Sigma Healthcare gains; Morningstar positive on 'largest' hurdle clearance for merger

Sigma Healthcare

08/11/2024 02:35

(Updates)
    ** Shares of Australia's Sigma Healthcare  SIG.AX  rise as
much as 7.41% to A$2.610
        ** Australia's competition watchdog on Thursday gave its
nod for Sigma and discount pharmacy firm Chemist Warehouse to go
ahead with their proposed A$8.8 bln ($5.86 bln) merger
  
    ** Morningstar says the remedies that both firms have taken
do address competition concerns
        ** Brokerage raises fair value estimate for Sigma by 99%
to A$1.55 apiece with the largest merger hurdle cleared
  
        ** We view the acquisition as strategically sound and
transformational for Sigma as it creates Australia’s largest
pharmacy chain backed by significant distribution infrastructure
- Morningstar    
    ** Analysts at Citi raise PT for Sigma Healthcare  SIG.AX 
to A$2.50 from A$1.40; maintain "neutral" rating 
    ** Brokerage expects the combined group to generate EBIT of
~A$800 mln in FY26, its first full year
    ** Stock has more than doubled in value this year, as of
last close

($1 = 1.5013 Australian dollars)

 (Reporting by Namrata Verma and Sherin Sunny in Bengaluru)
 ((Sherin.Sunny@thomsonreuters.com))