Adcock is keeping its options open

THE second-biggest drug maker in SA, Adcock Ingram, appears to be waiting for a more attractive takeover bid than the one offered by Bidvest last month.

Brian Joffe and the company he founded, Bidvest, are in the business of takeovers.

Bidvest hardly ever fails to get what it wants.

If it does not it is because it misjudged the market and offered too little, not because it made rookie technical mistakes. So why then did Adcock say on Tuesday it would not consider Bidvest’s offer because of a technicality? Adcock’s chairman, Dr Khotso Mokhele, said Joffe, CE of Bidvest, sent a letter to Adcock detailing an offer worth some R6.2bn for a 60% controlling share.

But he said Bidvest’s board needed to make the offer, and as such the letter was a nonbinding proposal.

Adcock would consider a new proposal from Bidvest if Bidvest’s board made it. Other companies are welcome to make offers, he says.

Is this a stalling tactic by Adcock? Is it possible the company has received other offers already? It is unlikely that another player could have mounted a bid in the short time between Bidvest making its original offer and Adcock responding.

Perhaps Adcock is trying to generate interest from other players to up its price tag.

Joffe says he cannot comment in detail yet, but says Adcock has its facts wrong. Maybe he has read between the lines and Bidvest will make a higher offer. ing middle class is demanding services and goods that weren’t previously available.

Those in the increasingly competitive fast-moving consumer goods market such as Unilever, Procter & Gamble (P&G) and Nestlé are ideally placed. Many of their products have only been available to European and US markets, but are now making their way to places such as Lagos, Rio de Janeiro and Chennai, where shoppers are ready to snap them up.

Unilever is taking its Magnum ice-cream bars to India this month. The company is confident the brand will be a success, as it has been in Indonesia, where it is one of the bestselling ice creams despite its premium positioning. In Africa, Unilever aims to double its €3bn annual sales within five years.

Meanwhile, P&G, the company behind Pantene, Oral-B and Gillette, plans to build a R1.6bn manufacturing plant in SA, which will be its hub for east and southern Africa.

And despite a slowdown last year in the emerging markets that it operates in, Nestlé is still enhancing its product offerings. For Nestlé, emerging markets now account for over 40% of sales.

Nick Wilson edits Company Comment (wilsonn@bdfm.co.za)