Adcock deal: Bidvest 1 – Chilean bidder 0

2014-02-08 16:36

CFR Pharmaceuticals SA, Chile’s biggest drugmaker, called off its R12.8 billion offer to buy South Africa’s Adcock Ingram Holdings after failing to win enough support from shareholders.

The cash and stock proposal needed approval from 75% of investors to succeed, a task rendered hopeless when Joburg-based Bidvest Group built a stake of 34.5% in South Africa’s biggest maker of hospital products last week. Bidvest, an owner of catering and car businesses, is now the biggest shareholder in Adcock and has said it eventually wants control of the company.

CFR’s proposal has “no prospect” of being approved by the necessary 75% majority of shareholders, Adcock and CFR said in a joint statement yesterday, ending a 10-month fight for control of the company.

According to the transaction implementation agreement, any party that terminated the proposed deal before putting it before shareholders would be liable to pay the other party a cancellation fee of R50 million. As both companies agreed to end the talks, that liability won’t be enforced, according to the statement.

Adcock shares have slumped 12% in the past week, heading for the biggest weekly decline since at least September 2008. The stock was little changed at R59.93 at the close in Joburg.

Bidvest made a R6.2 billion offer for a 60% stake in Adcock last March that was rejected by the board. CFR made its first non-binding bid in July as it sought to expand its reach in emerging markets.

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