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BREAKING NEWS: Woolworths Gazumps Wesfarmers In Pharmacy Deal

Woolworths, who has been desperate to get into the pharmacy business for decades, appears to have snatched the API pharmacy deal from arch rival Wesfarmers.

Woolworths has offered a surprise $872m takeover bid for the Priceline owner trumping rival Wesfarmers’ $763m offer, as the supermarket giant attempts to break into the pharmacy sector for the first time.

The latest offer triggered a 14 per cent jump in API’s share price to $1.70 at the start of trade this morning.

API is the parent company for Priceline Pharmacy, Soul Pattinson Chemist, and Pharmacist Advice. The Woolworths offer is 20% better than what the owner of Bunnings, Kmart and Target offered, an offer that has stunned the market.

The Woolworths group, who are fresh from winning their battle with Mosman Council, has offered $1.75 per share for API in a deal that would value the business at $872 million in a scheme of arrangement transaction, the company said on Thursday.

Woolworths also said it would consider “potential alternative control transaction structure options”, such as a takeover bid that delivered a 50.1 per cent acceptance condition from API shareholders.

“Woolworths Group will engage constructively with API to quickly finalise its due diligence enquiries,” the company said.

“There is a compelling strategic rationale to support Woolworths Group’s acquisition of API,” said Brad Banducci, chief executive of Woolworths Group. “Health and wellness is a large, fast-growing category and API would be a fantastic addition to our food and everyday needs ecosystem.”

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