Tycoon Ndeta blames CMA for failed Bamburi takeover bid

Savannah Cement chairman Benson Ndeta. 

Photo credit: File| Nation Media Group

Businessman Benson Ndeta has accused the Capital Markets Authority (CMA) and his detractors in government of contributing to his exit from the battle to acquire Bamburi Cement.

Mr Ndeta’s Savannah Clinker on Wednesday withdrew its enhanced offer of Sh76.55 per share or a total of Sh27.7 billion for 100 percent of the shares of the Nairobi Securities Exchange (NSE)-listed firm.

The decision, which removes competition for Tanzania’s Amsons Group that has made a Sh23.5 billion or Sh65 per share bid for Bamburi, was made days after Mr Ndeta’s arrest over alleged fraud.

The businessman was arrested and later released over an allegation that he fraudulently obtained a $35 million (Sh4.5 billion) loan from Absa Bank Kenya eight years ago.

“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 (Mr ndeta), which has led to the financier of the competing offer seeking additional due diligence, coupled with the decline by the CMA of a request made on December 2, 2024 to extend the offer period by 60 days to enable the competing offeror to respond to any inquiries,” Savannah said in a statement.

Mr Ndeta had earlier said his bid for Bamburi was being backed by the Global Infrastructure Finance & Development Authority Inc (Gifda) which describes itself as a non-profit financier of infrastructure projects.

With offices in London and Pennsylvania, Gifda says it has funded infrastructure projects worth billions of dollars in the United States and other markets.

“Gifda, the financier, has made sufficient funding arrangements and has confirmed that the funds are free and unencumbered, and are available to Savannah Clinker Limited,” Faida Investment Bank, which acted as the transaction and financial adviser, wrote to CMA in October.

“Additionally, Faida has received a statement showing the assets held by Gifda in Fidelity Investments (a wealth manager based in Boston).

The exit of Savannah Clinker marks a rare instance where a rival bidder for a NSE-listed firm has walked away abruptly without completing its takeover offer or reaching a settlement with its rivals.

Savannah had initially responded to Amson’s offer with a bid of Sh70 per share which it later raised to Sh76.55 per share.

“Following this development, shareholders of Bamburi Cement who had accepted the offer by Savannah Clinker Limited have until December 5, 5pm to reconsider their decision,” CMA said in a statement.

“Shareholders who don't change their decision will be deemed to have declined the offer … and remain shareholders of Bamburi Cement.”

The regulator noted that as a result of Savannah’s exit, the only valid offer is the one from Amsons.

Today is the last trading day of shares of Bamburi Cement before they are suspended tomorrow to determine the outcome of the company’s buyout.

Bamburi says in a circular to shareholders that the suspension of trading in its shares will be for a period to be determined by CMA and the NSE. The result of the buyout offer is expected to be published by December 20.

Shareholders of Bamburi also have until today (Thursday) to accept or snub Amsons’s offer after Savannah threw in the towel. Those snubbing the offer risk remaining as minority investors in a company that could be delisted, losing the liquidity provided by being on the NSE.

“Should Amsons receive acceptances of 75 percent or more of Bamburi Shares, Amsons will evaluate the continued efficacy of Bamburi remaining listed and may then, subject to compliance with the Capital Markets Act, and approval from the CMA, apply for Bamburi to be delisted from the NSE,” the cement firm says in a circular to shareholders.

Bamburi’s shares have traded in a wide range of between Sh45 and Sh82 as investors responded to the competing bids and a special dividend of Sh18.25 per share which was paid in September.

The share price has retreated to trade at an average of Sh62 in the past few days, closely tracking Amsons’ offer and substantially discounting Savannah’s bid which has now been discontinued.

Amsons will buy all the shares it gets while Savannah had said it would only proceed with the buyout if it received acceptances of more than 60 percent, injecting uncertainty in the transaction.

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