Takeover offer rejected as “not in the best interests of Sigma shareholders”.
Sigma Healthcare has just released an update on Australian Pharmaceutical Industries’ takeover plan, following the receipt of a letter from API reconfirming the non-binding indicative proposal and a “limited form of due diligence focused on the synergy and regulatory workstreams”.
Sigma said it had now completed a detailed assessment of the API plan, and also conducted its own standalone business review identifying cost efficiencies of more than $100 million deliverable over the next 18-24 months.
“With the benefit of the detailed assessment of the future potential for Sigma on a standalone basis, and the due diligence conclusions, the Board of Sigma has concluded that the API Proposal is not in the best interests of Sigma shareholders,” said Sigma Chairman Brian Jamieson.
“The Board is confident that after thoroughly assessing the outlook of Sigma on a standalone basis, the current API proposal does not reflect the long-term prospects and value inherent in Sigma, having regard to the reset cost base of the business and our own growth agenda,” he added.
Jamieson noted that since the date of the proposal on 11 October 2018 the API share price had declined over 15%, and also that returns to Sigma shareholders would depend on a number of key factors including ACCC approval, the successful integration of the businesses, capturing the proposed synergy benefits as well as the continued trading performance of both businesses.
More details in tomorrow’s issue of Pharmacy Daily.