Bidvest/Adcock, it is complicated

Things seem to be getting heated between Bidvest and the Adcock Ingram board. As I am sure you are aware, Bidvest made an offer on the 22nd of March to Purchase 60% of the shares in Issue, half for cash the other half for Bidvest shares. Adcock then fired back on Tuesday 2 April stating that the offer had no firm intention and that Bidvest had not engaged with the board before making the offer public which was the usual practice. This means basically that the board will not respond to the offer because certain legal requirements have not been met.


Dr Khotso Mokhele the chairman of the Adcock Board then released this statement via SENS which basically said that not enough detail was given in the Bidvest proposal. It is their way of rejecting a proposal they do not seem fit for both the board and shareholders. Fair enough, many questions remain unanswered such as Bidvest's strategy going forward with the company.


If shareholders best interests are to be considered this needs to be relayed as 50% of the payment will come with Bidvest shares. The board and the Adcock management would also like to know the details of their future and clearly feel slightly threatened. Again fair enough.

Bidvest however came back with a response yesterday stating that the Takeover Regulation Panel had a approved the firm intention letter prior to sending it and that the offer should be taken to shareholders.


"Bidvest still believes that Adcock shareholders be given the opportunity to vote on the offer contained in the Firm Intention Letter. Shareholders are advised that Bidvest is considering its position in relation to the issues raised and inaccuracies contained in the aforementioned response. A further announcement will be made by Bidvest in due course."


This is certainly not the last we will hear from this matter and negotiations will go to and fro. The media will cover it extensively because it is interesting to follow, market participants love big deals. As Bidvest shareholders our biggest concern lies with whether this is a good deal or not. We have already established that this would be a good addition to the Bidvest group and we fully entrust Brian Joffe to make the right decisions.


If the deal goes through then great, if the deal doesn't go through then things will just go back to normal. Hopefully the parties will not part ways because negotiations have gone sour. If that pans out shareholders of both groups will be the losers.