Wesfarmers Set To Buy Priceline Owner After Higher Bid Approved
Wesfarmers’ bid to take over Priceline owner Australian Pharmaceutical Industries (API) has taken a step forward, with the API Board indicating it will support a revised deal at a higher price.
The new offer of $1.55 per share comes after the API board knocked back a $687 million offer at $1.38 per share in late July, and is despite a recent drop in API shares to $1.27. The Board has now said it will unanimously recommend shareholders agree to the proposition pending a better offer, and is showing Wesfarmers its financials for due diligence.
According to Wesfarmers Managing Director Rob Scott, the retail giant has no intention of lobbying against federal community pharmacy laws, which since 1990 have barred retailers from operating pharmacies, stipulating that they must be pharmacist-owned; Scott said Wesfarmers supports the community pharmacy model.
“If the proposal is successful, we see opportunities to invest to 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.
“API would also provide the basis of a new Healthcare division of Wesfarmers and a platform from which to invest and develop capabilities in the growing health, wellbeing and beauty sector,” he said.
Wesfarmers and API have entered a process deed while due diligence has performed, and the retailer has exclusivity until October 16 to make a binding offer.