Merger talks between milk processor Dairibord and Dendairy collapsed on Monday, according to a latest cautionary statement seen by this publication.
Prior to the withdrawal of the cautionary statement, the Zimbabwe Stock Exchange listed Dairibord, had been seeking to acquire and merge Kwekwe-based Dendairy into its own business. The first cautionary statement to shareholders went out in July last year.
In March this year, the Competition and Tariff Commission, which regulates competition in Zimbabwe, said it was waiting for a merger agreement from both milk firms. The two firms happen to be the leading milk processors in Zimbabwe with Dairibord accounting for 40% of the market share and Dendairy serving 32% of the market.
“Dairibord Holdings Limited and Dendairy (Private) Limited have been exploring opportunities for creating sustainable shareholder value for mutual benefit.
“Shareholders are referred to the cautionary announcement first published on 1 July 2020 and are advised that the conclusion of the discussions indicates that it is in the interest of both parties to discontinue the process and remain as separate entities.
“The contents of the cautionary have ceased to have any effect on the company. Accordingly, caution is no longer required to be exercised when dealing in the company’s shares,” said Dairibord.
Dairibord, which is the country’s largest milk processor, has been working flat out to consolidate the market through the so called ‘bluenation’ project. The listed company has been facing competition from Nestle which has been attacking its milk suppliers. Of late, the merger talks have been receiving negative headlines in the market.
Given the environment, experts say, the cautionary statements shows that companies are restrategising. A number of listed companies have issued cautionary statements in the last few months. However, the question still remains on how many will make it through?
On the ZSE, the Dairibord (DZL.ZW) share is currently trading at ZWL$35.0000. The stock has a 52-week high of ZWL$13.1000 and a low of ZWL$0.4275 – Harare