Adcock’s biggest shareholder said to seek higher cash offer

Adcock Ingram Holdings's largest shareholder is seeking an all-cash offer of as much as R74 a share as Bidvest Group and CFR Pharmaceuticals compete for control of the South African drugmaker, according to a person familiar with the matter.

While the Public Investment Corporation (PIC), South Africa's state- owned pension fund manager that holds a 19% stake in Adcock, is encouraged by Bidvest's cash offer, it probably won't support a bid of R70 a share as it undervalues the company, said the person, who asked not to be identified because the discussions are private.

The PIC said on November 6 it won't support a R12.6-billion cash and stock offer from CFR, Chile's biggest drugmaker, that values Johannesburg-based Adcock's shares at about R73.51. Bidvest is offering R4-billion for a 34.5% stake.

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

The transaction is now embroiled in legal action after Bidvest filed a complaint regarding the financing of CFR's proposal. CFR needs a guarantee from Adcock to finance a loan required to complete the potential deal, Bidvest said in a document lodged in the high court in Johannesburg on December 3. Provision of that guarantee would be "unlawful", Bidvest said in the document.

CFR is confident the offer complies with local laws, chief executive Alejandro Weinstein said on December 3. – Bloomberg

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