30/08/2010 Brian Joffe Group CEO of Bidvest presenting their Audited results at Sandton JHB. Photo: Leon Nicholas

Johannesburg - “Buying the shares is the easy part, mending the bridges will be the difficult part,” Bidvest’s chief executive Brian Joffe told Business Report yesterday following the dramatic news that his company now owns an estimated 30 percent of Adcock Ingram.

This development means the current bid by CFR to take control of Adcock, which needs approval of 75 percent of Adcock shareholders, is dead.

Joffe would not provide details or say what he has planned for the Adcock stake.

Analysts said that given the 22 percent stake the Public Investment Corporation (PIC) has in Adcock and its likely support for plans Bidvest might have, it appears impossible for any other party to take a controlling stake in the company.

They noted that while it had still to be confirmed that the 39 million Adcock shares traded yesterday were bought by Bidvest, it seemed that a significant block of Adcock shareholders, possibly including Foord Asset Management, were keen to sell the shares before Bidvest’s offer closed on Tuesday.

Joffe’s comments about mending bridges refers to the outbreak of hostilities between Bidvest and the Adcock board following Bidvest’s unsolicited offer for a 60 percent stake – at R62 a share – in the pharmaceutical company. The offer made last March was rejected by the board as it had “fundamental legal and material prudential concerns” with the unsolicited bid, describing it as “opportunistic” and steadfastly ignored Joffe’s requests that it be presented to shareholders for consideration. The Adcock board said the Bidvest offer did not constitute a firm submission.

At the time, the Adcock board undertook to “consider any initiative, from any quarter, which is made in good faith and which could serve to promote the interests of the Company”.

Adcock’s rejection prompted an irritated response from Bidvest, which said it was “considering its position in relation to the inaccuracies” contained in a letter sent to Adcock shareholders by its board.

In July, Chilean-based pharmaceutical company CFR announced a potential offer to Adcock shareholders for 100 percent of the company at R73.51 a share, which was to be settled in cash and CFR shares. CFR planned to seek a secondary listing on the JSE. The offer had the Adcock board’s support.

The PIC, the single largest shareholder in Adcock, indicated early on it did not find the CFR offer attractive. While CFR’s ambitious plans were welcomed, many shareholders were concerned about the lack of familiarity with the firm.

In a statement released on December 21, the PIC’s Elias Masilela said it opposed the proposed deal for a number of reasons, including that it believed more value could be extracted for shareholders through changes in management. It was also concerned about the structure of the deal and the level of family control.

Tension between Bidvest, CFR and Adcock grew in the months the CFR deal was being finalised. Bidvest initiated legal action, challenging the offer’s legitimacy. Bidvest made a R70-a-share offer to Adcock shareholders, stating it would accept up to 34.5 percent. It expires on Tuesday. This prompted CFR to increase its offer to R74.50. It asked shareholders to adjourn a meeting where they were to vote on the offer. No future date has been specified. - Business Report