Aspen Pharmacare Lowers Its Takeover Offer for Sigma 8.3% to $550 Million

Aspen Pharmacare Holdings Ltd., Africa’s biggest drugmaker, offered A$648 million ($549 million) for Sigma Pharmaceuticals Ltd., lowering its bid by 8.3 percent after examining the Australian company’s books.

Aspen offered 55 Australian cents a share for Sigma, the Durban, South Africa-based drug company said in a statement today. The bid is 39 percent higher than Sigma’s closing share price of 39.5 cents yesterday. The shares today rose the most in six weeks.

The purchase would give Aspen access to Australia’s biggest drug distributor by market share. Aspen’s offer, which has 11 conditions, comes after Sigma said last month it may miss its full-year profit forecast and announced resignations by three top executives following a record loss in the 12 months to January that triggered a 48 percent one-day plunge in the stock.

“The list of caveats there would suggest that there’s still a lot of uncertainty,” Dan Hurren, a health-care analyst at UBS AG, said by phone from Sydney. “There’s a view out there that this offer is too low and Sigma can trade out of this, and it’s undervalued. A lot of people think that,” Hurren said.

Sigma shares jumped 14 percent to 45 cents in Australian trading, the most since the company received an indicative, non- binding offer from Aspen of 60 cents a share on May 21. Sigma shares have remained below Aspen’s original offer price since the African company made its initial bid. Aspen shares fell 0.2 percent to 76.09 rand at 10:02 a.m. in Johannesburg today.

Sigma’s board is considering the proposal and recommends that shareholders take no action at this stage, it said in a separate statement today, adding it will make a further announcement about the proposal “in due course.”

Exclusivity Extension

Aspen’s review of Sigma is continuing and its 11 conditions include a break fee payable to Aspen if the deal doesn’t proceed for certain reasons, and the extension of an exclusivity period for reviewing Sigma’s financial accounts to Aug. 2 from July 5. Aspen would assume net debt of A$785 million.

A group of Sigma’s shareholders plan to sue the company for breach of continuous disclosure and misleading or deceptive conduct, said Ben Phi, a senior associate at Slater & Gordon Ltd., the law firm coordinating the class action. The shareholders will seek damages from Sigma, Phi said by telephone from Melbourne yesterday, declining to say how much.

“If shareholders who don’t like the look of this deal are also involved in that lawsuit, they may feel that they could scuttle the offer by continuing with the lawsuit,” Hurren said.

The “vast bulk” of Sigma’s institutional shareholders are participating in the action, Phi said. The company hasn’t filed its papers yet and hasn’t spoken to either Sigma or Aspen about the suit, he said.

“All we know is what we’ve read in the papers,” Ian Smith, an external spokesman for Sigma, said in a telephone interview today. “I don’t believe we’ve had anything formal.”

To contact the reporter on this story: Simeon Bennett in Singapore at

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