In this briefing:
1. API/Sigma Merger: Sigma Shareholders Need a Better Offer
Australian Pharma Indus (API AU), a pharmaceutical wholesaler, has lobbed an indicative cash-scrip proposal for its competitor, Sigma Healthcare (SIG AU). Under the proposal, Sigma shareholders would receive 0.31 API shares and A$0.23 cash for each Sigma share, implying $0.686 per Sigma share. If the proposal is successful, API/Sigma shareholders would own 63%/37% of the merged API-Sigma.
Unsurprisingly, API believes its proposal delivers fair value to both API and Sigma shareholders. However, our analysis suggests that Sigma shareholders need a bump for the bid to cross the finish line.
