Bidvest bemoans lack of finance for BEE deal

A lack of finance for black investors is holding up Bidvest’s aggressive and serious attempts to dispose of its 38.5% interest in JSE-listed pharmaceutical firm Adcock Ingram, says Bidvest CEO Lindsay Ralphs.

Bidvest’s preferred deal would give black investors a substantial stake in a well-established company that is set for growth, especially after Adcock’s recent acquisition of surgical and skincare products supplier Genop.

Adcock’s fortunes were turned around after Bidvest bought the stake in 2014, replaced the management and restructured operations.

The stake in Adcock, valued at R4.8bn at the current share price, is among assets that Bidvest wants to sell in order to focus on its core divisions.

Speaking after the release of the company’s results for the year to end-June, Ralphs said Bidvest had struggled to sell the stake to black investors because of a lack of finance.

“We have really attempted aggressively and seriously to dispose of [the Adcock stake] over the last two years. We went to the market and said we want to sell to new black entrants. We are trying our level best to facilitate that. But … the real problem is the lack of funding for new black entrants,” Ralphs said.

Bidvest had to turn away international private equity players interested in the Adcock stake as it holds out for potential black buyers, he said.

But he emphasised that Bidvest would not compromise on the price.

Bidvest said in a statement it would only dispose of non-core assets at fair value.

“They must pay the right price. There is no way that I would be doing justice to the shareholders of Bidvest if we sold at a discount,” Ralphs said.

This content was originally published here.

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