Billionaire investor Balubhai Patel doubled his stake in Bamburi Cement ahead of the announcement of the company’s purchase, boosting his expected gains from the proposed deal.
Shareholder filings as at June 30, 2024, show Mr. Patel’s stake in the cement company has risen to 30.52 million shares, or 8.41% of the company’s issued shares. That’s up from the 14.96 million shares, or 4.12%, that the company’s latest annual report showed he held at the end of December 2023.
He owns the stake through his holding company Aksaya Investment Holdings Limited, making him the largest individual shareholder in Bamburi. Swiss multinational Holcim is the largest owner of the company with a 58.6 per cent stake, followed by a nominee account resident at Standard Chartered which owns a 15.68 per cent stake in the cement company.
Updated shareholder data has been released by Amsons Group, the Tanzanian conglomerate seeking to acquire a 100 percent stake in Bamburi for Sh23.6 billion.
At the end of December 2023, Mr Patel’s shares in Bamburi were worth Sh536.2 million, at a share price of Sh35.85 at the time. The current stake is now worth Sh1.88 billion due to the additional shares he acquired, and a 71.6 per cent rise in the share price to Sh61.50 in the year to date. Since the deal was announced on July 10, Bamburi shares have risen 36.7 per cent, up from Sh45 a share.
Trading data on the Nairobi Securities Exchange shows that between January and June, there were three sessions of significant trading in Bamburi shares, suggesting potential takeovers in the market by Mr Patel.
The combined deals in January, February and June saw investors move 9.13 million shares at an average price of Sh38 per share, representing 66 percent of the total volume of 13.8 million Bamburi shares traded in the first half of the year.
Ahead of the 2024 stock acquisition, Bamburi’s annual reports show Mr. Patel last expanded his stake in 2021, when he acquired 7.93 million shares to add to the 7.03 million shares he already owned, taking his ownership to 14.96 million units.
However, a separate document on the cement maker’s website shows he had already raised his stake to 20.8 million shares by the end of December 2023, suggesting he had made some of the 5.8 million share purchases last year.
amsons last week Offered to buy Bamburi shareholders’ shares at Sh65 per shareThe deal was valued at Sh23.6 billion, representing an 85.7 per cent premium to the average price of Sh35 at which Bamburi shares were trading between January 9 and July 9, 2024. At the offer price, Mr Patel stands to receive Sh1.98 billion for his shares in the cement company if the deal goes through, while Holcim stands to receive Sh13.83 billion.
Amsons said last week it had received irrevocable undertakings to sell shares from Holcim, which holds its stake in Bamburi through two investment companies – FinCem Holdings Ltd and KinCem Holdings Ltd – each with an equal stake of 29.3 percent.
The deal could see Bamburi, one of Kenya’s leading companies, delisted from the National Securities Exchange, with Amsons saying it would assess the effectiveness of the continued listing before making a decision. Under Kenya’s capital markets rules, Amsons would need to acquire at least 75% of Bamburi to delist it, while acquiring more than 90% would allow it to compulsorily buy out dissenting minority shareholders.
The parties also agreed to include a termination fee in the deal, which will see Amsons pay Bamburi shareholders who accepted the offer $5.31 million (Sh688 million) – about three percent of the total consideration on offer – if it pulls out of the deal for reasons other than legal obstacles.
Cancellation fees will apply if the deal is not closed by the end of November 28, 2025.
In mergers and acquisitions, a break-even fee is a penalty paid by one party who withdraws from a deal or agreement, and is usually put in place to prevent either party from backing out of the deal once firm agreements have been negotiated.
