Major shareholder nixes Chilean acquisition of Adcock Ingram

The South African Public Investment Corporation (PIC), a start-owned pension fund, has said that its management and Investment Committee had come to the unanimous decision that it was not in the best interest of its shareholding in domestic drug major Adcock Ingram (AIP: SP) to support the recently-agreed $1.3 billion offer from Chile’s largest drugmaker, CFR Pharmaceuticals, to acquire Adcock Ingram, reports iafrica.com.

In a statement, PIC chief executive Elias Masilela said: "CFR recently made a non-binding offer for Adcock Ingram which was subsequently recommended by the Adcock board to shareholders. Due to its non-binding nature, the terms of the offer cannot be considered to be final, with some of them still uncertain. The PIC has considered the CFR proposal based on the current terms and available information, specifically taking a long term view on our investment in Adcock."

PIC owns around 14% of the Adcock Ingram, and has previously stated that it would prefer a domestic buyer for the latter, South Africa’s second-largest drugmaker and which is expected to play a vital role in the ANC-led government ambitious plan to overhaul health care in the country, noted a Reuters report.

Asked by TPL to comment on the PIC decision, Khotso Mokhele, chairman of Adcock Ingram (pictured far right with the Adcock board) stated: "Adcock Ingram notes the statements made by the PIC yesterday, and respects the views of all Adcock Ingram shareholders. Adcock’s Independent board remains strongly of the view that a combination with CFR is a unique value proposition and would be in the best interests of all Adcock Ingram shareholders and other stakeholders, as well as South Africa at large. There is a significant level of shareholder support for CFR’s proposal and Adcock Ingram will continue to engage with the PIC regarding its position as well as the merits of the proposed transaction."