CFR Says Adcock Offer Opposition Is to Deter Foreign Buyers

CFR Pharmaceuticals SA, Chile’s largest drugmaker, said the Public Investment Corp.’s opposition to its 12.8 billion-rand ($1.2 billion) takeover of Adcock Ingram Holdings Ltd. is for nationalist reasons.

“The impression created is that the criticisms leveled at our effort by the PIC have little to do with commercial merits and are instead intended to allow a local buyer to succeed over a foreign buyer,” CFR Chief Executive Officer Alejandro Weinstein said in a statement today. “None of our engagements with the PIC have concluded satisfactorily and the messages we have received have been mixed and confusing.”

CFR raised its offer to buy Johannesburg-based Adcock by 2 percent last week. The bid, a minimum of 50 percent of which would be paid in cash, values each share in the company at 74.50 rand to 75.78 rand, Adcock said.

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

Shares Fall

Adcock shares fell 0.5 percent to 70.14 rand by the close of trade in Johannesburg. The stock has climbed 25 percent since Bidvest’s first offer for Adcock on March 22. That compares to a 40 percent increase in larger rival Aspen Pharmacare Holdings Ltd.

The PIC, a manager of South African civil-servant pension funds and the owner of almost 20 percent of Adcock, won’t support CFR’s proposal as it “greatly undervalues” the company, Chief Investment Officer Daniel Matjila said in a Dec. 13 interview.

“We have not discussed or received any formal feedback from the PIC on our revised offer,” Weinstein said in the statement. “We last met with Matjila in August 2013. During these meetings, Matjila did not raise any concerns around price or valuation of our then proposed offer but focused rather on other aspects,” including black economic empowerment elements, he said.

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