Robert Laing

Robert Laing

Splitting money into change does not make you richer, but Tiger Brands is likely to demonstrate for the third time with Adcock Ingram that breaking shares into smaller units boosts their overall value.

Investors who bought four Tiger Brands shares in 2001 for about R260 got an Astral Foods share in April 2001 and then four Spar shares in October 2004. This portfolio of nine shares has more than tripled to R874 even though competition authority investigations have dragged down both Tiger Brands' and Astral's share prices.

Each Tiger Brands share will now spawn an Adcock Ingram share on August 25. Tiger Brands shareholders will keep a share representing about 70percent of the group measured by earnings, and get a new Adcock Ingram share worth the remaining 30percent.

Jonathan Louw, Adcock Ingram's managing director, said the company planned to invest R850million on expanding. One of the reasons given for unbundling Adcock Ingram is that it needs to step up investment to achieve its ambition of becoming a global player in the generic pharmaceuticals industry.

About R2billion of Adcock Ingram's R3billion turnover comes from pharmaceutical products, and the remaining R1billion from hospital products.

Adcock is the local representative of Swiss multinational Baxter, whose products account for about 70percent of its hospital products sales.