JSE-listed Bidvest’s move to challenge Chile-based CFR Pharmaceutical’s R12.8-billion bid for 100% of pharmaceuticals group Adcock Ingram through the acquisition of a further 22% stake in Adcock has put Bidvest in a position to reject the disputed deal.
The buy-out of a further 39-million shares in Adcock at about R70 apiece – as disclosed in Bidvest’s December proposal – increased Bidvest’s stake from 4% to 34.5%.
Following an unsuccessful R6.2-billion bid to raise its stake in Adcock to 60% last year, the diversified group, in collaboration with Community Investment Holdings, unconditionally offered in December an immediate cash consideration of R70 a share.
“[Bidvest] now holds [over 30%] of Adcock Ingram ordinary shares [and] is in a position to unilaterally block the approval of the scheme,” Adcock chairperson Khotso Mokhele said on Friday.
CFR needed to obtain 75% approval from Adcock shareholders.
The Public Investment Corporation and Bidvest had each publicly expressed their opposition to the proposed deal between Adcock and CFR.
“In the circumstances, the independent board cannot envisage a realistic basis on which the scheme will be approved,” Mokhele said.
However, Adcock and CFR remained “bound in terms of the transaction implementation agreement (TIA)” signed in September to take the deal to shareholders for consideration.
Adcock planned to “urgently” engage CFR on the implications of Bidvest’s increased stake for the scheme and the TIA.