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Announcement of a firm intention offer and renewal of cautionary announcement
Adcock Ingram Holdings Limited
Incorporated in the Republic of South Africa
(Registration number 2007/016236/06)
Share code: AIP ISIN: 000123436
("Adcock" or "the Company")
ANNOUNCEMENT OF A FIRM INTENTION BY THE BIDVEST GROUP LIMITED ("BIDVEST") TO MAKE AN OFFER TO ACQUIRE THE
ENTIRE ISSUED ORDINARY SHARE CAPITAL OF ADCOCK THAT BIDVEST DOES NOT ALREADY OWN (THE "OFFER") AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Adcock shareholders are referred to the announcement dated 23 February 2015 wherein it was
announced that Bidvest had entered into an agreement to acquire 2,571,000 Adcock ordinary
shares ("Dividend Shares") from Adcock's black economic empowerment ("BEE") partners, Blue
Falcon Trading 69 Proprietary Limited and the Mpho ea Bophelo Trust for a cash consideration of
R52.00 per Adcock ordinary share.
The above purchase requires the Dividend Shares to be released by the Company from the
restrictions contained in the existing Adcock BEE transaction. The board of directors of Adcock
("the Board") has consented to such release of the restrictions on the Dividend Shares subject to:
- Adcock shareholders approving the termination of Adcock's existing BEE transaction; and
- Bidvest making an offer at the same cash consideration of R52.00 per Adcock ordinary
share to holders of the remainder of the issued ordinary share capital (excluding treasury
shares) of Adcock not already held by Bidvest (the "Remaining Shares").
Adcock shareholders are advised that the Board has received a letter of firm intention to make an
offer from Bidvest, to acquire the Remaining Shares ("Firm Intention Letter") as contemplated in
Chapter 5 of the Companies Act, No. 71 of 2008, as amended (the "Companies Act") and Chapter
5 of the Companies Regulations, 2011 (the "Companies Regulations"), hereinafter referred to as
the "Transaction".
Bidvest currently owns 59,266,944 (fifty nine million two hundred and sixty six thousand nine
hundred and forty four) Adcock ordinary shares constituting approximately 34.57% (thirty four point
fifty seven percent) of Adcock's ordinary issued share capital excluding treasury shares.
The salient terms of the Transaction as detailed in the Firm Intention Letter are set out below.
2. Mechanics of the Transaction
The Transaction will be implemented by way of a general offer subject to compliance with
the relevant provisions of the takeover regulations as published in the Companies Act and
Companies Regulations.
The Offer will be made by Bidvest to all the holders of Remaining Shares (the "Remaining
Shareholders") on the following basis:
- the Offer will be made in terms of section 117(1)(c)(v) of the Companies Act; and
- the price payable, and the terms of payment to the Remaining Shareholders for
their Remaining Shares, will be as is set out in paragraph 3 hereunder.
As Bidvest has received written waivers in respect of a comparable offer from Blue Falcon
69 Trading Proprietary Limited and the Mpho ea Bophelo Trust, being the respective
holders of the entire issued Adcock A ordinary shares and Adcock B ordinary shares
(collectively the "Adcock A and B Shares"), Bidvest will not make a comparable offer to
acquire the Adcock A and B Shares as would otherwise be required in terms of section 125
(2) of the Companies Act.
As required in terms of section 125 (2) of the Companies Act as read with regulation 87 of
the Companies Regulations, Bidvest will make a comparable offer to the holders of any
Adcock share options in terms of the Adcock Share Option Scheme or Adcock phantom
options in terms of the Adcock Phantom Share Scheme and, to the extent applicable, as
may be required in terms of either the Adcock Share Option Scheme and / or the Adcock
Phantom Share Scheme.
3. Offer Consideration
The purchase consideration (the "Offer Consideration") payable in terms of the Offer will
be a cash consideration of R52.00 (fifty-two rand) per Adcock ordinary share.
The aforementioned consideration will be discharged on the dates as will be set out in
accordance with the Offer circular to be published by Bidvest as set out in paragraph 7.
4. Proposed Pool Agreement with the PIC
The Board has been advised that Bidvest and the Public Investment Corporation (SOC) Limited (the
"PIC") have engaged in discussions with a view to enter into a pool agreement ("Pool Agreement")
for joint control of Adcock in respect of approximately 82,000,000 Adcock ordinary shares (with
Bidvest and the PIC each contributing 41,000,000 Adcock ordinary shares), representing
approximately 47.82% of Adcock's issued ordinary share capital excluding treasury shares. If these
discussions result in the conclusion of the Pool Agreement it will be conditional upon receiving the
requisite regulatory approvals, including from the Competition Authorities. As part of the Pool
Agreement, within the pool participants (i.e. Bidvest and the PIC) it is the contemplation of the
parties that Bidvest will be responsible for the management of Adcock, subject to satisfactory
performance.
5. Irrevocable undertakings
In anticipation of the Pool Agreement detailed in paragraph 4 coming into force and effect, the PIC
has provided Bidvest with a written undertaking not to accept the Offer in relation to the 48,466,905
(forty eight million four hundred and sixty six thousand nine hundred and five) Adcock ordinary
shares over which it is the discretionary manager on behalf of the Government Employees Pension
Fund and the Unemployment Insurance Fund (the "PIC Shares").
6. Funding and cash confirmation
Bidvest will fund the Offer Consideration from internal resources and has provided the Takeover
Regulation Panel with cash guarantees from The Standard Bank of South Africa Limited and Bidvest Bank Limited,
which cash guarantees are sufficient to settle the maximum possible offer consideration of R3.18 billion.
7. Bidvest Offer Circular
Bidvest intends to post its offer circular to Adcock ordinary shareholders within 20 business days of
the publication of this announcement ("Bidvest Offer Circular").
8. Adcock Circular
Within 20 business days of the Bidvest Offer Circular being posted to Adcock shareholders, Adcock
will post its response circular as required in terms of section 102 (9) of the Companies Regulations
("Adcock Circular").
9. Regulatory approvals
The implementation of the Offer is subject to the receipt of the following approvals, consents or
waivers from all regulatory bodies (in each case either unconditionally or subject to conditions
reasonably acceptable to the persons on whom such conditions are imposed) including from the:
- JSE Limited ("JSE"); and
- Takeover Regulation Panel (in terms of a compliance certificate to be issued in terms of the
Companies Act in relation to the Offer).
10. Listing of Adcock ordinary shares on the JSE
Given the PIC undertaking not to accept the Offer in relation to the PIC Shares, the Offer will not be
accepted by Adcock ordinary shareholders who hold at least 90% (ninety percent) of the Remaining
Shares. Accordingly, Bidvest will not exercise any entitlements it may have under section 124 of the
Companies Act and Adcock will remain listed on the JSE upon the closing of the Offer.
11. Independent board and opinion
The Board has established a board committee of independent directors of the Board
constituted for purposes of the Offer (the "Independent Board") in accordance with section 108(9)
of the Companies Regulations. The Independent Board has appointed PSG Capital ("the
Independent Expert"), who will consider the terms and conditions of the Offer and whether such
terms and conditions are fair to Adcock shareholders. The opinion of the Independent Expert and
the basis for its conclusion will be included in the Adcock Circular. The opinion of the Independent
Board, after taking into consideration the opinion of the Independent Expert, will also be published
in the Adcock Circular.
12. Renewal of cautionary
A further announcement regarding the new Adcock BEE transaction, including financial effects, will
be released on SENS in due course. Accordingly Adcock ordinary shareholders are advised to
exercise caution when dealing in their Adcock ordinary shares.
13. Responsibility statement
The Independent Board accepts responsibility for the information contained in this announcement
insofar as it applies to the Company and has placed reliance on the information pertaining to
Bidvest as presented by Bidvest in its firm intention to make an offer. To the best of the
Independent Board's knowledge and belief, the information contained in this announcement is true
and nothing has been omitted which is likely to affect the importance of such information.
Johannesburg
12 March 2015
Investment Bank, Financial Advisor and Sponsor to Adcock
RAND MERCHANT BANK (a division of FirstRand Bank Limited)
Legal Advisor to Adcock
Fluxmans Attorneys
Independent Expert to Adcock
PSG Capital
Date: 12/03/2015 05:00:00 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,
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