UPDATE 1-S.Africa's Adcock says Bidvest $675 mln offer has lapsed

Thu Apr 4, 2013 12:02pm EDT

Related Topics

* Adcock says offer lapsed on Tuesday

* Bidvest bid likely to turn hostile (Adds details, analyst comment)

JOHANNESBURG, April 4 (Reuters) - South Africa's Adcock Ingram will no longer entertain Bidvest's $675 million takeover bid, it said on Thursday, paving way for the conglomerate to go hostile by canvassing the drug maker's shareholders directly.

Bidvest had given the nation's second largest drug maker until Tuesday to co-operate but Adcock snubbed the bid, calling it "opportunistic" and lacking the details the board needed to assess its merits.

"Given that the Bidvest-imposed deadline has passed, the Adcock board does not currently have a firm offer to consider," chairman Khotso Mokhele said in a statement.

The bid looks likely to turn hostile after Bidvest said earlier this week Adcock shareholders should be given a chance to vote on the offer.

"Adcock seems to be playing by the book and it also looks like it is trying to buy time to convince its shareholders that it can deliver on its strategic plans," one analyst, who declined to be named, said.

"But at end of the day, an offer is an offer and some shareholders are not looking at the technicalities but at how much is being offered."

Adcock has underperformed rivals both operationally and in stock market terms in recent years, but it has said investments in factories, acquisitions and distribution partnerships with global drugmakers have teed it up well for growth.

Sometimes called "the General Electric of South Africa", Bidvest has a reputation of buying underperforming assets that can benefit from its vast distribution network and customer base.

However, going hostile is uncharted territory. Of 18 previous takeovers stretching back to 1999, all have been friendly, according to Thomson Reuters data. (Reporting by Tiisetso Motsoeneng; Editing by Ed Cropley)

FILED UNDER: