Watson may bid for Sigma's generics business: report

SYDNEY Mon Aug 2, 2010 12:13am BST

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SYDNEY (Reuters) - Watson Pharmaceuticals Inc WPI.N is considering bidding for the generics business of Australia's Sigma Pharmaceuticals (SIP.AX), valued at around A$600 million, The Age newspaper reported on Monday without citing sources.

A bid by Watson, one of the largest U.S. generic drug makers, would pit it against South Africa's Aspen Pharmacare (APNJ.J), which has bid A$648 million for all of Sigma, a price Sigma said was too low.

Last month, a newspaper report said Sigma has received three bids for its Herron drugs arm and three bids for its Orphan Australia drugs business.

Watson, which has a presence across North America, Europe and Asia and a marketing and a research facility in Melbourne, is yet to make a formal takeover offer but has run its eyes over the business, the paper said.

Sigma, which cut full year profit forecast by 31 percent last month, is battling to pay off A$100 million in debt by March under pressure from its lenders after it broke its loan covenants, reporting a loss for the year to January 2010.

Sigma officials declined to comment on the newspaper report.

(Reporting by Narayanan Somasundaram; Editing by Balazs Koranyi)

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