Retail pharmacy company Sigma Healthcare Limited has rejected a takeover offer from Australian Pharmaceuticals Industries (API) saying it is “not in the best interests of Sigma shareholders”.
On Wednesday morning, Sigma’s Board stated that while it agreed the tie-up could save the combined company $60 million a year in synergies from consolidating its supply chain, there were also savings to be had from cost-cutting as a stand-alone company.
“The Board is confident that after thoroughly assessing the outlook of Sigma on a standalone basis, the current API proposal does not reflect the long-term prospects and value inherent in Sigma having regard to the reset cost base of the business and our own growth agenda,” Sigma chairman Brian Jamieson said.
“Therefore, after considering the API Proposal in detail, we believe it is not in the best interest of our shareholders.”
A decline in API’s share price also means the cash and equity offer is worth 12 per cent less than when it was made in October, Sigma said.