THE takeover battle for Australian Pharmaceutical Industries (API) ratcheted to a new level this morning, with confirmation that suitor Wesfarmers has formally acquired a 19.3% stake in the firm.
The purchase followed a previous agreement with API major shareholder Washington H. Soul Pattinson and Company Limited (WHSP), entered into just before Wesfarmers announced its plans for the company (PD 12 Jul).
After being initially rebuffed, Wesfarmers has since increased its offer (PD 16 Sep), and then rival wholesaler Sigma Healthcare Limited entered the API fray with its own bid (TD 27 Sep).
Today Wesfarmers has significantly upped the ante, saying it "remains committed to pursuing its proposal to acquire 100 per cent of the shares in API by way of a scheme of arrangement for cash consideration of $1.55 per share".
Wesfarmers is progressing with due diligence investigations in support of its proposal.
The exercise of the option for the 19.3% stake was priced at $1.38 per share, with Wesfarmers required to make further payments to WHSP such that it receives total consideration per share equivalent to that paid under any successful Wesfarmers acquisition of API.
Wesfarmers noted Sigma's proposed bid for API, saying it is "of the view that the Wesfarmers proposal is superior to the Sigma proposal and is in the best interest of API shareholders".
The company confirmed that given its new status as a major shareholder in API, it would not be voting its 19.3% stake in favour of the Sigma bid.
"Wesfarmers continues to see opportunities to invest in and strengthen the competitive position of API and its community pharmacy partners," said Wesfarmers MD Rob Scott in a statement to the Australian Securities Exchange.
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