Wesfarmers Makes $687M Offer For Priceline Owner API
Wesfarmers is making moves into the pharmaceuticals world, making a $687 million offer for Australian Pharmaceutical Industries, owner of Priceline Pharmacies.
The Perth-based Wesfarmers owns the Kmart Group, Bunnings, and Officeworks, among many other holdings.
“The API board notes that its portfolio of pharmacy distribution, health and beauty retail and skin care businesses have attractive characteristics and are well positioned for growth in a number of areas, including acceleration in online sales from API’s investment in Priceline Pharmacy’s leading digital offering, and growth in the performance of its Clear Skincare business as a result of the recent investment in its clinic network,” API said.
“The indicative proposal has been made at a time where COVID-19 restrictions have resulted in store and clinic closures and these have significantly impacted on API’s operational performance,” it continues.
Majority shareholder, Washington H Soul Pattinson, who hold 19.3 per cent of the company, has agreed to vote in favour of a Wesfarmers takeover – assuming a higher offer is not made.
Wesfarmers is actively looking for retail investments, after recently selling 10 per cent of Coles for over $2 billion; it still holds 5 per cent of the supermarket giant.
“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,” Wesfarmers chief executive Rob Scott 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.
“Wesfarmers supports the community pharmacy model, including the pharmacy ownership and location rules, and considers API’s relationships with its community pharmacy partners to be one of its key strengths.
“We see opportunities to build on these relationships and invest to expand ranges, improve supply chain capabilities and enhance the online experience for customers.
“These investments are expected to strengthen the competitive position of API and its community pharmacy partners.”