Adcock options

Bidvest released an announcement yesterday regarding their investment (with CIH) in Adcock Ingram, it was pretty self explanatory. Collectively the consortium owns 59 266 944 Adcock Ingram ordinary shares, which represents 34.5 percent of the company (excluding certain other shares) and therefore, as they say, means that they do not have control of the company.


They (the consortium) want control and applied to the competitions commission on the first of April for permission, which was duly granted on the 19th of August (winter is obviously go slow time) and now Bidvest is evaluating their options as to what to do.


As they put it, it means that they are keeping their options open: "Given the ongoing uncertainty concerning the current trading performance of Adcock Ingram, the Consortium continues to evaluate its position, but has not determined whether to make a general offer to Adcock Ingram shareholders."


The going is tough at the moment for this investment which they had to pay up for! That possibly represents an opportunity, Brian Joffe has been around for over 25 years as a king deal maker. He will know to be patient. Anyhows, as we pointed out, whilst much was made of the deal at the time, the number of shares owned by the consortium relative to the Bidvest market cap was as follows as at last evening: 59 266 944 Adcock Ingram ordinary shares multiplied by the closing price equals 3.081 billion Rand.


The Bidvest market cap as at last evening was 96.6 billion Rand, this represents a mere 3.188 percent of the market cap of Bidvest. Not nothing and more than an irritation that they (Bidvest) are all the poorer for having bought the shares at an elevated level. Sometimes there are some people that you can question, I think that the street smarts of the Bidvest team are not one of those "people".