Australian Pharmaceutical has sold its 12.96% stake in Sigma Healthcare ((SIG)) for $0.60 a share. Credit Suisse calculates this represents a -$3.5m loss vs the price of the acquisition in December 2018.
Since then, Sigma has rejected merger talks and won back the Chemist Warehouse contract. While expecting that Australian Pharmaceutical would sell its stake, given the limited interest shown in the potential merger, the sale confirms for Credit Suisse that consolidation in the wholesale pharmaceutical distribution industry is unlikely.
Underperform maintained. Target is reduced to $1.28 from $1.40.
Sector: Health Care Equipment & Services.
Target price is $1.28.Current Price is $1.29. Difference: ($0.01) – (brackets indicate current price is over target). If API meets the Credit Suisse target it will return approximately -1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
