Investment banks have been testing fund managers’ appetite to buy more of HMC Capital’s shares in Sigma Healthcare, fuelling suggestions the David Di Pilla-led business may sell more stock.
Sigma revealed on April 2 that HMC Capital had divested 4 per cent of Sigma at between $1.20 and $1.31 a share.
The holding has reduced from 19.07 per cent to 15.03 per cent with the $80m-plus selldown. Mr Di Pilla snapped up his shares at about 70c in 2022.
The thinking is that Mr Di Pilla, HMC Capital managing director, could sell the same amount again, following the Goldman Sachs-advised trades, judging by what’s been pitched around the market in the last two days.
Sigma shares soared more than 70 per cent in December when it revealed it was planning an $8.8bn merger via a back door listing with retail giant Chemist Warehouse.
The Australian Competition & Consumer Commission has now launched a consultation process about the merger.
Perhaps Mr Di Pilla, who has equity capital markets whizz and ex-UBS colleague Robbie Vanderzeil working for him, is worried about the outcome, with the powerful Pharmacy Guild, which holds much political sway, against the deal.
It’s been said before that the tie-up between Sigma, a pharmacy wholesaler and retailer, and Chemist Warehouse is a slam dunk from a regulatory perspective, because it will result in cheaper prices for customers.
But there’s no guarantee, as the ACCC has been taking a hard line on deals of late.
The main concern is its new retail market power could knock competitors out of the market, although supermarkets also compete in the space.
A deal may come with conditions such as the Amcal and Guardian franchise brands being retained, or forced asset sales, which could cause the Sigma share price to fall.
Mr Di Pilla is a cousin of the Chemist Warehouse co-founder Mario Verrocchi. After helping to bring Chemist Warehouse, which operates with a complex franchise structure, and Sigma together, he may see his work as done.
Perhaps he sees his work done, perhaps he’s hedging his bets or views it wise to reduce his position ahead of the ACCC ruling.
But it looks like there could be more selling to come.
Treadstone, Citi tapped for Newmont’s $US1bn sale
Australian advisers have been assisting Newmont on asset sales.
MAC raises equity after passing on $1bn Portuguese acquisition
Metals Acquisition is understood to have been looking to buy Portuguese mine Neves-Corvo but has now moved on.