Bidvest Filed Legal Action Against Adcock Regarding Deal Finance

Bidvest Group Ltd. (BVT), a South African company with operations from car sales to electricals, said it filed a legal complaint against drugmaker Adcock Ingram Holdings Ltd. (AIP) today regarding the financing of a proposed takeover by Chile’s CFR Pharmaceuticals Ltd.

CFR said Nov. 15 it made a 12.6 billion rand ($1.2 billion) cash and stock offer for Johannesburg-based Adcock, which shareholders will vote on later this month. Bidvest said yesterday it would offer 70 rand a share in cash for a 34.5 percent stake and start legal proceedings.

CFR needs a guarantee from Adcock to finance a loan required to complete the deal, Bidvest said in a legal document lodged in the high court today. Provision of that guarantee would be “unlawful,” the document said.

“You cannot use the assets of the target company to finance the transaction,” Bidvest Chief Executive Officer Brian Joffe said in an interview today. “We have a very strong opinion from senior counsel and what they’ve done is illegal.”

A spokeswoman for CFR said the company couldn’t comment as it hadn’t seen the legal proceedings. A spokeswoman for Adcock declined to comment.

To contact the reporters on this story: Christopher Spillane in Johannesburg at cspillane3@bloomberg.net; Janice Kew in Johannesburg at jkew4@bloomberg.net

To contact the editor responsible for this story: David Risser at drisser@bloomberg.net

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