Johannesburg - Adcock Ingram shareholders may see some progress in the controversial bid for control of the pharmaceutical company in the coming weeks with reports from Chile-based CFR Pharmaceuticals that it will decide within weeks whether to make a binding offer for the JSE-listed company.
However, local analysts said yesterday that even if CFR decided to make an offer, it was unclear what other bidders such as Bidvest and Actis would do in response.
The Adcock share price has remained below the “potential offer” announced by CFR in July. This is seen as an indication that Adcock shareholders are not enthusiastic about the offer, which is valued at R73.51 a share and comprises a combination of cash and CFR shares. If the deal is successful, Santiago-listed CFR will seek a secondary listing on the JSE.
Analysts said yesterday that if CFR decided to proceed with an offer it would be under pressure to make it more attractive or risk Bidvest and/or Actis coming in with a counter-offer.
Yesterday, Bloomberg reported from Chile that CFR had completed its due diligence of Adcock in mid-August and chief executive Alejandro Weinstein said it was now “doing a thorough review of all data to see if we move to the next binding step”.
Adcock granted CFR an exclusive arrangement, which not only meant that it had access to due diligence documents but also had access to board members. Other bidders, including Actis but not Bidvest, have also had access to due diligence documents.
Bidvest chief executive Brian Joffe told Business Report last week that his company had not had access to the due diligence process. This lack of access appears to be due to a fundamental disagreement between Bidvest and Adcock over the status of the offer made by Bidvest in March.
On May 9, Adcock’s board issued a Stock Exchange News Service announcement in which it noted: “The board advises shareholders that no new proposal has been received from the Bidvest Group since its original proposal, submitted to the board on March 22, 2013, which lapsed on April 2.”
However, Bidvest is adamant that its offer has not lapsed. Last week Joffe told Business Report that the Bidvest offer was the only firm offer on the table.
Weinstein told Bloomberg that he was happy that there were other bidders.
“If there are other bidders it is a good sign. It means that we are aiming for something good. I would be more concerned if there weren’t other interested parties.”
The Adcock share price lost 10c to close at R66 yesterday. - Business Report