A bit­ter pill to swal­low

But Ad­cock wants an­swers

Finweek English Edition - - Companies & Markets -

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

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