Amsons Group, the Tanzanian business conglomerate, has started a campaign to secure the support of Bamburi Cement (NSE: BAMB) shareholders following the release of a shareholder circular on 24th October. The Amsons Group bid is fully 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 and a demonstration of the seriousness of the Amsons Group’s take-over offer. Through its Kenyan subsidiary and investment vehicle, Amsons Industries (K) Ltd, Amsons intends to invest more than Ksh23.5 billion to acquire up to 100% of the shares in Bamburi at Ksh65 per share.

According to the shareholders circular issued by Bamburi Cement Directors, Amson’s acquisition offer opened for acceptance at 9 a.m. EAT on 25th October 2024 and will run until 5.00 p.m. EAT on 5th 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. 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.

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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 — Mr Nahdi said the firm is keen to foster bilateral relations between Kenya and Tanzania with the US$180 million (Ksh23.5 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 31st 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,” Mr Nahdi said.

Beyond the acquisition offer, he said Amsons is also exploring a medium-term investment commitment in Foreign Direct Investments (FDI) to modernise Bamburi Cement’s grinding and clinkerisation plants.

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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.

“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,” Mr Nahdi said.