Reuters
SOUTH African firm Bidvest has only raised its stake in Adcock Ingram by 1 percent since launching an offer for the drug maker, a sign that most shareholders are unwilling to accept a R6 billion bid.
Bidvest, a company spanning car showrooms, shipping and catering, agreed to buy out three Adcock investors with a combined 13 percent stake at R52 per share, which would take its stake to 47.5 percent and above a 35 percent bid threshold.
As a result, Bidvest had to offer to buy all the shares in Adcock at the same price, but it said on Thursday it had only acquired another 1.12 percent of the stock in the six weeks since the offer was launched.
The extra shares were bought in the open market at an average price of R51.90 per share.
This price is a 26 percent discount compared to the R70 a share it paid for its initial 34.5 percent stake.
The offer, which has already been extended once, expires on May 18 and Adcock’s second-biggest shareholder after Bidvest, the Public Investment Corporation (PIC), has said it will not sell its shares.
The PIC holds a 22.4 percent stake in Adcock, which is the maker of Corenza flu medicine and Panado pain killers. The PIC and Adcock’s second-biggest shareholder indicated it would not accept the offer.
Bidvest wants to control Adcock so it can build a big presence in the pharmaceutical market, and especially in the market for generic drugs, which is set to grow under a planned national health insurance programme.
It looks unlikely that Bidvest will end up with more than 50 percent of the shares and it is in talks with PIC about creating a pooling agreement under which their shares will be voted as unit.
The industrial group has obtained Competition Commission approval for the proposed deal.
Bidvest will still be allowed to raise its stake above the 35 percent threshold, even if the remaining shareholders reject the offer.
Bidvest has been trying to take control of Adcock since 2013, seeing an opportunity to turn around an underperforming company.
Last Thursday, Adock’s shares on the JSE ended up 0.02 percent at R53.01, which valued the company at R9.3bn, while Bidvest shares closed up 2.14 percent at R322.68. – Additional reporting by Staff Reporter