Adcock likely to delay vote on CFR offer

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Johannesburg - Shareholders attending this morning’s meeting at Adcock Ingram were expected to give approval for the adjournment of the meeting called to vote on the offer from CFR Pharmaceuticals.

The adjournment has been proposed by the Adcock board to give shareholders time to consider CFR’s increased offer.

Half of the shareholders attending the meeting will have to vote in support of the adjournment. Bidvest, which has a 7.5 percent stake in Adcock, has indicated that it would attend the meeting and would not support the adjournment.

It is unclear whether a Public Investment Corporation (PIC) representative will attend and how that representative will vote. The PIC did not respond to Business Report’s request for comment.

One analyst said it would be reasonable for the PIC to vote against the adjournment on the basis that it will continue the uncertainty that has dogged Adcock’s management since March, when Bidvest first made a bid for control of Adcock.

The increased offer, to R74.50 from R73.50 a share, was announced in rather dramatic circumstances at the weekend. The increase was apparently aimed at securing the support of the PIC, which has an effective 19 percent voting stake in Adcock. The PIC’s stake is critical to the success of the CFR bid, which needs support from 75 percent of the shareholders voting at the meeting.

However, the PIC promptly indicated that it was not happy with the increased offer, which it has described as “too low”, and denied that it had ever discussed the matter with CFR.

PIC chief investment officer Dan Matjila referred to CFR as “liars” in one of the weekend papers. This prompted a sharp response from CFR, which described the PIC yesterday as protectionist and called on the state asset manager to “provide a single endorsed view that clarifies the PIC’s institutional position with respect to our offer in the interests of transparency and clarity”.

Yesterday the Adcock share price fell 0.47 percent to R70.14. - Business Report

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