Bridge in Hand, CFR Makes Adcock Bid

Chile’s CFR Pharmaceuticals has formally bid ZAR12.6bn ($1.2bn) for South African drug maker Adcock Ingram, and has secured a $600m bridge loan to help, it says. CFR has support of shareholders holding 45% of Adcock, and claims letters of support from another 7.5%. It needs to reach 75% for success, and a pension fund holding 19% has come out against the deal. It would pay cash for 51.0%-64.2% of Adcock, and settle the rest with new CFR shares. The ZAR73.51 per share offer price represents a premium to Friday’s ZAR69.30 close. CFR says it has a $600m bridge loan ready to go from BBVA, Santander Chile, Bancolombia and Bank of America. Credit Suisse is advising CFR, with IMTrust providing an evaluation of Adcock shares. Deutsche Bank is advising Adcock, with JPMorgan providing a fairness opinion. The deal is expected to generate revenue and cost synergies of up to $440m, would see Adcock delisted from Johannesburg, where CFR would have a secondary listing. In addition to the bridge funds, CFR is preparing a $750m equity capital raise.