Amsons Industries, a subsidiary of the Tanzanian conglomerate Amsons Group, has made a significant move with a KShs 23.59 billion buyout offer for Bamburi Cement. The offer, valuing Bamburi Cement at KShs 65 per share, represents a substantial 44% premium over its closing price on June 9th, 2024.

A key aspect of this buyout is the potential delisting of Bamburi Cement from the Nairobi Securities Exchange (NSE), contingent on Amsons securing at least 75% acceptance of their offer. Currently, Amsons has received an irrevocable commitment from Bamburi’s majority shareholder, Holcim, which owns a combined 58.6% stake through its subsidiaries Fincem Holding Ltd and Kencem Holding Ltd.

To underscore their commitment, Amsons has agreed to a break fee of $5.3 million, plus any accrued interest, if the deal is not completed within the next 17 months.

The market has reacted positively to the buyout news, with Bamburi Cement (ticker: BAMB) closing Thursday’s trading at KShs 57.75, marking a notable 28.3% gain from the previous day’s closing price. This surge suggests that the stock might continue to rise toward Amsons’ offer price.

However, not all investors are optimistic. Those who purchased shares at highs above KShs 195 in mid-2017 face potential losses, as the buyout offer price is significantly lower. According to the details of Amsons’ offer, all current shareholders will receive the anticipated special dividend from Bamburi Cement’s divestment from Uganda’s Hima Cement, which might mitigate some concerns.

This buyout offer highlights a pivotal moment for Bamburi Cement, with substantial implications for its future on the NSE and the broader equities market.