Sigma Pharmaceuticals (SIP) is an Australian manufacturer of prescription, over-the-counter and generic pharmaceutical products, as well as a distributer to pharmacies throughout Australia.
Last Friday, SIP said it had received a $707.4 million takeover offer from a mysterious bidder, pitched at 60 cents per share.
SIP later confirmed the unnamed takeover suitor was actually South African-based Aspen Pharmacare Holdings.
The deal comes after a private equity consortium bid for peer Healthscope, which also happens to be one of the sector’s hot stocks, raising speculation that private equity players are courting SIP.
Though SIP has said its underlying business is sound, the market has been demanding management improvements at SIP of late.
SIP has been suffering debt issues and has given uncertain FY11 underlying earnings guidance, so the market consensus is that the takeover deal looks good for SIP.
SIP said it is considering the proposal and recommends that shareholders take no action yet.
SIP was among the hot stocks last Friday, finished up a whopping 37% to $0.48.