Bidvest makes a R52 bid for Adcock

Bidvest have announced this morning that after consultation with two separate parties, Blue Falcon (10.59 percent currently) and the Bophelo Trust (3.6 percent in total), the company would buy their Adcock shares at 52 Rand apiece. These are not ordinary shares, they are linked to an empowerment deal (dividend shares), the parties above would be left with 2.571 million "dividend-acquired Adcock ordinary shares." As you can see, those shareholders above are sizeable, this then triggers an offer to minorities at the same price, 52 Rand a share. Remembering that Bidvest and CIH paid around 70 Rand in order to get a 34 odd percent controlling stake. The 52 Rand offer is a premium to the 30 day VWAP of 13 percent, not exactly a kings ransom. Who are the other main shareholders, who would have to OK any deal of any sort? Here:





And the share price trading above the offer price tells you that if the PIC had thought that 52 was a good price, they would be included in all of this. And they are not, of course. So that tells me that perhaps Prudential and the PIC are going to say no. The PIC was very vocal in turning down the Chilean offer of over 72 odd Rand, approving that Bidvest became a bigger shareholder. It is what they call a cheeky bid. The market price is clearly telling our next door neighbour (the Bidvest back stairwell is an underhand toss away) that it should be more. At the same time the company has released results that perhaps leave a lot to be desired. Revenue up one percent on a comparable basis (the company has changed their year end to match that of Bidvest), no dividend declared. Look, I think what you need to know is that Bidvest put their guy in there, they are taking an opportune moment in time to pounce.