20100816
africanews

MELBOURNE/JOHANNESBURG (Reuters) - South Africa's Aspen Pharmacare will buy the drugs unit of Australia's Sigma Pharmaceuticals for $804 million in cash, having sweetened its offer to gain about a quarter of Australia's generic market.

The bid from Aspen likely ends a three-month tussle between the two companies over the price of debt-laden Sigma.

Aspen, 19 percent owned by Britain's GlaxoSmithKline, said it would pay A$900 million for the unit, well above the A$648 million it previously offered for the entire company.

Sigma, whose shares have been trading at about half what they were a year ago, had pressed Aspen to up that offer.

Instead of a full takeover, Aspen opted for the drugs manufacturing arm, the asset it coveted most, leaving Sigma with its drug distribution and pharmacy business.

Sigma's shares jumped as much as 7 percent on the bid, before trimming some gains, as the deal moved it closer to resolving long-standing debt problems.

Sigma's second-largest shareholder, Orbis Investment Management, gave the sale a thumbs-up.

"I think it's a good price," Simon Marais, chief investment officer at Orbis, which owns 9.25 percent of Sigma, told Reuters.