CFR’s $1.3-bn bid remains best offer for Adcock Ingram

South Africa's second-largest pharmaceutical company Adcock Ingram Holdings today said that it has received more bids from potential suitors, but Chile's CFR Pharmaceuticals' $1.3 billion bid still remains the top offer.

''The independent board has received further unsolicited proposals,'' Adcock said in a statement and added that the bids are not better than CFR's offer.

Bloomberg this week reported that London-based private-equity firm Actis had tabled a 70-rand ($7.02) per share offer in late July on condition that it is provided the same information as given to CFR.

After having its 63 rand a share hostile bid being rejected in April by Adcock Ingram, diversified South African conglomerate Bidvest Group Ltd is also reported to conducting due diligence along with Actis and a third unidentified party.

In early July Santiago-based CFR, Chile's largest drugmaker, made a non-binding cash and stock offer pitched at 73.51 rand a share, valuing the Johannesburg-based company at $1.3 billion. (See: S Africa's Adcock Ingram receives $1.3-bn bid from Chile's CFR Pharma)

But CFR did not disclose the mix of the cash and stock components in its offer, and Adcock Ingram's largest shareholder, the Public Investment Corp (PIC), the South African government-employee pension-fund, has said that it would prefer a local company buying the company and consider any bid that if the cash component is for 50 per cent plus-one-share.

Oasis Group, which holds 2.3-per cent stake in Adcock Ingram, said that it would not back CFR's bid since it is not interested in being loaded with the Chilean company's shares.

Adcock Ingram began as the EJ Adcock Pharmacy in Krugersdorp 120 years ago.  It was listed on the Johannesburg Stock Exchange (JSE) in 1950 before it became a wholly-owned subsidiary of Tiger Brands, and was subsequently delisted in 2000.

After the unbundling from Tiger Brands, Adcock Ingram re-listed on the JSE in 2008.

The company has a market cap of about 9 billion rand and holds a 10-per cent share of the private pharmaceutical industry in South Africa.

Adcock Ingram operates in two areas, pharmaceutical and hospital products business.

It has an extensive range of branded and generic prescription and OTC products in a broad range of therapeutic classes such as, analgesics, allergy, cardiovascular, central nervous system, dermatology, ear/nose/eye preparations, feminine health, gastrointestinal, vitamin, mineral and energy supplements as well as a selective range of personal care products.

In generics, the company markets a broad range of affordable products under the corporate brand. In branded products, the company markets leading brands such as Adco Dol, Allergex, Bioplus, Citro-Soda, Corenza C, Myprodol, Panado, Syndol, vita-thion and Unique Formulations, as well as a other brands on behalf of overseas drug companies.

Adcock Ingram Critical Care is South Africa's largest supplier of hospital and critical-care products, blood systems and accessories as well as products used for renal dialysis and transplant medication.

This business unit has a 60-year partnership with US-based Baxter International.

The South African healthcare market benefits from favourable demographic trends, such as government initiatives to combat HIV/Aids, sustained growth in the middle class and increased accessibility to healthcare products.

Adcock Ingram has low-cost manufacturing facilities in South Africa and India, whereby it is able to maintain a cost-efficient manufacturing base and through acquisitions and market development.

In July 2012, Adcock Ingram acquired Goa-based Cosme Farma Laboratories, a pan-Indian pharmaceutical company for Rs480 crore ($86 million).
(See: South Africa's Adcock Ingram to buy Cosme Farma drug business for Rs480 crore)