Medica and Sopharma signed a revised merger agreement



Leading generic pharma producer Sopharma (3JR BU) and medical consumables producer Medica (5MA BU) signed a revised merger agreement, according to a regulatory filing with the stock exchange.

Medica shareholders are getting 0.8831 Sopharma shares

The revised agreement followed recommendations from the Financial Supervision Commission (FSC) based on the initial agreement filed for approval. Both companies revised the conversion ratio from 0.9486 to 0.8831 Sopharma shares for each share in Medica. The consumables producer to merge into Sopharma and cease to exist after the transaction is finalized. The revised agreement is yet to be approved by the FSC.

Background of merging Medica

In February 2015 Sopharma offered to buy 3.35 mln. Medica shares at a price of 3.5 leva per share, representing a 33.28% stake in the company, aiming to fully acquire it. In September 2015 pharma leader raised its stake in Medica to 66.72% and in May 2016 it boosted its stake to 97.94%.

Medica: Improved revenue and suppressed profit in 2016

2016 net sales revenue rose to 18.4 million leva last year, compared to 17.4 million leva in 2015, Medica announced in its 2016 annual financial report published at the Bulgarian Stock Exchange.

Consolidated net profit decreased by 8% to 2.2 million leva with production costs increase to 10.8 million leva in the review period compared to 9.9 million leva in 2015.

Stocks performance

For the first 3 months of 2017 Sopharma shares rose 28,52%. From March 2016 pharma leader stocks went up 41,3%.

Medica shares rise 1.47% as of the beginning of 2017 but as of March last year they are registering a decline of 1,43%.

Tender for minority stake of Unipharm pending approval

On 20 March 2016 Sopharma filed a revised tender for the shareholders representing 22,37% of Unipharm shares. This is the legal requirement as Sopharma already owns 77,43% of Unipharm capital. The tender proposes BGN 4,35 per share for Unipharm shares. Statement of the Financial Supervision Commission is expected.

Unipharm is an established manufacturer of medicinal products with two thirds of production placed on foreign markets as Russia, Ukraine, the Baltics, the Caucasus, Middle Asia and others.

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