The non-binding indicative proposal from API to acquire all Sigma's shares was sent in December 2018 and since January 2019, the two wholesalers have engaged in a limited form of due diligence, focused on the synergy and regulatory workstreams.
Sigma Healthcare (SIP) shares slumped 15% at one stage yesterday after rejected a half-hearted takeover offer from rival Australian Pharmaceutical Industries (API).
"It's a disappointing development and hard to understand how this path forward is in the interests of either Sigma or API shareholders", he told the Financial Review.
Sigma chairman Brian Jamieson echoed his comments, saying: "The board is confident that after thoroughly assessing the outlook of Sigma on a standalone basis, the current API proposal does not reflect the long-term prospects and value inherent in Sigma, having regard to the reset cost base of the business and our own growth agenda".
As of the market close on Tuesday, the offer was worth 67 cents a share, Sigma said.
The deal was worth $726 million at the time but the fall in the API's share price means the deal, which is to be financed with cash and API shares, is now worth less than $700 million.
Sigma completed its own review in February and reported that it identified $100 million in annual cost savings after completing a four-month strategic review which looked at the company's future after the lucrative Chemist Warehouse contract ends this year.
Sigma (ASX:SIG) and API (ASX:API) shares in the past six months.
"Based on Sigma's publicly disclosed earnings guidance, it is clear that a substantial portion of the claimed $100m cost savings will be offset by lost Chemist Warehouse revenue".
Mr Hooper pointed to Sigma's soon-to-be debt-free balance sheet, with the $300 million of working capital freed up from the Chemist Warehouse contract to be directed to growth opportunities, including aquisitions, creating more value for suffering investors.
API shares fell 3.5% to $1.35 yesterday.