Varun leads race for Dairibord control

STAFF WRITER
Varun Beverages has emerged as the frontrunner to acquire a controlling stake in publicly traded Dairibord Holdings Limited, Business Times can report.
The development follows an announcement by Dairibord company secretary Maurice Karimupfumbi, advising shareholders that three major investors—Equivest Asset Management, Mega Market and Mutare Mart & Exchange—had jointly notified the board that they were in negotiations with an unnamed third party for the sale of their combined controlling shareholding.
The proposed transaction, if concluded, would result in a change of control at the dairy processor and is expected to have significant implications for the company’s ownership structure and strategic direction.

Collectively, the three investors control more than 51% of Dairibord’s issued ordinary shares, giving the prospective buyer the opportunity to secure outright control of one of Zimbabwe’s leading consumer goods companies.
While Karimupfumbi did not disclose the identity of the prospective buyer, market speculation suggest that Varun Beverages has emerged as the leading prospective buyer for a controlling stake in Dairibord Holdings Limited.
He said negotiations were continuing and advised shareholders to exercise caution when dealing in the company’s shares.
“…the board has received a joint notice from three shareholders, namely Equivest Asset Management, Mega Market and Mutare Mart & Exchange, advising that they have entered into negotiations with an unnamed third party regarding the potential acquisition of a controlling block in the company,” Karimupfumbi said.
“Together, they have advised the board that their aggregate shareholding in the company constitutes more than 51% of the company’s issued ordinary shares.”
He added that the proposed transaction, if successfully concluded, “may have a material effect on the market price of the company’s shares.”
Control transactions involving listed companies typically attract intense investor attention because they often pave the way for strategic restructuring, fresh capital injections, management changes and, where required under securities regulations, a mandatory offer to minority shareholders.
For Dairibord, whose portfolio of dairy, beverage and food products commands a dominant position in Zimbabwe’s consumer market, a change in control could usher in a new growth phase as manufacturers position themselves to benefit from improving macroeconomic stability and strengthening consumer demand.
The takeover interest comes as Dairibord is simultaneously pursuing another landmark corporate restructuring after its board approved plans to delist the company from the Zimbabwe Stock Exchange and migrate to the Victoria Falls Stock Exchange (VFEX).
It warned that the proposed delisting and subsequent VFEX listing could materially affect the market price of its shares and urged investors to continue exercising caution pending further announcements.
The planned migration reflects a broader trend among Zimbabwean corporates gravitating towards the United States dollar-denominated bourse, attracted by its foreign currency settlement framework, easier access to offshore capital and growing international investor participation.
Several high-profile companies have either listed or cross-listed on the VFEX in recent years as businesses increasingly align their capital structures with operations that are largely denominated in foreign currency.
Market analysts say the exchange offers compelling incentives, including lower capital gains tax, reduced withholding tax on dividends paid to foreign investors and the ability to raise capital in hard currency. Equally important is the unrestricted repatriation of capital and dividends, a feature regarded as critical by international institutional investors.
For Dairibord, whose operations rely heavily on imported raw materials, packaging and production equipment, a VFEX listing could strengthen access to foreign currency funding while providing a United States dollar valuation benchmark that more accurately reflects the economics of its business.
The convergence of a potential change in control and a planned migration to the VFEX places Dairibord at the centre of investor attention, with the market now awaiting the identity of the mystery bidder, the value of the proposed acquisition and the future strategic direction of one of Zimbabwe’s flagship listed companies.