Wesfarmers will make a foray into the health and beauty sector after winning the takeover battle with Sigma Healthcare for Priceline owner Australian Pharmaceutical Industries.
Wesfarmers will make a foray into the health and beauty sector after winning the takeover battle for Priceline owner Australian Pharmaceutical Industries, just days after Sigma Healthcare withdrew its rival bid.
In an announcement to the ASX this morning, the retail giant confirmed it had entered into a scheme implementation deed with API, through which it would pay $1.55 per share.
The offer was an increase on the play the Perth conglomerate had made for API back in July, when it offered $1.38 per share for 100 per cent of the business.
Wesfarmers upped its offer to $1.55 on September 16 after its first was rejected.
A fortnight later, Sigma made a counter-offer with a cash and scrip proposal valued at about $1.51 per share.
But Wesfarmers responded by purchasing a 19.3 per cent stake in the company on October 7, effectively blocking the bid by gaining the power to vote against it.
The scheme allows for the payment of fully franked dividends up to 5 cents per API share, including the 2 cents per share final dividend declared by API, with the cash consideration of $1.55 to be reduced by the cash component of any such dividends.
The API board has unanimously recommended shareholders vote in favour of the scheme, which is still subject to shareholder, court and regulatory approval.
API is expected to hold a meeting of shareholders to consider the scheme early next year.
Wesfarmers managing director Rob Scott said the acquisition would provide an attractive opportunity to enter the growing health, wellbeing and beauty sector.
“Wesfarmers continues to see opportunities to invest in and strengthen the competitive position of API and its community pharmacy partners by expanding ranges, improving supply chain capabilities and enhancing the online experience for customers,” he said.
“In addition to our discussions with API management, we have engaged with industry stakeholders during due diligence.
“As we have previously stated, Wesfarmers supports the community pharmacy model, including the pharmacy ownership and location rules.
“Wesfarmers recognises the importance of strong relationships with our trading partners and we look forward to working closely with API’s pharmacy partners, suppliers and other industry stakeholders.”
