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CFR: Opposition to Adcock offer is to deter foreign buyers

Chris Spillane

The drawn-out battle for Adcock now sees CFR's offer for Adcock now facing resistance from the PIC, which says the offer is not up to scratch.

Attempts to wrestle control of Adcock started in March, when Bidvest offered to pay about R6.2-billion in cash and stock for a 60% stake. (Gallo)

CFR Pharmaceuticals South Africa, Chile's largest drugmaker, said the Public Investment Corporation's (PIC) opposition to its R12.8-billion  takeover of Adcock Ingram Holdings is for nationalist reasons.

"The impression created is that the criticisms levelled at our effort by the PIC have little to do with commercial merits and are instead intended to allow a local buyer to succeed over a foreign buyer," CFR chief executive Alejandro Weinstein said in a statement on Tuesday.

"None of our engagements with the PIC have concluded satisfactorily and the messages we have received have been mixed and confusing." CFR raised its offer to buy Johannesburg-based Adcock by 2% last week. The bid, a minimum of 50% of which would be paid in cash, values each share in the company at R74.50 to R75.78, Adcock said.

Attempts to wrestle control of Adcock started in March, when Bidvest offered to pay about R6.2-billion in cash and stock for a 60% stake. Since then, CFR emerged as the most likely suitor by fending off interest from London-based private-equity company Actis LLP and securing the support of Adcock's board.

The PIC, a manager of South African civil servant pension funds and the owner of almost 20% of Adcock, won’t support CFR’s proposal as it "greatly undervalues Adcock", and is seeking legal advice about the revised bid, chief investment officer Daniel Matjila said in a December 13 interview.

"We have not discussed or received any formal feedback from the PIC on our revised offer," Weinstein said in the statement. "We last met with Matjila in August 2013. During these meetings, Matjila did not raise any concerns around price or valuation of our then proposed offer but focused rather on other aspects", including the black economic empowerment elements, he said. – Bloomberg

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