Mystery bidder offers A$707 million for loss making Sigma Pharmaceuticals

Sigma Pharmaceuticals Ltd, Australia's loss-making OTC drugs and prescription pharmaceuticals maker, today revealed that it had received an A$707 million ($579 million) takeover bid, sending its share soaring by 50 per cent.

Sigma did not name the mystery bidder, but said that it has received a conditional proposal of $A60 cents a share, representing a premium of 71 per cent over its closing price yesterday.

''The Sigma board is considering the proposal and recommends that shareholders take no action at this stage. Sigma will make a further announcement in due course,'' the company said in a statement today.

Croydon, Melbourne-based Sigma is Australia's largest generic drug maker, owning three of Australia's best known pharmacy banner brands Amcal, Guardian and Amcal Max.

The company that lost more than half its value after reporting a full-year loss of A$389 million in March, had its shares suspended from trading for five weeks to 31 March on allegations of accounting irregularities and for making preferential deals with large pharmacy chains at the expense of smaller chemists.

The company had defaulted on debt repayments and creditors were forcing the company to sell of assets in order to pay them A$90 million by 30 November 2009, but subsequently Sigma was able to renegotiate its debts.

Since then, the company faced desertions with its chief executive Elmo de Alwis quitting in April, chief financial officer Mark Smith quitting last week, and chairman John Stocker and non-executive director Doug Curlew announced yesterday that they were also stepping down.

Founded in 1912 by two Melbourne pharmacists, Sigma Company Limited changed its name to Sigma Pharmaceuticals Ltd following its merger with Arrow Pharmaceuticals in December 2005.