UPDATE 1-S.Africa's Bidvest lifts Adcock stake in buying spree

Thu Jan 30, 2014 2:15pm EST

By Tiisetso Motsoeneng

JOHANNESBURG Jan 30 (Reuters) - South Africa's Bidvest bought most of a record 39 million shares in Adcock Ingram that traded on Thursday, a person familiar with the matter said, and now may have a big enough stake to block a $1.2 billion takeover offer.

Chile's CFR Pharmaceuticals, which aims to build an emerging markets powerhouse with operations in Latin America, Asia and Africa, made an offer in November for Adcock, South Africa's second-biggest drugmaker.

Bidvest, which had tried and failed to buy control of Adcock in March 2013, has responded with a 4 billion rand ($359 million) cash offer direct to shareholders, which expires next week.

Thursday's record trading volume represented about 22 percent of Adcock's shares, with most trading at Bidvest's offer price of 70 rand a share, according to the exchange and Thomson Reuters data.

Santiago-based CFR needs backing of 75 percent for its sweetened $1.2 billion bid to go through.

"The majority of the 39 million shares that traded today were bought by Bidvest," the source said, adding that he was not sure what Bidvest's resulting stake would be.

Bidvest, which declined to comment, had built up its stake in Adcock to about 9 percent before Thursday. Buying the bulk of the shares that traded on Thursday could lift its stake to about 30 percent.

Adcock shareholders are due to vote on the deal in the middle of February.

CFR is offering 74.50 rand worth of cash and its own shares for each Adcock share, based on a value of 2.334 rand per new CFR share. The final ratio of cash to shares will be determined after CFR concludes a rights issue to its own shareholders.

Daily trade in Adcock averaged less than 650,000 shares last year, and Thursday's volume was the highest for the company since its listing in 2008.

CFR's offer also has come up against the Public Investment Corporation, Adcock's biggest shareholder with more than 20 percent. The PIC said in December it did not want to swap shares in Adcock for those in CFR.

Even without increasing its stake, Bidvest could have still scuppered CFR's bid by combining its 9 percent stake with that of PIC. After Thursday's deals, it may not need to rely on the PIC to ensure that the deal fails.

Bidvest, a conglomerate that spans shipping to auto sales, is expected to disclose the size of its stake Adcock on Friday, the day Adcock holds its annual shareholder meeting.

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