announcement stock adjustment, page-5

re: a value buy. Yes as we anticipated - Sigma wanted out.

API really want now to concentrate on business (although they will still listen to options that provide value to shareholders). Key information I will be looking for over next month will be their December Sales figures which the market is usually advised of in January. December is the biggest T/O month of year and 06 cf 05 will be a good indication of where API is really at.

The high profile that API has had in recent months had all been free advertising - "there is no such thing as bad publicity"

The plays in the pharmacy wholesaling market are extremely interesting at the moment. DHL is desperate for market share and is offering pharmacies attractive deals (but are not supplying OTC products). They are trying to meet the Goverments requirements to participate in the incentives offered to full-line wholesalers and have 12 months to meet the standards. They would have loved the API / Sigma merger to go through because they would have picked up some API customers (as would have Symbion).

The crux of the matter is there is no way Sigma, API, Symbion and DHL can all survive. I feel the most vunerable party at the moment is Symbion. Their Pharmacy Wholesaling operation has been steadily losing market share. Mayne has never really got to grips with it all and despite denials would love to get out of this low marging business - pharmacists sense this.

There has to be rationalisation - my tip is that DHL will make the next move by making an offer to API or Symbion.