CFR Makes Firm $1.2 Billion Offer for Adcock Ingram

Chilean drugmaker CFR Pharmaceuticals SA said it made a firm 12.6 billion rand ($1.2 billion) offer to buy South African drugmaker Adcock Ingram Holdings Ltd., with a minimum of 51 percent to be paid in cash.

The company, which made a non-binding offer for Johannesburg-based Adcock in July, said in a statement today the proposal had been recommended to investors by the Adcock board and was officially supported by about 45 percent of shareholders.

“The compelling rationale for the proposed combination has been accepted by the overwhelming majority of all stakeholders we have engaged with,” CFR Chief Executive Officer Alejandro Weinstein said in the statement.

Adcock shares gained as much as 4.3 percent, the most in more than six months, and were 2.5 percent higher at 71 rand at the close of trading in Johannesburg, giving the company a market value of 12.4 billion rand. The offer values Adcock at 73.51 rand to 77.02 rand per share, CFR said.

Weinstein said on Nov. 11 that CFR could walk away from its attempt to buy Adcock if it didn’t receive support for its offer. The Public Investment Corp., Adcock’s biggest shareholder with a 19 percent stake, said on Nov. 6 it wouldn’t back the deal. PIC, Africa’s biggest money manager, still hasn’t given its support, Chief Investor Officer Daniel Matjila said by phone today.

No Alternative

Shareholders will vote on the takeover proposal on December 18 and Adcock hasn’t received any alternative offers, Chairman Khotso Mokhele said by phone today. Private equity firm Actis LLP is considering a second bid for Adcock if the CFR deal collapses, a person familiar with the situation said on Nov. 13.

“We have not received any other offers,” Mokhele said in a telephone interview from Johannesburg. “We believe that we have a very attractive offer for the company and shareholders.”

Adcock will “continue to engage” with the PIC about the merits of the CFR proposal, he said. “I’m very hopeful that will we be able to find one another.”

A minimum of 51 percent and as much as 64 percent of the 12.6 billion rand offer will be in cash with the balance in CFR shares, the Chilean company said in the statement. The combined value of the offer price and identified synergies is more than 80 rand per share, it said. The new company would be listed in both Santiago and Johannesburg.

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