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Adcock’s Biggest Shareholder Said to Seek Higher All-Cash Offer

Adcock Ingram Holdings Ltd. (AIP)’s largest shareholder is seeking an all-cash offer of as much as 74 rand ($7.04) a share as Bidvest Group Ltd. (BVT) and CFR Pharmaceuticals SA (CFR) compete for control of the South African drugmaker, according to a person familiar with the matter.

While the Public Investment Corp., South Africa’s state-owned pension fund manager that holds a 19 percent stake in Adcock, is encouraged by Bidvest’s cash offer, it probably won’t support a 70 rand a share bid as it undervalues the company, said the person, who asked not to be identified because the discussions are private.

The PIC said on Nov. 6 it won’t support a 12.6 billion-rand cash and stock offer from CFR, Chile’s biggest drugmaker, that values Johannesburg-based Adcock’s shares at about 73.51 rand. Bidvest is offering 4 billion rand for a 34.5 percent stake.

Attempts to wrestle control of Adcock started in March, when Bidvest offered to pay about 6.2 billion rand in cash and shares for a 60 percent stake. Since then, CFR emerged as the most likely suitor by fending off interest from London-based private equity firm Actis LLP and securing the support of Adcock’s board.

The transaction is now embroiled in legal action after Bidvest filed a complaint regarding the financing of CFR’s proposal. CFR needs a guarantee from Adcock to finance a loan required to complete the potential deal, Bidvest said in a document lodged in the High Court in Johannesburg on Dec 3. Provision of that guarantee would be “unlawful,” Bidvest said in the document.

CFR is confident the offer complies with local laws, Chief Executive Officer Alejandro Weinstein said on Dec. 3.

Adcock’s shares rose 0.5 percent to 70.60 rand as of 10:30 a.m. in Johannesburg, taking it’s gain to 1.9 percent since CFR announced its takeover bid.

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: Kenneth Wong at kwong11@bloomberg.net

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