After buying an 8.5% stake in Dairibord from Equivest Asset Management, the National Social Security Authority (NSSA) is looking to buy the rest of Equivest’s 21% holding in the dairy processor.
The move could potentially set up a competing ownership play as beverage group Varun Beverages pursues a controlling stake in the company.
Alongside Mega Market and Mutare Mart & Exchange, Equivest is part of a three-shareholder bloc that had put its combined stake of about 48.79% in Dairibord on the market, with Varun Beverages as the proposed buyer. Mega Market, led by Mutare businessman Shiraan Ahmed, has steadily increased its stake since acquiring 10% in 2018 and now holds more than 27%.
In September, the Competition and Tariff Commission (CTC) confirmed it was reviewing Varun’s proposed acquisition of the 48.79% stake in Dairibord, Zimbabwe’s biggest dairy producer and a major player in the beverages market. Now, if NSSA buys Equivest’s remaining shares, it could remove a significant portion of the stake Varun was looking to buy, forcing a rethink of how the transaction is structured.
On Friday, NSSA bought 30 434 783 Dairibord shares for around US$7 million. NSSA general manager Charles Shava says the Authority wants more, attracted to Dairibord’s potential to pay dividends.
“We bought (Dairibord shares) because we believe Dairibord is a very good asset for us,” Shava says. NSSA is restructuring its portfolio to focus on dividend-paying assets, while shedding those that don’t. “As a social security scheme, we depend on liquidity. We always want liquidity to be able to pay our pensioners.”
On the possibility of acquiring Equivest’s remaining shares, Shava told The Business Times: “We are yet to discuss that (buying the remainder of the shares) issue at the top level but, given the fruitful discussions we had on the 8.5% shareholding, there is a possibility of acquiring the whole stake it controls in Dairibord.”
