Johannesburg - Bidvest chief executive Brian Joffe held out the possibility of some future arrangement between Adcock Ingram and CFR Pharmaceuticals on Friday following the release of a joint announcement that the drug makers had abandoned their proposed transaction.
Responding to queries from Business Report, Joffe said he had no comment on CFR’s decision to walk away from the bid but added: “Maybe our paths will cross, you never know.”
And in an apparent reference to CFR chief executive Alejandro Weinstein, Joffe said: “He is a very decent man.”
Analysts said Joffe’s comment, which contrasted with the acrimony evident during much of the seven-month control battle, reflected the potential synergistic benefits of CFR’s proposals for Adcock. “CFR had some exciting plans for Adcock. The problem was the way the deal was going to be financed and the involvement of a secondary listing for CFR on the JSE,” said one.
The prospects of a tie-up in the future were reinforced by comments by Weinstein quoted in The Sunday Times: “We believe both companies (CFR and Adcock) will be able to explore other ways to realise the significant synergies we have identified, directly benefiting all shareholders.”
During the bidding war, Joffe had indicated that if he did secure control of Adcock he would look to form strategic alliances with pharmaceutical companies across the globe.
The goal for all parties concerned is the creation of a substantial emerging market pharmaceutical player with the sort of muscle and earning power displayed by Aspen.
However, analysts cautioned that any move would be some months away as Joffe did not have control and had yet to decide whether to make an offer for control.
At this stage, Joffe has only indicated that he wants representation on the board.
On Friday, as the Adcock share price drifted back towards levels not seen since Joffe launched his surprise bid for the company in March last year, CFR and Adcock issued a statement acknowledging that there was “no prospect” that their proposed transaction would get the necessary support from shareholders.
The share closed 1c down at R59.93 on Friday as investors continued to absorb not only the collapse of the CFR transaction but also the considerably worse-than-expected trading update released a week earlier at the Adcock annual general meeting. The board told shareholders that earnings a share for the six months to end March 2014 would be down by at least 20 percent.
While the weaker rand is likely to have played a major role in the poor performance, analysts said it was evident that the controversial transaction had taken management’s eye off the ball.
Friday’s announcement was little more than a formality in the wake of the dramatic disclosure by Bidvest at the beginning of the week that it had built up a stake of 34.5 percent in Adcock.
As the CFR proposal required the support of 75 percent of Adcock shareholders, Bidvest’s stake was sufficient to kill the transaction. - Business Report