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- Sigma Healthcare (SIG) walks away from Australian Pharmaceutical Industries (API) merger
- The company will leave the battle for the Australian pharmaceutical chain after Wesfarmers (WES) increased its stake in API to nearly 20 per cent
- Even though Sigma’s offer was higher than Wesfarmers, the company said it is dropping its offer due to “the competitive bid process with its changing transaction and economic considerations”
- On market close for the day, Sigma was up 1.83 per cent, trading at 55.5 cents per share, API was down 1.66 per cent and is trading at $1.49 per share
Sigma Healthcare (SIG) has dropped out of the battle for Australian pharmacy chain Australian Pharmaceutical Industries (API).
The bidding war started in September with ASX 200-lister Wesfarmers (WES), with Sigma upping its offer to beat Wesfarmers.
Sigma offered to buy 100 per cent of API shares for roughly $1.57 each.
Since then Sigma’s share price dropped at the same time as Wesfarmers purchased 95.1 million API shares on October 7, increasing its chances for a successful acquisition.
This increased Wesfarmers stake in API to 19.3 per cent and told of its intention to vote no to the Sigma deal.
While the Board of Sigma said the deal is very strong it has decided to drop out of purchasing API.
“Sigma believed it made economic, commercial and strategic sense to pursue the merger proposal between Sigma and API on the terms we presented,” Chairman Ray Gunston said.
“However, after further assessment, and in the context of the competitive bid process with its changing transaction and economic considerations, Sigma has made the decision not to proceed with this current proposal.”
Mr Gunston said he believes Sigma will continue grow without the API merger.
“The Sigma team will keep on working to finalise the completion of our infrastructure upgrade, including our ERP project, and to remain focused on leveraging our infrastructure to create greater shareholder value,” he said.
On market close for the day, Sigma was up 1.83 per cent to 55.5 cents per share, while API was down 1.66 per cent to $1.49 per share.
