VIAGRA NEWS

Source: Brisbane Times

Date: 21-Jun-2007

Sigma Pharmaceuticals Ltd is considering its options after losing the bidding for Symbion Health Ltd's consumer and pharmacy services divisions.

Sigma managing director Elmo de Alwis said those options could include legal action.

"We'll talk to our lawyers, see what their view is, see what our next steps are," Mr de Alwis said.

"We certainly won't throw good money after bad, but we want to find out legally what is our standing and where we can go from there.

"We believe that the shareholders of Sigma and the shareholders of Symbion have been denied the opportunity to maximise value."

Mr de Alwis said he could not say yet what Sigma might do if its efforts to acquire Symbion's consumer and pharmacy services divisions did ultimately fail.

"They're all issues that we'll have a look at," he said.

On Wednesday, a $1.085 billion joint offer for Symbion's consumer and pharmacy services divisions, made on Monday by Sigma and a private equity consortium led by investment firm Carnegie Wylie (CWC Entity), was gazumped by a competing bidder by just one dollar.

Symbion said on Wednesday night it had received a counter-proposal from private hospitals operator Healthscope Ltd and private equity firms Ironbridge Capital and Archer Capital (IAC consortium), under which the two Symbion divisions were valued at $1,085,000,001.

Healthscope and the IAC consortium had offered $1.043 billion for the consumer and pharmacy divisions prior to Sigma's joint offer of $1.085 billion.

Symbion said the counter-proposal from Healthscope and the IAC consortium was superior to Sigma's joint offer of $1.085 billion. Symbion had accepted the Sigma joint-offer as superior before the counter-proposal from Healthscope and the IAC consortium.

Symbion said in accordance with the original document supporting the sale of the Symbion assets, it was not permitted to consider any further revised offers for the consumer and pharmacy services businesses from other parties, including Sigma and the CWC Entity.

Symbion would therefore proceed with the sale of its businesses to Healthscope and the IAC consortium.

But Symbion also said on Wednesday night it had received a "late" unsolicited revised offer from Sigma and the CWC Entity, valuing Symbion's consumer and pharmacy services divisions at $1.105 billion.

However, the revised Sigma joint-offer could not be considered because it failed to meet a deadline for offers to be submitted.

The whole Symbion group of five divisions is subject to a $2.9 billion cash-and-scrip takeover offer from Healthscope, which is Australia's second-biggest private hospital operator.

Under the original Healthscope offer, Healthscope would acquire all of Symbion. Subsequently, Healthscope would keep Symbion's pathology, imaging and medical centres divisions. The IAC consortium would acquire the pharmacy services and consumer businesses for $1.043 billion.

Under a scheme implementation deed between Symbion and Healthscope, an opportunity was provided for other parties to bid for all of Symbion or just the consumer and pharmacy services divisions.

But the deed allowed only one bid per potential acquirer to ensure that the "best bids" were submitted. The deadline for bids was Monday, June 18.

Healthscope and the IAC consortium were permitted a right to counter-bid because they were the original bidder.

Mr de Alwis said Sigma's lawyers would look to see whether there was any way Sigma could get past the scheme of implementation deed.

Mr de Alwis said he was disappointed Symbion had rejected Symbion's offer of a higher price.

"The thing is it was really not another offer. They (Symbion) had an offer from us (the offer of $1.085 billion) which they found acceptable. This (latest move by Sigma) was purely increasing our offer price. It was an amendment to an offer that they (Symbion) had already accepted.

"It's not like it delayed their decision-making."

Mr de Alwis said if Symbion were more flexible with its time-frames, it might be able to get a better deal for shareholders.

"Who's going to object?" he said.

"Overall, it doesn't push back the whole program."

"If the purpose of separating out the pharmacy and consumer businesses was to maximise the value to shareholders, I don't think what Symbion has done does that."

Symbion shares fell seven cents to $4.18 at 1207 AEST on Thursday, Sigma rose one cent at $2.27 and Healthscope slipped five cents to $5.44.