A bitter pill to swallow
But Adcock wants answers
questioned the dramatic and sudden change in tone of Lulla’s initially positive remarks made in various Indian media and the hard line he took later in a letter to CEO Jonathan Louw, in which Lulla stated unequivocally he wouldn’t support the deal under any circumstances.
Kagiso Asset Management head of research Abdul Davids – the company holds 7% of Cipla Medpro on behalf of clients and opposed the takeover at 475c – declined to comment on allegations of a poison pill, as Kagiso had no sight of the supply agreement.
However, Davids says: “The current Adcock financial director was previously employed by Cipla and hence should be aware of the contents of the supply agreement. Thus, if there was a poison pill clause in the supply agreement, Adcock should have been aware of it before embarking on its bid for Cipla.”
That raises questions as to whether a written provision actually exists. When Finweek asked Smith about the existence of any such agreement, he replied cautiously: “It would depend on who the suitor is.”
While Adcock CEO Louw boldly maintains pursuing the deal is no longer worth the trouble, it does leave the firm with challenging prospects. Cipla Medpro was an attractive
Taking it further. Jonathan Louw