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Why Brian Joffe’s Bidvest Is Unlikely to Take All of Adcock

Adcock shareholders are not likely to find Bidvest’s offer tempting

Brian Joffe

Brian Joffe is trying to get his company Bidvest to buy Adcock Ingram’s BEE partners, but the automatic offer to minority shareholders is likely to be rejected, according to Times Live. 

Bidvest’s offer is a mere 13% premium to where Adcock has been trading. Bidvest owns 34.5% of BEE and has to make an offer when it crosses 35%, whether the shareholders are likely to accept it or not. To create a special vehicle, Bidvest and other shareholders will have to sell 15% to 30% of the stake, which will likely bring Bidvest’s ownership back under 35%.

Bidvest made a proposal to Blue Falcon, which has a 10.59% stake and Bophelo, which holds 3.6%, because there has been tepid return on the investment, but shareholders are still not likely to be thrilled with Joffe’s 25 Rand per share offer or $2.

Bidvest managed to block a takeover of Adcock by Chile’s CFR Pharmaceuticals, which wanted to buy a third of Adcock for 70 rand per share. Adcock is not likely to be tempted by Bidvest’s offer of just 25. In addition, management is speaking of a turnaround, and may not feel it needs to be taken over.

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