HMC Capital opens back door to Sigma-Chemist Warehouse deal
It’s all happening at Sigma Healthcare. Street Talk understands about 150 brokers from Morgans, Credit Suisse, Wilsons, Bell Potter, Ord Minnett and Morgan Stanley tuned in for a lunchtime briefing from HMC Capital’s managing director Victoria Hardie on Wednesday.
Chemist Warehouse has grown into one of the largest retailers in the country and will list on the ASX through Sigma Healthcare. Eamon Gallagher
This comes as Sigma shares resumed trading on the ASX, popping 68 per cent to $1.27 a share at the open.
On the agenda was a $76 million entitlement offer reserved for existing HMC Capital Partners Fund 1 investors to gain access to Sigma Healthcare ahead of the proposed merger with Chemist Warehouse.
Sources said the offer would be priced at 70¢ a share, in line with what was being offered to existing Sigma shareholders – an 8.2 per cent discount to Sigma’s trading price on December 6.
Capital raised by HMC will be applied by the fund to subscribe for Sigma shares and issued in January. The offer may be upsized to $100 million.
The backdoor play comes as privately owned Chemist Warehouse pursues a merger with its supplier Sigma Healthcare to create an $8.8 billion listed retail giant with more than 1000 company-owned or franchised pharmacies. The merger will give the company a market capitalisation similar to BlueScope Steel and value it significantly higher than other major retailers.
The deal is expected to be completed in the second half of next year, pending regulatory approvals including from the Australian Competition and Consumer Commission.
In a step towards the finish line, Sigma announced on Wednesday it completed the institutional component of its $400 million capital raising to fund working capital ahead of the merger, underwritten by Goldman Sachs. The institutional entitlement offer raised $178 million and was supported by its existing institutional shareholders. The retail component of the entitlement offer will open on Monday to raise $223 million.
“Sigma existing shareholders should take up your rights, new investors should buy on market and this is a must own for large-cap funds, in my view,” influential stockbroker Angus Aitken told his clients on Monday.
David Di Pilla’s HMC Capital, which has a 19.07 per cent interest in Sigma, jumped 16¢ to $5.58 at the open. A former UBS banker, Di Pilla made his name as an investor buying Woolworths’ old Masters property portfolio nearly a decade ago. His HMC Capital has $8.1 billion in funds under management, two-thirds of which is in real estate.
Sigma closed trade on Wednesday up 36.4 per cent to $1.04.
Introducing your Newsfeed
Follow the topics, people and companies that matter to you.
Find out more