AUSTRALIAN Securities Exchange (ASX) listed conglomerate, Wesfarmers, has launched a $687 million bid for pharmacy wholesaler, Australian Pharmaceutical Industries (API).
The unsolicited, non-binding indicative offer was announced this morning (PD breaking news), with API's major shareholder, Washington H Soul Pattinson, which owns 19.3% of the business, agreeing to vote in favour of the proposal.
The offer would see Wesfarmers - which divested its ownership of Coles in 2018, retaining a 4.9% stake in the supermarket giant - purchase 100% of API's shares for $1.38 per share, a 21% premium on Fri's closing price of $1.145.
Wesfarmers Managing Director, Rob Scott, said the acquisition of API would provide an attractive opportunity to enter the growing health, wellbeing and beauty sector.
"If the proposal is successful, API would form the basis of a new healthcare division of Wesfarmers and a base from which to invest and develop capabilities in the health and wellbeing sector," he said.
"The combination of Wesfarmers and API is a compelling opportunity to capitalise on API's strengths and positioning in these markets, while drawing upon Wesfarmers' capabilities in retail and distribution, our strong balance sheet and our willingness to invest in our businesses for growth over the long-term."
Responding to the bid, the API Board said it was undertaking an analysis "of whether the indicative proposal is reflective of the long-term growth prospects of API and the expected short-term impacts of the pandemic-related lockdown restrictions".
"In the meantime, API shareholders should not take any action in relation to the indicative proposal," the API Board said.
A spokesperson for the Pharmacy Guild of Australia told Pharmacy Daily that the organisation was monitoring the bid and examining "any possible implications of it".
"The boards of both Wesfarmers and API have as a first obligation to act in the interests of their respective shareholders," the spokesperson said.
"The Guild similarly has an obligation to its members and its members' patients and it will monitor this bid accordingly."
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