Swiss firm, Tanzania tycoon terminate pact for Bamburi sale

Amsons Group, which has interests in the cement, fuel and transport sectors, is controlled by Tanzanian businessman Edhah Abdallah Munif, with minority stakes in various subsidiaries held by other members of his family.

Savannah Clinker is wholly owned by Kenyan businessman Benson Ndeta, a former shareholder and chief executive of Savannah Cement and formerly chairman of East Africa Portland Cement.

Read:  Why Ndeta faces tough task in bid to acquire Bamburi

The changes in the terms of each bid are contained in their respective full offer documents dated October 22. The offers are running concurrently, closing on December 5, 2024.

Holcim’s Bamburi stake is held via two investment vehicles known as Fincem Holding Limited and Kencem Holding Limited, each with a holding of 29.3 percent. The two vehicles signed the now cancelled irrevocable sale agreement with Amsons in July, effectively binding them to the sale and giving the bid a head start over any rival offers.

Amsons said in its offer document that it negotiated the removal of the binding sale agreement in order to allow each Bamburi shareholder to evaluate all offers and make an unrestrained decision as to which one to accept.

The Bamburi board has also recommended that shareholders accept either one of the offers—after consulting their tax, legal and/or financial advisers—saying it considers the offers to be reasonable.

“Accordingly, Holcim (through its subsidiaries Fincem and Kencem) is under no obligation to accept the offer and in in the same position as any other shareholder in Bamburi when determining whether to accept the offer, other competing offer that may be made, or whether to decline all offers,” said Amsons in its offer document.

An irrevocable sale agreement is a binding undertaking by a majority shareholder to sell their stake to a bidder in a takeover offer, and it can only be broken under special circumstances or with the concurrence of both parties.

Savannah’s bid, while superior in price, was effectively not viable as long as the Amsons-Holcim agreement was in place, given that it needs to realise at least 60 percent of Bamburi issued shares in order to proceed to completion. Amsons’ bid does not have a minimum threshold.

Savannah Clinker’s offer document however opens a window for the company to avoid having its bid scuppered by failure to raise the 60 percent stake, saying that it retains a discretion to waive the condition “at least 10 days before the closing date or a later date as the CMA may allow.”

Holcim and Amsons have also reviewed the terms of the $5.3 million (Sh684 million) break fee or penalty that was negotiated as part of the initial agreement, in which Amsons committed to pay the amount to Holcim and other shareholders accepting its offer if it walked out of the deal.

They have instead entered into an escrow agreement with Absa Bank Kenya, which will hold the amount and handle any payments from the kitty.

The fee will be distributed to shareholders if the offer has not occurred by the end of November 28, 2025 except if the deal is derailed by an award, decision, injunction, judgement, order or verdict rendered by a court or tribunal of competent jurisdiction.

Other conditions that would trigger the payment include withdrawal of the offer by Amsons, failure by the company to show proof of funds and failure to get government approval for the deal.

Both companies published letters by their respective transaction advisors indicating that they have been assured of availability of funds to cover the bids.

Savannah’s transaction advisor Faida Investment Bank said it received a letter from US-based infrastructure financier Global Infrastructure Finance & Development Authority (GIFDA) committing to finance the company’s bid.

On its part, Amsons Group published a letter from KCB Investment Bank, saying that KCB Bank Kenya—Amsons’ principal banker—has provided an irrevocable bank guarantee for the full Sh23.6 billion it needs to finance its Bamburi bid.