for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Healthcare

UPDATE 1-Adcock reaffirms friendly buy-out bid for CMSA

* Says ready to buy CMSA without supply agreement

* Adcock surprised by supplier Cipla India’s rejection

* CMSA shares up nearly 3 pct

(Adds details, Cipla India’s comments)

JOHANNESBURG, May 6 (Reuters) - South Africa No.2 drug maker Adcock Ingram AIPJ.J reaffirmed its friendly buyout bid for Cipla Medpro South Africa (CMSA) CMPJ.J despite threats to scrap a supply agreement with CMSA by its drugs supplier.

CMSA's drugs supplier, the Bombay-based Cipla Limited CIPL.BO has rejected the proposed 2.1 billion rand ($246.4 million) offer for CMSA, its South African partner, saying it would not be in the best interest of its shareholders.

Cipla Ltd. does not hold any shares in CMSA.

“Adcock is surprised that Cipla India, as a principal supplier to CMSA, but not a shareholder, has decided to comment on a potential transaction affecting CMSA, without first waiting for the board of directors of CMSA,” Adcock said in a statement.

Shares in CMSA rose 2.86 percent to 3.96 rand by 1233 GMT, while Adcock gained 0.10 percent to 41.10 rand.

Adcock, which has just over 35 percent backing from CMSA shareholders in favour of its offer, has said it needs a written confirmation from Cipla India that the drug supply agreement would not be scrapped if the deal goes through.

On Wednesday, Adcock said it was ready to go ahead with the deal even if it did not have the written confirmation guaranteeing the supply agreement from Cipla India and CMSA.

CMSA has a 20-year arrangement, signed in 2005, to sell products developed by Cipla in South Africa.

Amar Lulla, Cipla India’s CEO, told Reuters in an e-mailed statement his firm was still opposed to the deal.

“We have a functioning and growing network of distribution in Africa and don’t need Adcock Ingram to advance or improve this,” said Lulla, when asked why the company rejected the deal that would likely to boost its scope in Africa.

On April 9, Adcock Ingram said it planned to offer 4.75 rand per CMSA share to boost its presence in the generic drug market. CMSA is considering the proposal. [ID:nL9157805] ($1=8.522 Rand) (Reporting by Tiisetso Motsoeneng; editing by Mike Nesbit)

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up