Tanzania’s Amsons Group has initiated its Ksh.23.6 billion acquisition of Bamburi Cement, one of Kenya’s leading cement manufacturers – according to a report seen by Business Daily.
The deal commenced with a significant block trade worth Ksh.8.91 billion on Wednesday, marking the acquisition of the first tranche of shares.
Amsons purchased 137.1 million shares at a price of Ksh.65 per share, bringing the total transaction value to Ksh.8.91 billion. This trade alone accounted for 38% of Bamburi’s total issued shares, which stand at 362.9 million, and represented 95% of the day’s total turnover.
Record-Breaking Activity at the NSE
The transaction propelled trading activity at the Nairobi Securities Exchange (NSE) as the equity turnover surged to Ksh.9.4 billion in a single day, a significant 6052% increase from the previous session’s Ksh.152.5 million.
“Today’s market turnover surged significantly to KSh 9 billion, up from KSh 152 million in the previous session, driven by a block trade in Bamburi Cement,” NSE noted in its daily report.
Additionally, the total volume of shares traded on the day rose by 1864%, reaching 174 million compared to 8.8 million shares traded during the prior session.
Bamburi Cement’s shares accounted for 78% of the day’s total trading volume.
What is a Block Trades
A block trade involves a large securities transaction that is privately negotiated to minimize its impact on the market price. This method was employed to facilitate the substantial exchange of Bamburi Cement shares during the Amsons acquisition.
Also Read: Tanzania’s Amsons Group Offers $180 Million for Bamburi Cement Acquisition
Bamburi Cement’s principal shareholders include:
- Fincem Holding Limited (29.30%)
- Kencem Holding Limited (29.30%)
- Standard Chartered Nominees (15.68%)
- Aksaya Investment Holdings Limited (11.12%)
Acquisition Tussle
On December 4, 2024, Savannah Clinker, a competing bidder, withdrew its offer for Bamburi Cement. The company cited the Capital Markets Authority’s (CMA) refusal to extend the offer period by 60 days as a key factor, especially in light of the arrest and prosecution of its chairman.
Earlier in October, Savannah Clinker had increased its offer for Bamburi Cement from Ksh.70 to Ksh.76.55 per share. In contrast, Amsons’ initial offer of Ksh.65 per share, announced in July, remained unchanged.
This bidding war saw Bamburi’s share price peak at Ksh.77.52 in early September, before closing at Ksh.52 on December 5, 2024 the final trading day before the announcement.
Future Prospects for Bamburi Cement
If Amsons successfully acquires 90% or more of Bamburi’s shares, the group will initiate a squeeze-out process to buy out the remaining shareholders at the prevailing market price.
Amsons has also indicated that it will evaluate the feasibility of Bamburi remaining listed on the NSE. Should the acceptances reach 75%, Amsons may apply for Bamburi’s delisting.
