Brian Joffe, CEO of JSE-listed diversified industrials services firm, Bidvest, on Wednesday accused CFR Pharmaceuticals, the Chilean firm that wants to acquire Adcock Ingram, of using the targeted firm’s money to fund the proposed deal.
This comes soon after Bidvest said it would challenge regulatory and legal features of CFR’s proposed $1, 2 billion acquisition of Adcock Ingram.
“Well, it’s our contention that CFR is using the assets of Adcock to finance the transaction, which is financial assistance and illegal in South African company law,” Joffe told Moneyweb on Wednesday.
“That’s obviously our allegation and one would have to see how that pans out. If we are right then, of course, their scheme is invalid and there is no offer on the table. So we just want to be sure that at that point in time the shareholders do have a meaningful and proper standby offer,” Joffe continued in the interview.
When Bidvest earlier this week said it planned to take legal action against CFR, it said it was currently taking legal advice from its legal department.
Many believe this is Joffe’s strategy to disrupt CFR’s efforts to buy South Africa’s second biggest drug maker, Adcock Ingram.
Johan De Kock, a Cape Town-based equity analyst, told Ventures Africa that it looked as if Bidvest is seriously interested in acquiring Adcock Ingram.
“Otherwise they would not be spending so much money in legal fees and other expenses related to this current feud,” De Kock said.
De Kock added that it was not clear which of the two companies vying for Adcock Ingram would add more value to the loss-making Adcock Ingram.
“Very little is known of CFR. We are not even sure how they will treat local workers. But I can safely say Bidvest has a track record of turning around loss-making companies,” De Kock said.
On Monday this week, Bidvest made a surprise offer of $393 million for 34,5 percent of Adcock Ingram in a move many thought could trigger a legal battle as to who is permitted to vote at the December 18 Adcock Ingram’s shareholders meeting.
Earlier this year, Adcock Ingram rejected Bidvest’s bid to buy 60 percent of Adcock Ingram, saying the offer devalued the firm.
