Bidvest makes $515m bid for rest of Adcock Ingram

Bidvest CE Brian Joffe has been trying to take control of Adcock since 2013.


JOHANNESBURG South African conglomerate Bidvest has offered about $515 million for the shares it does not already own in Adcock Ingram in a new attempt to take over the drug maker which has a big presence in the local pharmaceutical market.

Bidvest Chief Executive Brian Joffe, one of South Africas major dealmakers, has been trying to take control of Adcock since 2013, seeing an opportunity to turn around an under-performing company and add painkillers and cough syrups to his stable of products.

Last year, Joffe sank a R12,8 billion, or R74,5 per share, rival takeover offer for Adcock from Chiles CFR Pharmaceuticals by building a blocking stake that gave his company its current holding of 34,5 percent.

In March 2013, he had offered a 10 percent premium for a 60 percent stake in Adcock, a bid spurned by Adcock's board at the time as opportunistic.

Under the latest proposal, Bidvest would pay R52 per share, which represents a 3,6 percent premium to Adcocks closing price on Friday. The offer would value the company at around R9,1 billion. This would be 9 percent below the company's enterprise value of about R10 billion, according to Thomson Reuters data.

The deal would give Bidvest a substantial presence in the generic market, which is set to take off as the government prepares a national health insurance plan which relies on the use of cut-price versions of branded drugs.

Adcock is trailing rivals as it struggles with slowing sales, over-reliance on a heavily regulated home market and factories that are running below capacity.

Joffe has a record of buying under-performing companies and turning them around by focusing on cash flow, capital allocation and improving distribution. Bidvests activities span shipping to catering.