To view the PDF file, sign up for a MySharenet subscription.

ADCOCK INGRAM HOLDINGS LIMITED - Statement by Dr Khotso Mokhele, Chairman of Adcock Ingrams Board of Directors and Independent Board

Release Date: 02/04/2013 14:25
Code(s): AIP     PDF:  
Wrap Text
Statement by Dr Khotso Mokhele, Chairman of Adcock Ingram’s Board of Directors and Independent Board

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”)


Statement by Dr Khotso Mokhele, Chairman of Adcock Ingram’s Board of Directors and
Independent Board, regarding the Independent Board’s response to the Bidvest Letter

This afternoon, the Independent Board of Adcock Ingram issued a statement via the JSE’s Stock
Exchange News Service (SENS) in response to the unsolicited proposal from Bidvest to acquire a
60% stake in Adcock Ingram.

Having reviewed the Bidvest Letter, the Independent Board, together with its advisers, consulted with
senior counsel and the Takeover Regulation Panel, and engaged with Adcock Ingram shareholders
including our BEE partners who together represent almost two thirds of the shares in issue. The
Independent Board has fundamental legal and material prudential concerns with the Bidvest Letter
and the Independent Board will not propose a scheme of arrangement to implement the proposal, as
set out in the Bidvest Letter.

The Bidvest Letter does not constitute a firm intention to make an offer in terms of the Companies Act.
Only the Board of Directors of a company can propose a scheme of arrangement between the
company and its shareholders, and neither the Adcock Ingram Board nor the Independent Board was
approached by Bidvest, prior to submission of the Bidvest Letter, to do so. What this means is that the
Bidvest Letter is currently nothing more than a non-binding proposal. This is cause for concern for the
Independent Board as Bidvest’s actions have created expectations in the market regarding the
likelihood of a transaction being concluded.

In addition, the Independent Board has material prudential concerns with the Bidvest letter and the
resultant potential prejudicial impact on Adcock Ingram shareholders. In particular, the Independent
Board is concerned about the high level of conditionality, including “walk-away” rights, the absence of
comparable offers for two of our other key stakeholders, namely our BEE partners and employees,
who are participants in our group share incentive scheme.

The Bidvest Letter also fails to address the position of the remaining minority shareholders post
implementation of such a transaction. Bidvest has provided no insight into the strategic rationale for
its proposal and the potential benefits for Adcock Ingram and its remaining minority shareholders in a
Bidvest-controlled Adcock Ingram. This is particularly relevant given that Adcock Ingram is making
good progress in executing its medium-term strategic plans.

Adcock Ingram has recently completed a substantial investment programme to upgrade its
manufacturing facilities and distribution infrastructure to world-class standards. The company has won
tenders across the business, including a significant slice of the Government’s 2012 ARV tender.
Adcock Ingram has reformulated certain products to reduce cost, complexity and regulatory risk, and
also has a robust new product pipeline, while portfolio acquisitions have resulted in new product
introductions. Adcock Ingram has also grown its pipeline and presence outside South Africa, with
successfully completed acquisitions in both Ghana and India. Consequently, the Independent Board
recognises that the timing of Bidvest’s approach appears to be opportunistic.

Shareholders should note that Adcock Ingram’s Board will consider any proposal, from any quarter,
which is proposed in good faith and which could promote the interests of Adcock Ingram and create
value for shareholders, and will keep an open mind regarding a revised proposal from Bidvest that
addresses the Independent Board’s concerns.

I know the people of Adcock Ingram feel great pride in the work they do in providing world class
health-care to patients and leading products to our customers throughout the continent. Their
commitment to this work, and to delivering for all our stakeholders, remains stronger than ever.


Media queries:

Brunswick               +27 11 502 7300

Carol Roos              +27 72 690 1230
Kieron Stevenson        +27 72 610 8793

Midrand
2 April 2013

Sponsor
Deutsche Securities (SA) (Proprietary) Limited

Date: 02/04/2013 02:25:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Share This Story