How long before Bidvest flogs its prized non-core assets?
Bidvest wants to sell Adcock Ingram stake to black investors but facilitating funding has proved difficult
Two years ago Bidvest said it would review all its non-core investments. Indeed, the group has disposed of some of its assets including the entire interest in Bidvest Namibia Fisheries (Bidfish). But it is the fate of assets such as Adcock Ingram (38.4%) and Comair (27.2%) that many will be interested in.
Presenting the group’s 2018 financial results on Monday, CEO Lindsay Ralphs singled out the two companies saying they had delivered good performances and helped boost Bidvest’s associate income by 21.7% (R45m ) to R424m.Given the quality of these two assets, Bidvest is dictating the terms and pace of the disposals. For instance, the sale of the Adcock Ingram interest has not been implemented because Bidvest wants to sell to black investors and has turned away international private equity players interested in it. But facilitating funding for black investors has proven difficult. Failure to get the finance may see the company drop this condition and sell the stake, which has been valued at about R4.5bn to whoever wants to buy it.
On the other hand, Ralphs has intimated that Bidvest may hold on to its 27.2% interest in Comair, which he has described as an incredible and well-run company.
In any event it is clear that Bidvest is in no hurry to dispose of its interests in these two companies and maybe that is a good thing. Both Comair and Adcock Ingram have strong brands and look set to continue delivering strong performances for the foreseeable future.