South African drugmaker Adcock Ingram is so far staying true to suitor CFR Pharmaceuticals. Thursday, it said it remains in exclusive talks with the Chilean company, which offered up a $1.3 billion takeover bid last month.
As Reuters reports, South Africa's second-largest pharma company said it has received other offers, but its board has deemed them "less compelling" than CFR's. That's good news for CFR, as South Africa's Public Investment Corporation, which owns about 14% of Adcock, has said in the past that it would prefer a buyout by a local firm.
CFR is doing its part to get the deal done. A few weeks ago, its shareholders approved a $750 million increase in capital, good for more than half the funding needed for the transaction. President Alejandro Weinstein has said the rest would be financed through CFR's own resources and long-term debt.
The company has good reason to move quickly, as an Adcock buyout would be strategic for increasing its presence in emerging markets and slashing costs. The deal would open up new channels in Africa for CFR's own products and provide new markets in Latin America for Adcock's HIV drugs and OTC business. CFR also sees opportunities to cut its spending through combining purchasing power to buy APIs in bulk and putting Adcock's excess manufacturing capacity to use.
Adcock has been drawing takeover interest since March, when transportation and distribution company Bidvest made an unsolicited bid of about $675 million for a 60% share of the drugmaker. But Adcock's board dismissed that offer, with Chairman Khotso Mokhele labling it "opportunistic."
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