Adcock Ingram rejects Bidvest approach as opportunistic

South African generics drugmaker Adcock Ingram (AIP: SJ) has confirmed a non-binding approach from Bidvest to acquire 60% of the company for 6.2 billion rand ($675.2 million), saying the Independent board has fundamental legal and material prudential concerns with the Bidvest letter and will not propose a scheme of arrangement to implement the proposal, as set out.

"The Independent Board recognises that the timing of Bidvest's approach appears to be opportunistic," Adcock Ingram’s chairman Khotso Mokhele said in statement.

The Bidvest letter does not constitute a firm intention to make an offer in terms of the Companies Act. Only the board of directors of a company can propose a scheme of arrangement between the company and its shareholders, and neither the Adcock Ingram board nor the independent board was approached by Bidvest, prior to submission of the Bidvest letter, to do so. What this means is that the Bidvest letter is currently nothing more than a non-binding proposal. This is cause for concern for the Independent Board as Bidvest’s actions have created expectations in the market regarding the likelihood of a transaction being concluded, Mr Mokhele’s statement noted.