Sigma Healthcare Ltd. said its board rejected Australian Pharmaceutical Industries Ltd.'s takeover offer, noting the transaction is not in the best interests of its shareholders.
Australian Pharmaceutical Industries, or API, offered to acquire all the shares in Sigma for 0.31 of an API share and 23 Australian cents in cash per Sigma share. API already owns 12.95% of Sigma Healthcare.
Sigma's board said significant shareholder value could be realized if it continues as a stand-alone company when it implements cost cutting initiatives. These measures could result to more than A$100 million of cost savings in the next two years, the company added. Meanwhile, a merger with API will generate A$60 million of synergies.
API is reviewing its shareholding in Sigma, the company said in a March 13 news release.
Rowville, Australia-based Sigma Healthcare is also focused on wholesale and distribution of pharmaceutical products.