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DZL divestment was long in coming

DAIRIBORD Zimbabwe Ltd (DZL)’s decision last week to divest from Interfresh could be seen a mile away but the wheels turned very slowly for an expectant market.

Even stockbrokers had been keeping fingers crossed in the hope that when DZL’s Interfresh shares eventually found their way onto the market they would land in their hands.
DZL would be happy after the parcel valued at US$800 000 was snapped up at a 100% premium compared to the closing price of half a cent on the day of trade.
After acquiring an 18% stake in premiere horticultural group a few years back, the group had sought board representation at par with its shareholding — three board seats.
The bid failed after other shareholders voted against the resolution to appoint new directors. And so began the market’s long wait for the group to divest.
So when a parcel of 80 million shares came to the market, it was clear who the seller was.
Although DZL chief executive officer Anthony Mandiwanza refused to comment, he was not happy when Interfresh shareholders ganged up on him and blocked them from the board.
The diversified group’s buy made sense too. Interfresh was into roses and owned the most productive citrus farm in the country feeding citrus syrups, not only to Lyons, a beverage maker, but to other players such as Schweppes Zimbabwe.
The deal would have given DZL easier access to elusive foreign currency.
Delta had made a takeover offer for Ariston and got control of the company. But unlike the Delta deal, in the DZL-Interfresh one, no one was willing to sell.
And it seemed no amount of sweetening would have changed the shareholders’ minds. Delta never made the offer anyway.
So began the curious case of a shareholder with 18% of a company’s issued share capital without board representation.
In the past, British investor Nicholas Van Hoogstraten sold his 33, 3% stake in various companies where he had no control.
But unlike DZL, he would get his people on the board. Just last year, Van Hoogstraten sold his stake in Rainbow Tourism Group (RTG) after other shareholders voted against his resolutions except one. Van was the single largest individual shareholder in RTG through his investment vehicle.
He had tried to fire the board, its chairperson and chief executive officer alleging incompetence, among other things. The chairperson resigned while another shareholder curiously sided with Van Hoogstraten to remove lawyer Canaan Dube from the board. That must have appeased a bitter Van Hoogstraten then.
Many others have over the years opted out of other businesses because of the same reasons. Van Hoogstraten called it quits after realising one thing; his will could not be done.
But unlike Van Hoogstraten, who does not waste any time, DZL kept holding on to the shares after getting the message. Earlier he had sold his stake in NMB after failing to exercise control.
Econet founder Strive Masiyiwa, analysts say, manages corporate politics rather better. He has succeeded where Van Hoogstraten has failed after he picked up the British shares and all seems to be going well now.
Analysts say Van Hoogstraten and DZL had proved to be poor corporate politicians who failed to make allies on the board. In the case of DZL, analysts say the company underestimated other shareholders the same way Van Hoogstraten tried to bully the RTG board and learnt the hard way.


Chris Muronzi

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