Aspen finally made the announcement about Sigma

Just when I thought that we were going to have a slow news day, Aspen finally made the announcement about Sigma, and they are going for it. Yip, you heard right, Sigma and their board have accepted a cash offer from the Aspen board. A little more complicated than that, but we will get into it. And then MTN out with a trading statement, grrrr... lots of different moving earnings numbers makes for difficult comparisons. Who should you really be listening to when tuning into the sphere? I am talking about the investment community specifically, I have a few gripes with the experts who called the crisis.



OK, so the fellows over at Aspen have made "an offer ... to acquire the pharmaceutical business conducted by Sigma on a debt-free basis for a cash consideration of A$900 million (approximately ZAR5 871 million). The Subsequent Offer, which the Sigma Board has undertaken to support... " as per the SENS release this morning. So they are not buying the whole business, just the part that is in their "zone". Which is probably a very good thing in the minds of local shareholders and perhaps striking a balance with the shareholders that side.



Just a reminder, also from the release, Sigma is a: "...manufacturer and marketer of prescription, over-the-counter ("OTC") and generic pharmaceutical products as well as a wholesale distributor of pharmaceutical and consumer products." And just about everyone's email spam catchers have rubbished that line. Again, back to the official release, about Sigma: "It has an extensive product portfolio comprising many well-known and trusted Australian brands which recorded sales revenue of A$671 million in the year to 31 January 2010."



How do Aspen plan to fund this? Through existing cash resources and by raising more money. Is this a done deal? No, regulatory approval is needed from the powers that be, as well as shareholders. I believe in the Aspen management, in our world they are really well regarded, and they have been in the Australian market (successfully too) for the better part of a decade.