* Adcock says believes deal best for shareholders
* State-owned PIC against the deal
* Deal needs 75 pct support to go through
(Recasts with Adcock response)
By Tiisetso Motsoeneng
JOHANNESBURG, Nov 7 The board of South Africa's
No.2 drugs maker Adcock Ingram said it will talk with
the state-owned pension fund to keep alive a $1.3 billion bid
from Chile's CFR Pharmaceuticals, which the fund
Pretoria has a history of sinking cross-border deals,
especially when foreign ownership is seen as a threat to plans
to raise living standards among the black majority.
The Public Investment Corporation (PIC), which is the
biggest shareholder in Adcock with around 14 percent, according
to Thomson Reuters data, had been seen as a possible hurdle to
the deal after saying it would prefer a local investor.
"A combination with CFR ... would be in the best interests
of all Adcock Ingram shareholders," Adcock Chairman Khotso
Mokhele said in a statement on Thursday in response to PIC's
rejection of the CFR deal this week.
"There is a significant level of shareholder support for
CFR's proposal and Adcock Ingram will continue to engage with
the PIC regarding its position as well as the merits of the
proposed transaction," he added.
CFR already has the support of shareholders with a 45
percent stake, although it needs 75 percent support.
Adcock supplies equipment to public hospitals and
life-prolonging antiretrovirals drugs to HIV/AIDS patients.
"The PIC management and investment committee have come to
the unanimous decision that it is not in the best interest of
our shareholding to support the CFR offer in its current form,"
PIC Chief Executive Elias Masilela said in a statement.
CFR in September offered 12.6 billion rand in cash and
shares to buy Adcock. Mokhele told a conference call at the time
that talks with the government were going extremely well.
Adcock has been the target of other bids, including from
local firm Bidvest. Adcock's board has said CFR's offer
was the most attractive.
Last year, South Africa rejected a $385 million offer by
South Korea's KT Corp for a stake in Telkom
, saying the telecoms operator was at the heart of its
ambitious broadband roll-out plans.
Adock shares were steady at 68.50 rand by 1547 GMT, slightly
outperforming the broader JSE All-share index.
($1 = 10.2703 South African rand)
(Writing by David Dolan, Editing by Patrick Lannin)