Photo by: Reuters
JSE-listed Adcock Ingram has resolved to terminate its existing black economic-empowerment (BEE) transaction and replace it with a new, more sustainable BEE structure.
The company noted that, given its depressed share price, the Adcock A and Adcock B ordinary shares held by BEE shareholders were unlikely to realise any value.
The existing BEE participants, which included Blue Falcon Trading 69 and the Mpho ea Bophelo Trust would now enter into an agreement with JSE-listed Bidvest Group to sell the 2.57-million dividend shares at a price of R52 apiece.
Following the termination of the existing BEE deal, Adcock ordinary shareholders would facilitate the introduction of a 15% to 30% BEE shareholding through a new entity to be established, currently valued at between R1.29-billion and R2.57-billion.
In a statement, Adcock reiterated its commitment to broad-based BEE, stating that the new BEE transaction positioned the company for improved participation in private and public sector opportunities, thereby providing an enhanced platform for growth.
“The new transaction will not result in any encumbrance on the Adcock balance sheet and enables us to continue to build on our BEE track record,” the company said.
Adcock further noted that the new transaction would enhance its BEE ownership profile and strengthen its position to secure new business.
The new BEE partner would, with effect from May, acquire between 15% and 30% of the issued ordinary share capital of Adcock, excluding all distributions, until or about May 2019.
“Should the scheme be implemented, the scheme vendors would be required to dispose of, at their own election, a minimum of 15% and up to a maximum of 30% of their Adcock ordinary shares in exchange for Newco Securities,” Adcock said.
As a further term of the scheme, Adcock will grant the right to all vendors to acquire about eight-million new Adcock ordinary shares at a strike price of R72 per Adcock option in May 2019.
Meanwhile, Bidvest, which held a 34.5% interest in Adcock, reported that it had agreed with Blue Falcon and the Bophelo Trust to buy their dividend shares, but said it required these shares to be released from the restrictions contained in the existing Adcock BEE transaction.
It would also offer to buy the shares held by Adcock ordinary shareholders at R52 a share.
The proposed offer was expected to provide Adcock ordinary shareholders with certainty regarding Bidvest’s intention to buy out Adcock shareholders.
Bidvest said it had already obtained competition authority approval for the buyout.