Bidvest defends offer legitimacy

Drug maker’s board of directors accused of misleading shareholders about bid

INDUSTRIAL group Bidvest reassured Adcock Ingram’s shareholders that its offer to buy the drug manufacturer was firm and legitimate and that the Adcock board had misled them.

INDUSTRIAL group Bidvest yesterday reassured Adcock Ingram’s shareholders that its offer to buy the drug manufacturer was firm and legitimate, and that the Adcock board had misled them.

Bidvest has said it wants to take over SA’s second-biggest drugs firm and turn it into a powerhouse

Bidvest CE Brian Joffe sent a letter late last month in which he proposed that his group buy a 60% controlling stake of Adcock for R6.2bn. On Tuesday, Adcock chairman Khotso Mokhele said in a statement that the letter was not from the Bidvest board and was, as such, a nonbinding proposal.

But yesterday, Bidvest fired back in a statement on the JSE’s share network service. “The firmintention letter was approved by the Takeover Regulation Panel (TRP) on March 18 2013 prior to its submission to the board of directors of Adcock,” it said.

An irrevocable, unconditional guarantee for the cash component of the offer was also lodged with the TRP in accordance with the regulations in terms of the Companies Act.

Mr Joffe said Adcock’s management had made various errors in accusing Bidvest of making technical mistakes in its scheme of arrangements offer.

Bidvest urged Adcock’s shareholders to stand up to their board. “Bidvest still believes that Adcock shareholders be given the opportunity to vote on the offer contained in the firm-intention letter,” the industrial group said.

“Shareholders are advised that Bidvest is considering its position in relation to the issues raised and inaccuracies contained in the aforementioned response.”

Mr Mokhele called the bid “opportunistic” on Tuesday.

Vestact analyst Sasha Naryshkine said that Mr Joffe might have started his bidding low. “Of course, Adcock wants more, but it is clear that the Bid- vest bid was opportunistic.

“I don’t think that this is the end of it, but I doubt that Bidvest will budge much higher than this — that is not their style. This is a firm offer.”

Sasfin analyst David Shapiro said Adcock was trying to sabotage the bid. “Clearly, Adcock didn’t want to go to shareholders when it should because it needs a company like Bidvest to boost its fortunes.”

He has criticised Adcock CEO Jonathan Louw’s performance since Adcock was unbundled in 2008 from Tiger Brands. “They have not made notable buys and Jonathan’s management team has not done much with a company whose share price has done little over the last two years or more.”

Mr Louw could not be reached for comment.