The Sigma Healthcare Ltd (ASX: SIG) share price is falling after the company released the results of last night's shareholder vote on the proposed merger with Chemist Warehouse.
The Sigma share price is 2.64% lower at $2.95 at the time of writing.
The ASX 200 healthcare stock opened at $3.10 per share, up 2.3% on yesterday's closing price.
But it reversed course quickly and tumbled into the red within the first 15 minutes of trading.
Let's check out the details of the vote.
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Sigma share price down despite merger approval
Sigma shareholders voted overwhelmingly in favour of the proposed merger with CW Group Holdings Limited at last night's meeting in Melbourne.
In a statement released to the market last night, Sigma said the merger received 99.86% approval from shareholders.
Four Chemist Warehouse executives were elected to the Sigma Healthcare board.
Chemist Warehouse co-founder and board chair Jack Gance received 91.92% support to become a non-executive director.
Chemist Warehouse's CEO Mario Verrocchi, Chief Property Officer Damien Gance, and Chief People Officer Danielle Di Pilla each received more than 97% support to become executive directors.
In an address before the Sigma shareholders' vote, Sigma chair Michael Sammells said the merger would accelerate Sigma's strategic direction "by bringing together two complementary businesses with complementary core strengths and expertise to enhance our service offering to customers".
He said:
Sigma has world-class distribution infrastructure and capability that is delivering best in class service
to pharmacies across Australia every day.Chemist Warehouse has unparalleled pharmacy franchise and marketing know-how and expertise which will also help elevate our support for our Amcal and Discount Drug Store franchisees.
Given the nature and value accretion of the proposed transaction, Sigma Directors unanimously recommend that Shareholders vote in favour of the Resolutions.
Sammells said the merger would create a wide range of growth opportunities in Australia and overseas.
Following the Sigma shareholders' vote, a scheme meeting and vote were conducted among Chemist Warehouse shareholders.
The merger received 99.23% support at that meeting.
What's next?
The scheme is now subject to court approval next Monday, 3 February, in Melbourne.
If approved, Chemist Warehouse will lodge the orders of the court with the Australian Securities and Investments Commission (ASIC) the following day.
This will make the scheme legally effective and binding on Chemist Warehouse shareholders.
The indicative date for implementation of the transaction is 12 February.
New Sigma shares issued under the scheme are expected to commence trading on a normal settlement basis on 13 February.
Broker downgrades Sigma shares
According to The Australian, Ord Minnett has cut its rating on Sigma shares to a hold.
