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Adcock Reports Loss After Failed Takeover Bid Takes Toll

Aug. 28 (Bloomberg) -- Adcock Ingram Holdings Ltd., South Africa’s largest supplier of hospital products, posted a nine-month loss amid changes being made to the structure of the business after a failed takeover bid.

The loss per share, excluding one-time items, was 1.80 rand in the nine months through June, compared with a profit of 2.72 rand a year earlier, the Johannesburg-based company said today in a statement. Sales were little changed at 3.6 billion rand ($343 million).

“We believe that to reorganize this business is appropriate because that way we can focus on growing our top line to compensate for the cost increases that we’re experiencing,” Chief Executive Officer Kevin Wakeford said by phone today. “I’m not expecting any quick fixes,” Wakeford said. “We are going to give the changes a little bit of time to gain traction in the market.”

Adcock was the subject of a 10-month battle for control after profit margins came under pressure from rising production costs and a weaker rand in 2012. CFR Pharmaceuticals SA, Chile’s biggest drug maker, called off a 12.8 billion-rand cash and stock offer to buy Adcock after Johannesburg-based Bidvest Group Ltd. built a blocking stake. Bidvest Chief Executive Officer Brian Joffe became Adcock’s new chairman with Wakeford becoming CEO.

The shares fell 0.8 percent to 51.60 rand at the close in Johannesburg, extending this year’s loss to 27 percent. Bidvest paid 70 rand per share in January to increase its stake to 34.5 percent.

Adcock’s reorganisation includes the separation of the business into five divisions to create greater accountability, according to Wakeford.

To contact the reporter on this story: Neo Khanyile in Johannesburg at nkhanyile@bloomberg.net

To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net John Bowker, Robert Valpuesta, Gordon Bell

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