Bidvest Group, a South African company with operations from car sales to electricals, said it filed a legal complaint against drugmaker Adcock Ingram Holdings on Tuesday regarding the financing of a proposed takeover by Chile's CFR Pharmaceuticals.
CFR said on November 15 it made a R12.6-billion cash and stock offer for Johannesburg-based Adcock, which shareholders will vote on later this month. Bidvest said on Monday it would offer R70 a share in cash for a 34.5% stake and start legal proceedings.
CFR needs a guarantee from Adcock to finance a loan required to complete the deal, Bidvest said in a legal document lodged in the high court on Tuesday. Provision of that guarantee would be "unlawful", the document said.
"You cannot use the assets of the target company to finance the transaction," Bidvest chief executive Brian Joffe said in an interview on Monday. "We have a very strong opinion from senior counsel and what they've done is illegal."
A spokesperson for CFR said the company could not comment as it had not seen the legal proceedings. A spokesperson for Adcock declined to comment. – Bloomberg