ADCOCK INGRAM HOLDINGS LIMITED - Further cautionary announcement regarding the cash offer by a consortium led by the Bidvest Group Limited

Further cautionary announcement regarding the cash offer by a consortium led by the Bidvest Group Limited

Adcock Ingram Holdings Limited

(Incorporated in the Republic of South Africa)

Registration number 2007/016236/06

Share code: AIP

ISIN: ZAE000123436

(“Adcock Ingram” or “the Company”)



FURTHER CAUTIONARY ANNOUNCEMENT REGARDING THE CASH OFFER BY A

CONSORTIUM LED BY THE BIDVEST GROUP LIMITED (“BIDVEST”) (“BIDVEST

CONSORTIUM”) TO ACQUIRE UP TO 34.5% OF THE ISSUED ORDINARY SHARE

CAPITAL OF ADCOCK INGRAM (“ORDINARY SHARES”), EXCLUDING ANY SHARES

OWNED BY SUBSIDIARIES OF ADCOCK INGRAM, (“THE BIDVEST CONSORTIUM

OFFER”)



Shareholders are referred to the announcements released by Bidvest

and the Company on the Stock Exchange News Service (“SENS”) on 2

December 2013 regarding the Bidvest Consortium Offer, which opened

for acceptances at 09h00 South Africa time yesterday morning.



It is the duty of the independent board of directors of Adcock

Ingram (“Adcock Ingram Independent Board”) to act in the best

interests of the Company and its shareholders. The Adcock Ingram

Independent Board will therefore consider the potential merits of

any bona fide offer, whether it is obliged in law to do so or not,

that could maximise value for Adcock Ingram shareholders.



While the Adcock Ingram Independent Board is still considering the

regulatory and other implications (including the possibility that

competition   authority  approval   may  be  required  in  various

jurisdictions) of the Bidvest Consortium Offer, it has now had the

opportunity to review the announcement released by the Bidvest

Consortium yesterday morning and wishes to draw Adcock Ingram

shareholders attention to the following:



* this is a cash offer of ZAR70.00 per Ordinary Share for up to

34.5% of the Ordinary Shares, with immediate settlement;



* the Bidvest Consortium is offering to acquire on a first come

first served basis and not pro rata to existing shareholdings;



* the offer is for up to a maximum of 34.5% of the Ordinary Shares

and not for 100% of Adcock Ingram;



* no prescribed minimum level of acceptances and no minimum offer

period has been specified. The Bidvest Consortium may therefore

withdraw the Bidvest Consortium Offer at any time and without

reaching the 34.5% threshold;



* the cash offer price of ZAR70.00 per Ordinary Share is below the

current value of the proposed scheme consideration offered by CFR

Pharmaceuticals S.A. (“CFR”) (approximately ZAR75.00 per Ordinary

Share based on the volume weighted average price of CFR shares for

30 trading days up to and including 2 December 2013, excluding the

potential value of synergies that could arise from the combination

of Adcock Ingram and CFR);



* the “prescribed percentage” threshold of 35.0% for a mandatory

offer will not be met. The Bidvest Consortium is under no obligation

to make a mandatory offer to all minorities on the same terms once

the Bidvest Consortium Offer is closed;



* the Bidvest Consortium may acquire negative control by virtue of

its   shareholding.  Should   the   Bidvest  Consortium   acquire a

shareholding of 25% or more of the Ordinary Shares it will be

entitled to vote down resolutions requiring a special majority of

Adcock Ingram shareholders (75% of the Ordinary Shares in general

meeting), including the resolutions required to approve the Scheme

(defined below) or any other potential offer for the Company; and



* while the Bidvest Consortium may via its shareholding exercise

material influence over Adcock Ingram, the benefits and potential

synergies for Adcock Ingram shareholders, who will remain invested

alongside the Bidvest Consortium, have not been clearly articulated.

In addition, the Bidvest Consortium has not communicated how it

would propose to manage potential conflicts of interest or how it

would avoid a protracted period of uncertainty regarding its

intentions for the Company in the event that it successfully

acquires negative control or votes against the Scheme.



As shareholders are aware, the scheme of arrangement between the

Company and Adcock Ingram shareholders regarding the offer from CFR

(“the Scheme”) is due to be considered by Adcock Ingram shareholders

at general meetings (“General Meetings”) scheduled for 18 December

2013, some two weeks hence.



The full range of benefits of the Scheme for Adcock Ingram

shareholders and South Africa have been presented in detail to

Adcock Ingram shareholders and are now well publicised. It remains

the Adcock Ingram Independent Board’s view that the Scheme is the

most attractive opportunity for Adcock Ingram shareholders to

maximise value in the near term and over the longer term. The Adcock

Ingram Independent Board therefore continues to recommend that

Adcock Ingram shareholders vote in favour of the resolutions

required to approve the Scheme at the General Meetings.



Based on the observations set out in this announcement, any Adcock

Ingram shareholder considering whether to tender it’s Ordinary

Shares in terms of the Bidvest Consortium Offer should carefully

consider the merits and implications in the circumstances.



In the announcement released by Bidvest on or around 07h07 South

Africa time on 2 December 2013, Bidvest indicated the imminent

institution of legal proceedings in respect of the "CFR/Adcock

Ingram transactions”. Shareholders are advised that no legal

proceeding have yet been instituted. Accordingly, shareholders are

advised to continue exercising caution when dealing in the Company’s

securities until a further announcement is made.



For media enquiries:

Brunswick

Tel: +27 11 502 7300

Carol Roos

+27 72 690 1230

Marina Bidoli

+27 83 253 0478



Midrand

3 December 2013



Financial adviser and sponsor

Deutsche Securities (SA) (Proprietary) Limited



Legal adviser

Read Hope Phillips Attorneys


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