API announces merger proposal with Sigma Healthcare Limited
Sigma shares suspended from trading pending announcement of a "control transaction" in the business.
Australian Pharmaceutical Industries has just unveiled details of a non-binding indicative proposal to acquire 100% of Sigma Healthcare Limited.
API has amassed a 12.95% stake in its rival, and is proposing that Sigma shareholders would receive 0.31 API shares plus 23c in cash for each Sigma share - equating to 68.6c per share based on the API closing price yesterday.
That represents an almost 70% premium to yesterday's Sigma closing price and a 46.5% premium to the one month volume weighted average Sigma share price.
API Chairman Mark Smith said the API board believes a merger is the best opportunity to deliver significant benefits to both groups of shareholders, saying "API is seeking to work cooperatively with the Sigma Board to create more value for all stakeholders".
"A combined entity would create greater efficiencies in the wholesaling business to the ongoing benefit of all shareholders," he said. "This, in turn would enable the combined business to provide greater assistance to pharmacists as they respond to current regulatory impacts and increasing retail competition, enabling a stronger, viable community pharmacy industry."
Based on publicly available information API believes a merger with Sigma could deliver $60 million in annual savings.
More information in Pharmacy Daily as it comes to hand.
Source: PharmacyDaily.com.au, Friday 14 Dec 2018