UPDATE 2-CFR drops $1.2 bln bid for S.Africa's Adcock, opening door to rival

viernes 7 de febrero de 2014 13:47 GYT

(Adds analyst, CFR CEO Comment)

By David Dolan

JOHANNESBURG Feb 7 (Reuters) - Chile's CFR Pharmaceuticals dropped a $1.2 billion bid for South Africa's Adcock Ingram on Friday, paving the way for Adcock's largest shareholder to overhaul the underperforming drugmaker.

CFR's defeat was widely expected after South Africa's Bidvest Group lifted its Adcock stake to over 34 percent last month, giving it enough to vote down the deal.

Bidvest Chief Executive Brian Joffe has been trying to take control of Adcock for nearly a year, seeing a chance to turn around another underperformer and wanting to add its portfolio of painkillers to his sprawling company that spans shipping to mop sales.

Joffe has a long track record of snapping up laggards and turning them around by focusing on cash flow, capital allocation and shareholder returns.

Adcock has suffered from inefficient distribution and an over-reliance on its home market. Bidvest has vast freight operations, which could be used to push Adcock painkillers and other medicines into the rest of Africa.

"He's now in a position to start exerting his influence," said Nic Norman-Smith, chief investment officer at Lentus Asset Management in Johannesburg, about Joffe.

"He's generally proved that he drives shareholder returns in the businesses that he's owned."   Continuación...