PIC backs Adcock-CFR partnership

Published Apr 9, 2014

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The Public Investment Corporation (PIC) has backed a plan by Adcock Ingram to form a manufacturing partnership with CFR Pharmaceuticals just months after helping to stop a takeover by the Chilean company.

CFR and Adcock were in talks over a manufacturing agreement and had discussed a tie-up on complementary products and areas of duplication, Adcock said yesterday in confirmation of comments made to a newspaper by chairman Brian Joffe.

CFR, Chile’s biggest drug maker, called off its R12.8 billion offer to buy Adcock on February 7, ending a 10-month fight for control after Bidvest Group built up a 34.5 percent stake, enabling it to block CFR’s bid.

The offer was also opposed by the PIC, Adcock’s second-biggest shareholder with a 23 percent stake, which said on January 8 that it would prefer a change of Adcock management.

“The agenda from the Chileans made perfect sense, expanding what Adcock was doing, penetrating new markets,” Elias Masilela, the chief executive of the PIC, said in an interview on April 1.

“If we can get a partner like the Chileans, who can help us access markets, why don’t we partner in Adcock?” he said, while noting that a takeover would have limited South Africa’s benefit from any co-operation.

Adcock named Bidvest chief executive Joffe as its chairman on February 26, replacing Khotso Mokhele, who quit following demands from Bidvest and the PIC. Last week Adcock appointed Kevin Wakeford as chief executive. Wakeford headed Bidvest’s travel and aviation unit for three years before joining Adcock.

Adcock said last month that costs related to the CFR bid would be more than R100 million in the six months to March.

The stock has slid 16 percent this year, and eased 1.25 percent to close at R59.84 yesterday. Aspen Pharmacare’s stock has climbed 2 percent this year. – Bloomberg

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