PIC wants Adcock to stay in local hands

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Fin24/ Reuters - Jul 23rd, 08:56

Johannesburg - The top shareholder in Adcock Ingram said it would prefer a local buyer for the country's second-biggest drug maker over a $1.3bn bid from Chile's CFR Pharmaceutical. 

Santiago-based CFR this month made a cash and share offer to acquire all of Adcock's shares at R73.51 each, a 14% premium to Adcock's closing price before the deal was announced.

The Public Investment Corporation (PIC), which manages the pension of government employees and owns about 14% of Adcock, said it would prefer a buyout by a local player.

"We would be willing to consider a strategic partner/investor if a cash offer is for a 50%+1 control of Adcock while the balance of the company remains in local hands," Dan Matjila, the PIC's chief investment officer, told Reuters in an e-mail late on Friday, adding the PIC is not favour of exchanging its Adcock shares for CFR shares.

CFR has yet to give details on the amount of cash and shares it would offer, making it difficult for some shareholders to confidently make a call on its value.

"It's difficult to comment on the offer price because we don't have the ratio of how much equity is being offered versus the cash component," said Chris Wood, a fund manager at Prudential Portfolio Managers, the second biggest shareholder in Adcock with about 7% stake.

"But in terms of the strategic merits, we're very much in favour of the deal. There are clear synergies between the two companies."From Fin24.com