenyan subsidiary and investment vehicle, Amsons Industries (K) Ltd, Amsons intends to invest more than Ksh 23.5 billion to acquire up to 100% of the shares in Bamburi at Ksh 65 per share.
According to the shareholders circular issued by Bamburi Cement Directors, Amson’s acquisition offer opened for acceptance this morning (9.00 a.m. EAT on 25 October 2024) and will run until 5.00 p.m. EAT on 5 December 2024.
The offer’s Closing Date may be extended with the Capital Markets Authority’s (CMA) approval.
Amsons Group Managing Director Mr Edha Nahdi confirmed that Amsons Offer Price represents a 42.3944% premium to the closing market price of Bamburi Shares on the Reference Date and a 52.94% premium to the 30-trading day VWAP of Bamburi Shares from the Reference Date.
The 30-trading-day VWAP metric most accurately depicts Bamburi’s share price when the news of the offer had not been communicated to the public.
Amsons has partnered with KCB Investment Bank as its transaction adviser, underscoring its commitment and determination to engage professionally with the Kenyan market.
While describing Amsons’ offer as robust—based on Bamburi Cement’s underlying value and guaranteed financial underwriting by KCB Bank Kenya—Nahdi also said the firm is keen to foster bilateral relations between Kenya and Tanzania with the US$180 million (Ksh 23.5 billion) investment bid.
As part of the acquisition bid, the firm will engage Bamburi shareholders to explain Amsons’ offer in the coming days.
As of 31 December 2023, regulatory filings indicate that the Bamburi Cement register features 3,954 local individuals holding a 4.28% stake, 557 local institutions holding a 33.56% stake, and others.
“We respect all the shareholders very much, and the engagements are meant to seek their support. During these sessions, we will candidly explain our offer and share details, including the break fee we are offering and our financial guarantees, as this bid is underwritten by Kenya’s largest financial solutions provider, KCB Group,” Nahdi said. He added, “Solid financial guarantees from reputable East African entities back our bid. We greatly respect Kenya’s capital markets, and our offer adheres to all applicable laws and regulations.”
“Beyond the acquisition offer, we are also exploring a medium-term investment commitment in Foreign Direct Investments (FDI) to modernize BamburiCement’s grinding and clinkerisation plants.”
“Thanks to the support of our beloved President’s Mama Samia Suluhu and William Ruto, the foremost Tanzania-Kenya investment advocates, we are betting big on the Kenyan market in a shared prosperity model,” Nahdi said.
Amsons Group is a family-owned business founded in 2006 in Tanzania. Its primary business operations historically involved bulk oil and petroleum products importation under the Camel Oil Tanzania retail brand.
The group has steadily diversified and grown its portfolio in the manufacturing sector with a 6,000MT/day cement manufacturing capability, including through the recently acquired Mbeya Cement facility.
In addition, the group has a 500MT/day Wheat Flour Milling Plant, a state-of-the-art premix Concrete plant, Inland Container Depots (ICDs), Fuel and lubricants, Liquefied Petroleum Gas (LPG), and a transportation fleet across Zambia, Malawi, Mozambique, Democratic Republic of Congo, Burundi and Tanzania.
In the fuel sector, Amsons Group has fuel depots in several countries, including Tanzania, Mozambique, Zambia, and DRC, with over 150 retail stations across the countries.
“Amsons Industries (T) Ltd is a quality cement products manufacturer in Tanzania under the brand names “Camel Cement” and “Tembo Cement,” two household brands in the Tanzanian construction market. Our offer to acquire shares in Bamburi is part of our corporate market expansion plan and will mark the formal entry of Amsons Group into the Kenyan market, where we plan to make investments in other industries in the coming months,” Nahdi said.
“To produce our cement, we deploy world-class cement manufacturing technology that has afforded us sustained market growth and partnerships as the preferred supplier of choice to leading building and construction sector players. We intend to replicate our success in Kenya by building on the solid foundation already set by Bamburi Cement.”