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Aspen Said to Lower Offer for Sigma Pharma as Negotiations Hinge on Price
By Nicky Smith - Jul 5, 2010
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Business ExchangeTwitterDeliciousDiggFacebookLinkedInNewsvinePropellerYahoo! BuzzPrintAspen Pharmacare Holdings Ltd., Africas largest drug company, will lower its A$707 million ($593 million) takeover offer for Sigma Pharmaceuticals Ltd. after completing a review of the Australian drug distributors accounts, a person familiar with the matter said.

A reduced bid also follows talks with Sigma management on the business, the person said, declining to be identified because negotiations are private. Discussions, which hinge on the offer price, are continuing and a final price will balance Sigmas funding needs with Aspens push to make a return on the acquisition, the person said.

Sigma shares have remained below Durban, South Africa-based Aspens indicative offer on May 21 of 60 Australian cents a share, which includes Aspen taking over Sigmas net debt of A$785 million. Sigma, based in Melbourne, said last month it may miss its annual profit forecast after announcing resignations by three top executives following a record loss in March that triggered a 48 percent one-day plunge in the stock.

The Australian market was signaling Aspen will come with a downward-revised offer, Credit Suisse Standard Securities anlayst Mark Wadley said by phone from Johannesburg today.

Sigma, Australias biggest drugs distributor, dropped 2.5 percent to 39.5 Australian cents, the lowest since May 20. Aspen, which declined 4.3 percent last week, declined 5 cents rand, or less than 0.1 percent, to 74.95 rand in Johannesburg.

Ian Smith, an external spokesman for Sigma, didnt immediately return a call seeking comment. Shauneen Beukes, an external spokeswoman for Aspen, said the company declined to comment.

To contact the reporter on this story: Nicky Smith in Johannesburg at [email protected]