Sigma Pharmaceuticals Ltd., the target of a takeover bid from Aspen Pharmacare Holdings Ltd., named a former chief financial officer to its top job after posting a record loss.
Mark Hooper, who was the head of finance while Sigma’s profit rose fourfold from 2001 to 2006, will start as chief executive officer in September, the Melbourne-based company said in a statement today. He rejoins a company that has had three top managers leave and whose market value has fallen by half since the loss was announced on March 31.
Hooper could improve Sigma’s business, potentially sparking a higher offer from Aspen, analysts at UBS AG said. Durban, South Africa-based Aspen, the continent’s largest drug company, offered on May 21 to buy Sigma’s outstanding shares for 60 Australian cents each, or a total of A$708 million ($612 million), and assume net debt of A$785 million.
“With leadership, SIP can more effectively seek refinance in order to continue to trade as a standalone company which could, in turn, create price tension in the existing offer from Aspen,” Andrew Goodsall and Dan Hurren, Sydney-based analysts at UBS, wrote in a note to clients today. They are maintaining their “neutral” rating on Sigma and predict the shares will trade at 48 Australian cents in 12 months.
Sigma rose 3.1 percent, the most since May 31, to close at 49.5 Australian cents in Sydney trading. The S&P/ASX 200 Index gained 1.2 percent.
The stock fell by a record on March 31, erasing A$513 million from its market value, after the company posted a full- year loss of A$389 million. Revenue increased 4.5 percent to A$3.22 billion.
“Our view is that Mr. Hooper is very well regarded in the pharmacy industry,” the UBS analysts wrote. “New leadership will likely limit market share losses from customers who may have been concerned” about Sigma’s future, they said.
Hooper is now chief financial officer of PaperlinX Ltd., according to Sigma’s statement. Melbourne-based PaperlinX is Australia’s largest paper manufacturer.
Sigma posted net income of A$73 million in 2006, rising from A$16.81 million in 2001, according to data on its website. Sales climbed to A$2.17 billion from A$1.52 billion in the period.