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After months counting down the days, we’ve finally arrived at the big day – thanks to a $34 billion merger between Chemist Warehouse and ASX-listed Sigma Healthcare (ASX:SIG), the heavyweight chemist chain is on the local bourse.
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There were hurdles aplenty along the way, of course, most recently shareholder voting in January – but come this morning, everything’s tucked away.
That leaves many with one big question though: Well, what happens now?
Chemist Warehouse joins the bourse
In its simplest sense, Chemist Warehouse is now publicly listed.
Things are a little more complicated than that though. Technically we’re still going to see “SIG” as the ticker on the Aussie trading shelves, with $4.5B Sigma Healthcare now sitting as the home of the chemist outlet chain.
Once this backdoor listing goes through though, the newly-merged ASX titan should leapfrog straight into the top 20 companies on the bourse.
(HotCopper would say SIG lands somewhere between QBE Insurance and REA Group.)
So, how did we get here?
And now for the gritty details – how this backdoor listing came about.
Well, Sigma Healthcare agreed to “acquire” Chemist Warehouse for $700 million in cash back in December 2023. Only, Sigma (who also backed up $300 million more in refinanced debt to see the offer go through) is actually walking away with just 14.25% of the new-look 2025 company investors can buy into.
On the other side of the blockbuster bargain, Chemist Warehouse shareholders, mostly made up of the venture’s franchisees Mario Verrocchi and brothers Jack and Sam Gance, managed to walk away with 85.75% of the entity.
Basically, Sigma’s Chemist Warehouse ‘buy-up’ was a simpler way to get CWG onto the Australian Securities Exchange without running an IPO.
The combo company did have to tick some ASX boxes, but that’s all been long-sorted.
The ACCC too did its due diligence before giving everything the ‘OK.’
Two powers in play on day one
Two things will be key for interested HotCopper investors to watch this Thursday as Chemist Warehouse finally becomes available to trade in Week 7.
The Verrocchi and Gance families, who command a large chunk of the company, have agreed not to sell shares until Sigma’s FY25 results in August. They’ll then be allowed to ship as much as 10% away (if they want to).
However – some franchisees have been un-escrowed now that the whole sale process is wrapped up. There have been talks of a “bloodbath” from the Financial Review should they decide to cash in, though that major bloc did only recently rebuff several investment banks wanting to facilitate that sizeable move.
That doesn’t mean it won’t happen, of course, with legal questions and queries may be the biggest stopper for one big shares sell-down. And, with the chock out from under the door, the involved families may still make individual plays.
Numbers-wise, as much as $750 million to $1 billion worth of shares could be sold by the franchisees straight away. Watch the trades column for those.
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The other side of Thursday’s coin is that index-tracking funds have to get in the game.
That means there is definitely going to be buying as indexes do their due diligence and pick up packets in Sigma Healthcare. That could inject a predicted $2.2 billion into the buying side of the market for the merged company.
No matter what, all eyes will most definitely be on the Chemist Warehouse-Sigma Healthcare stock at open on Thursday; expect it to headline everywhere.
As for a starting point, Sigma closed at $2.76 yesterday. It had been down 1.08%.
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