Sigma Healthcare posts record jump on $5.8 billion merger with Chemist Warehouse

(Reuters) -Shares in Australia's Sigma Healthcare surged more than 76% on Wednesday to post a record intraday jump, after the company said on Monday it would merge with Chemist Warehouse Group to form an A$8.8 billion ($5.77 billion) entity.

Shares of the pharmaceutical firm jumped as much as 76.5% to A$1.350 in early trade, hitting their highest level since Oct. 26, 2016. As at 2342 GMT, shares were trading 38.6% higher at A$1.025.

Sigma shares, which were on a trading halt since mid-session last Wednesday, are on track to log their fifth straight day of gains, if trend holds, and were the top gainers in the ASX All Ordinaries index.

Nearly 34 million shares have changed hands, a whopping 27 times the monthly average of 1.25 million shares.

Sigma on Monday said Chemist Warehouse will own 85.8% of the merged company that will supply 1,000 Sigma-aligned pharmacies and own 600 Chemist Warehouse outlets, according to a statement.

The company said it expected the proposed merger to create savings initially estimated at about A$60 million per annum, which are likely to be realized after four years.

Sigma has raised A$400 million at 70 Australian cents apiece, which is at an 8.2% discount to the stock's last closing price on Dec. 6 before it went on a trading halt.

About 572.6 million shares will be issued in the capital raising, which equates to 54.1% of Sigma's existing shares on issue.

($1 = 1.5244 Australian dollars)

(Reporting by Echha Jain in Bengaluru; Editing by Maju Samuel and Rashmi Aich)