It is now five months since Bidvest launched its bid for Adcock Ingram and shareholders of the pharmaceutical company appear to be no closer to receiving an offer from any one other than Bidvest.
So far, in this long, drawn out corporate saga, the only thing that has been done with speed was the rejection of Bidvest’s approach by Adcock’s “independent” board. Perhaps what was also done quite speedily was the granting of an “exclusive” arrangement to Chilean-based pharmaceutical company CFR. This allows the South Americans to look through Adcock’s due diligence documents and also to engage with the board.
But several weeks later, Adcock shareholders have still heard nothing firm about the R73.51 a share “potential offer” from CFR. It appears that there is no deadline for the period of exclusivity that has been granted by CFR, which seems a bit oppressive on the Adcock shareholders.
Depending on what happens to the relative valuation of the two currencies, the delay probably works in CFR’s favour as it gives Adcock shareholders more time to familiarise themselves with what was a virtual unknown entity until early July.
The latest party to throw its hat into the ring is London-based private equity group Actis. Last month Bloomberg reported that Actis had indicated an offer of R70 a share and was conducting a due diligence on Adcock.
If firm offers are made by Actis and CFR, it will mean that Adcock shareholders have the full gamut of possible structures from which to choose. CFR offers a tie-up with an industry player with potential for growth across several emerging markets and a primary listing in South America; Bidvest offers Adcock shareholders the opportunity to keep some direct exposure to their company, as well exposure to a diversified operator with a primary listing in South Africa; and Actis will probably want to buy out shareholders totally.
Consumers struggling to deal with debt shrugged off the bad stigma and headed to seek debt counselling. Debt counselling is one of the ways in which consumers who are drowning in debt can manage to survive the credit crackdown.
The latest figures from the SA Reserve Bank reveal the disparity between household savings rate, which is at 1.75 percent, and household debt, which stands at 75.4 percent of disposable income.
The chief executive of DebtBusters, Ian Wason, said he had seen an exponential increase in the number of people who sought his help. “People are just borrowing more and more money to keep their heads above water,” Wason said. He added that it was the classic case of “borrowing from Peter to pay Paul”.
Wason said there was a stigma attached to people who went to debt counselling. They were seen as being reckless with their money, he said. “That’s not the case; its just good people in bad times.”
Retailers such as Shoprite, Edcon and Truworths noted retailers were under pressure and this was reflected in their financial statements. Inflation breached the Reserve Bank’s 6 percent upper target in July and growth is low. By all indications the harsh credit environment is unlikely to get better for consumers in the near future.
Wason said his average client had about 12 credit agreements, of which most were usually in arrears by a couple of months. He said most of his business was done over the phone as clients found it was a “humbling experience” to have someone go through their finances in such depth.
The private sector should brace itself for more opportunities to participate in offering services throughout all South African ports. Although the building of port infrastructure falls under the Transnet National Ports Authority’s (TNPA) mandate, the authority would be putting out tenders for companies that want to build new terminals and offer services for sectors such as oil and gas.
“The private sector can come in and invest in terms of building the terminals. We can build the key walls and then they come in and build super structures in terms of equipment to operate the terminal,” TNPA chief executive Tau Morwe explained during the African Ports Evolution forum in Cape Town yesterday.
He said since the implementation of the National Ports Act, which only began to configure the TNPA’s role last year, terminal and new port services would be put out to tender. Certain existing terminals such as the liquefied petroleum gas facility in the Port of Saldanha Bay would also be operated by the private sector. In the Port of Ngqura, the TNPA has issued a licence for the private sector to build a liquid bulk terminal after it had just put out a tender to the container terminal.
“It’s not really a joint-venture type of partnership; it’s bringing the private sector into the ports because prior to the implementation of the National Ports Act, the only big player in the ports was the then PortNet.
“But we have not, as a port authority, looked at partnerships in terms of creating the ports infrastructure, building ports and so forth. It’s an area that we need to be very careful in because we’ll end up with [private sector domination] if we now start privatising the ports,” Morwe said.
He also said they were looking to get the private sector involved in the manufacturing of a truck fleet for the TNPA.
Morwe said all Transnet’s operating divisions had arrangements to get more private sector involvement in so that the future was more promising for businesses that wanted to get involved.
“If you look on the rail sector, they are also looking at [working] closely with the private sector… In the future, I see a rail operation where [Transnet] will possibly bring the private sector to run slots on a network that is still owned by Transnet. If you want to run a container train, I see a future there,” Morwe said. page 18
Edited by Banele Ginindza. With contributions by Ann Crotty, Zandi Shabalala and Londiwe Buthelezi.