Sigma shares rocket on Chemist Warehouse deal
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More news: Shares in Sigma Healthcare have rocketed on its proposed merger with bigger rival Chemist Warehouse that will create a pharmacy giant with combined revenues of $6.7 billion. Shares in Sigma surged more than 75% at the open after the stock resumed trading on the ASX but pared gains later. By 10:30am AEDT, Sigma shares were still up 41% at $1.08. The gains come despite a discounted share sale by the company to raise capital and doubts by some analysts that the deal will get a green light from the competition regulator.
Sigma Healthcare to resume trading after share sale linked to Chemist Warehouse deal
The news: Shares in Sigma Healthcare are set to drop on resuming trading on Wednesday after it completed a discounted share sale to realise its backdoor listing deal with Chemist Warehouse.
The numbers: Sigma said it had completed a $400 million entitlement offer, issuing shares at 70 cents each, an 8.2% discount to its last traded price of 76.25 cents. Under the merger terms, it will acquire bigger rival Chemist Warehouse in return for Sigma shares and a cash consideration of $700 million,
The context: The merger will bring together Sigma’s wholesale pharmacy business and its Amcal and Guardian retail pharmacy brands with Chemist Warehouse’s nearly-600 strong network of stores, with the combined entity valued at $8.8 billion. The deal is, however, subject to approval from the Australian Competition and Consumer Commission (ACCC).
The source: ASX announcement
