* Adcock shareholders to vote on CFR offer in February
* Joffe and others hold enough to block Chileans
* Joffe built S.African start-up into global conglomerate
By David Dolan
JOHANNESBURG, Jan 14 Brian Joffe, the
hard-driving South African entrepreneur whose empire spans
shipping to mop sales, has a favourite saying: "Why go into
business to test the waters? Go in to make waves."
The 66-year-old son of Lithuanian immigrants may do just
that next month, when he is expected to block a $1.2 billion
Chilean bid for Johannesburg-based drugmaker Adcock Ingram, in
which his Bidvest Group owns a stake.
Santiago-based CFR Pharmaceuticals has offered 12.8
billion rand ($1.24 billion) in cash and shares for Adcock
, aiming to add Africa to existing operations in Latin
America and Asia.
But Joffe - described by those who know him as a
numbers-focused straight-talker - sees in Adcock his own chance
to access new markets, and turn around another lagging firm.
Adcock supplies life-prolonging HIV/AIDS medicine through a
government programme and is an important player in a plan to
overhaul South African healthcare. It has suffered from
lacklustre sales and an over reliance on its home market, but
could harness strong economies elsewhere in Africa with its wide
range of over-the-counter medicines.
The tug-of-war is South Africa's biggest corporate spat in
recent memory and has revived concerns that Pretoria is uneasy
about foreign investment, especially takeovers that could impact
the black majority.
Because the $130-billion state pension fund is the largest
shareholder in both Adcock and Bidvest, the standoff has also
prompted talk Joffe is working with the government to thwart
CFR, something he has denied.
CFR's founding Weinstein family accused the Public
Investment Corporation (PIC) of protectionism, a charge echoed
by South Africa's main business daily.
The PIC says it doesn't want CFR shares, but rather wants to
benefit directly from improvements at Adcock.
"A DEMANDING FELLOW"
Joffe has established a pattern for overhauling the firms he
acquires: Focus on cash flows, capital allocation and returns,
and encourage each business to work with others he owns. Some
group companies are cleaned by the cleaning unit and furnished
by the furniture arm.
"One thing about Brian is that he's got the ability to grow
big companies," said David Shapiro, a veteran stockbroker who
grew up with Joffe.
He has turned a small, apartheid-era venture selling bakery
ingredients into an empire totalling more than 300 businesses
ranging from freight and auto sales to frozen food. Revenue is
$15 billion and Bidvest employs nearly 140,000 people in its
main markets of South Africa, Europe and Asia.
"He can overpay, but he gets more out of a business than the
incumbent management. He's very good at making the business
focused, and then managing finances and return numbers," said
one of his business associates.
"He's a pretty demanding fellow."
Since 1990 Bidvest's share price has increased 142-fold -
and Joffe has said it "outscores Jack Welch's GE and Warren
Buffet's Berkshire Hathaway as a wealth creator".
Now, he believes, Adcock products could provide a further
expansion opportunity in sub-Saharan Africa, where economic
growth is expected at 6 percent this year - or as much as 8
percent in Mozambique and Zambia - fuelling consumer demand for
everything from cosmetics to painkillers.
"From Joffe's perspective Adcock is a brilliant asset. It
has excess capacity and it gives him the opportunity to move
into Africa. He clearly believes it has been inefficiently run,"
said Roy Mutooni, an analyst at Renaissance Capital.
"He has an eye for undervalued assets and seems to know
where the issues are in the acquisitions he's made."
Joffe first attempted to take over the drugmaker early last
year but was rebuffed. After CFR stepped in he went direct to
Adcock shareholders with a cash bid and now owns around 7
percent - enough to block CFR when combined with the 22 percent
held by the state pension fund.
CFR needs backing from investors with 75 percent of Adcock
in a vote next month.
Yet Bidvest's record is not unblemished: in 2006 it sold its
money-losing printing business Lithotech France for a loss of 26
million euro after failing to turn it around.
He also walked away from packaging firm Nampak in
2008 after it released a hefty profit warning. But subsequently
the company revived and its shares trebled.
Joffe, who declined to be interviewed by Reuters, was
candid about his setbacks in a 2009 magazine interview: "There
was a time when the Joffe name might have commanded a premium -
but that's gone now."
In a more recent interview with CNBC Africa, he appeared
annoyed when asked about charges from CFR that his offer for
Adcock would only benefit himself.
"That's a bit rich coming from them, seeing that they
control about 52 percent of CFR and I've got about 1 percent of
Bidvest," he said referring to the Weinsteins, who in fact own
around 73 percent of their business.
A Johannesburg native, Joffe grew up in the city's
close-knit community of Lithuanian Jews, inheriting an immigrant
work ethic that helped shape other prominent South Africans such
as central bank governor Gill Marcus and Glencore Xstrata
CEO Ivan Glasenberg.
In his spare time, Joffe is an accomplished photographer,
and has published a book of African wildlife photos accompanied
by inspirational quotes - his own, alongside those of Napoleon
and Thomas Edison. The emphasis on success and tenacity -
"Building a business is like child's play - one block at a time"
- suggests his battle for Adcock could go the distance.
(Additional reporting by Tiisetso Motsoeneng; Editing by Sophie