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Adcock Ingram Chairman Resigns Following Shareholder Demands

Adcock Ingram Holdings Ltd., South Africa’s biggest maker of hospital products, rose the most in more than three months after Chairman Khotso Mokhele resigned following demands from the two biggest shareholders.

Letters from Bidvest Group Ltd., an owner of catering and car businesses, and the Public Investment Corp., manager of South African civil servants’ pension funds, also stipulated that Bidvest Chief Executive Officer Brian Joffe be appointed as an Adcock director. The two companies own a combined 56 percent of Adcock after a 10-month fight for control of the company with Chilean drugmaker CFR Pharmaceuticals SA.

Adcock shares climbed as much as 3.5 percent, the biggest intraday gain since Nov. 15, and traded 2.4 percent higher at 58 rand as of 12:31 p.m. in Johannesburg, paring the decline this year to 18 percent.

“The resignation is definitely seen as positive,” Mathew Menezes, an analyst at Avior Research, said in a phone interview. “It shows that Bidvest is getting involved early to bring change in the company.”

CFR, Chile’s biggest drugmaker, called off its 12.8 billion rand ($1.2 billion) cash and stock offer to buy Adcock on Feb. 7 after Bidvest built up a 34.5 percent blocking stake. The CFR deal, valued at 74.50 rand to 75.78 rand a share and supported by the Adcock board, was opposed by the PIC, which said Jan. 8 it would prefer a change of Adcock management.

Urgent Meeting

The Adcock board held “an urgent meeting yesterday afternoon,” following the letters of demand, according to a statement today. The board will meet in the next few days to appoint a new chairman, it said. A shareholders meeting will be called by March 4.

A consortium led by Bidvest offered 70 rand per share for 34.5 percent of Adcock on Dec. 2, a deal that convinced many shareholders to sell out. Joffe has said he eventually wants control of the maker of Panado painkillers and Corenza cold medicine. CFR raised its offer for Adcock by 2 percent on Dec. 13 to no avail.

Adcock shares have dropped about 17 percent since Bidvest announced on Jan. 31 it owned 34.5 percent of the company and closed its 70 rand a share offer.

Bidvest made a 6.2 billion-rand bid for a 60 percent stake in Adcock last March that was rejected by the board. CFR made its first non-binding bid in July as it sought to expand its reach in emerging markets.

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