Adcock considering Chilean offer

The South African pharmaceuticals company has confirmed it is considering a major deal with CFR.

Pharmaceuticals company Adcock Ingram held off a hostile takeover by Bidvest earlier in the year.

JOHANNESBURG - It was confirmed on Wednesday that a family-owned Chilean company has laid down an offer to buy pharmaceutical firm Adcock Ingram.

Adcock refused an offer by Bidvest a few months ago, but the cash and share offer made by CFR Pharmaceuticals has caught their attention.

Adcock Independent Director Andrew Thompson spoke to The Money Show's Bruce Whitfield on Wednesday night.

He said the offer value of R73,50 was a major factor.

The fact that CFR is very strong in Latin America and has presence in South East Asia meant that there was a "very compelling footprint in emerging markets" when combined with Adcock's expansion into East Africa and India.

He said the product range was also very complimentary.

Overall, Thompson said, "We believe the whole can exceed the sum of the parts."

Asked about the actual proportions of cash and shares respectively, Thompson said it was not yet defined.

"What we have accepted is a logical need for CFR to place some additional equity to write the cash portion of the 'cheque', but still for some of the considerations to be settled in the form of shares."

Thompson said when final details are completed, Adcock's shareholders would likely be interested.

"We believe that our shareholders, when we give them the full information, should find the opportunity to invest in the enlarged and combined entity. It is worth thinking about."

He said the full details would be released over the coming weeks and shareholders would be given "the democratic right they are entitled to."

He added that the deal would allow Adcock to expand further into the global market, with CFR's track record of growth being "enviable", the move would likely bode well for the company.

With the need for 75 percent of shareholders to agree with the deal, he said there was a lot of work to be done.