Key Adcock investor rebuffs CFR Pharma's new $1.2B offer

There's nothing like cold, hard cash in your pocket, and that fact may be enough to derail CFR Pharmaceuticals' takeover bid for South Africa's Adcock Ingram. Adcock's top shareholder has rejected a sweetened cash-and-stock offer from CFR, opening a window for rival bidder Bidvest Group to push its counteroffer through.

South Africa's state-run Public Investment Corporation (PIC), which owns 18.6% of Adcock shares, wasn't interested in the revised bid Chile-based CFR put forth on Friday. CFR had lifted its offer by 1.6% to 12.8 billion rand ($1.2 billion). "Our message is clear: We want cash, we don't want their shares," PIC CIO Daniel Matjila told Reuters, saying the new offer "doesn't change much."

That's where Bidvest, a South African conglomerate, comes in. The company already owns a small stake in Adcock, and it made its own bid for just over a third of the company, for 70 rand per share in cash. And Bidvest's current 7% share--along with PIC's 19%--is enough to foil CFR. Its bid requires approval from investors holding 75% of the company. 

Adcock's chairman, Khotso Mokhele, spoke out against a Bidvest takeover earlier this year, when the conglomerate launched an unsolicited bid for a 60% stake. But at the same time, Adcock has pleaded for help to compete with bigger players. Last month, it cited consolidation in the global pharma market as a serious threat to its business.

A merger with CFR could allay that worry; the Chilean company could bolster Adcock's business as it pushes for a bigger share of emerging markets sales. Bidvest, on the other hand, has a reputation for snatching up struggling companies and turning them around through cost-cutting and other measures, Reuters reports.

For now, CFR refuses to back down, though CEO Alejandro Weinstein claims PIC has been none too helpful in cluing CFR in to what it's looking for. "We have not been given any clarity around what the PIC regards as the fair or acceptable value for Adcock," he said in a statement seen by Reuters.

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