JOHANNESBURG – The top shareholder in South African drug maker Adcock Ingram has rejected a $1.3 billion takeover offer from Chile's CFR Pharmaceuticals , saying on Thursday the deal was not in its best interests.
The Public Investment Corporation, a state-owned pension fund with about a 14 percent stake in Adcock according to Thomson Reuters data, said it would not back the cash and share offer as it is currently structured.
"The PIC management and investment committee have come to the unanimous decision that it is not in the best interest of our shareholding to support the CFR offer in its current form," the fund's chief executive, Elias Masilela, said in a statement.
The PIC, which has more than 1 trillion rand ($97.37 billion) of government employee pensions under its custody, also said in it was taking a long-term view on its Adcock investment.
The fund has previously said it would prefer a local buyer for Adcock, which is expected to play a vital role in the ANC-led government ambitious plant to overhaul healthcare.
CFR said in September it would offer 12.6 billion rand in cash and shares to buy South Africa's No.2 drug maker, which supplies equipment to public hospitals and life-prolonging antiretrovirals drugs to HIV/AIDS patients.
South Africa has a history of sinking cross-border deals if they are seen as a threat to initiatives aimed at raising living standards among the country's black majority.
Last year, the government rejected a $385 million offer by South Korea's KT Corp <030200.KS> for a stake in Telkom , saying the telecoms operator was at the heart of its ambitious broadband roll-out plans.
CFR already has the support of shareholders with a 45 percent stake in the Midrand-based company but it would need 75 percent for the deal, a rare Chile-South Africa tie-up, to go through.
Shares in Adcock were little changed at 68.29 rand by 0820 GMT (3:20 EDT), broadly in line with the broader JSE All-share index .
(Reporting by Tiisetso Motsoeneng; Editing by David Dolan)