Sigma Healthcare Ltd These Boots are made for walking (away)

Research evidence excerpt

Sigma Healthcare Ltd These Boots are made for walking (away)

J P M O R G A N Asia Pacific Equity Research

10 June 2026

Sigma Healthcare Ltd Overweight

SIG.AX, SIG AU

These Boots are made for walking (away) Price (10 Jun 26):A$2.76

Price Target (May-27):A$3.50

Sigma confirmed press reports that it is “engaged in preliminary discussions in Australia

relation to the sale process” of Boots by US private equity firm Sycamore Partners.

Australian Consumer Sector

This follows Sigma’s entry into the UK, announced in May, with a low upfront

capital cost and JV with Greenlight Healthcare. It is prudent for Sigma to evaluate Bryan Raymond AC

all opportunities in the markets it operates in, and entering the Boots data room will (61-2) 9003-6750

bryan.raymond@jpmorgan.com

provide valuable UK pharmacy market insights. Nevertheless, acquiring Boots,

Christina Kim

even at a low multiple, would be a thesis-altering move in our view due to the (61-2) 9003-7082

increased risk profile. Our Overweight rating on Sigma is predicated on high christina.kim@jpmorgan.com

quality organic growth, underpinned by market share gains from incumbents such J.P. Morgan Securities Australia Limited

as Boots over time. Large scale, cross-border M&A is rarely successful long term,

particularly in retail, and with no existing presence in the market. If this does lead

to a transaction, we expect it would require a substantial equity raising and/or

higher levels of debt, impacting return on capital and weighing on Sigma’s

multiple.

• Cross border M&A has a chequered history. Retail acquisitions have a low

success rate, even when these are in the same country and retail category.

Concerns increase significantly for cross border M&A, particularly when

buying from private equity.