All hail Brian
SO WHY BUY a continually underperforming pharmaceutical company when the idea is to always buy winners? The answer is simple: Brian Joffe. Joffe, via his Bidvest consortium (which includes CIH), now has just over a third of Adcock at R70 per share and you can be very sure he’ll want to make money off this investment.
The reality is that he may fail (unlikely but possible) and he doesn’t have effective control, but the 34.5% stake makes him the largest shareholder and hence he has negative control. Taking the PIC into account, it has +50%, albeit it has to be careful to not be working in consort otherwise it may be deemed to have collectively crossed the 35% level that would require an offer to minorities.
Many will suggest that buying Bidvest is a much cleaner way of benefitting from the business ability of Joffe and while that is largely right, Bidvest’s size means that it has to be a massive deal to move the needle.