After telling the world that it would be disciplined in spending capital, Wesfarmers
(ASX:WES) has surprised the market by announcing its decision to match the $3.35 per share offer made by Hong Kong-based EC Healthcare for SILK Laser
(ASX:SLA). This move comes after Wesfarmers' API was outbid by EC Healthcare in May, when they presented a higher cash offer that was left unmatched at the time.
In April, Wesfarmers kicked off the bidding with a $3.15 per share offer for SILK Laser, but API's bid was overtaken by EC Healthcare's superior offer. Wesfarmers CEO, Rob Scott, had previously emphasised the company's disciplined approach to capital management, leading many to believe that they would not challenge EC Healthcare's higher-priced offer.
However, on Monday, API matched the $3.35 per share offer for the injectables and skincare group. Wesfarmers' health division head, Emily Amos, stated in Monday's announcement that the acquisition of SILK Laser would complement the company's existing Clear Skincare Clinics, providing scale and efficiency benefits through an expanded presence in the attractive and growing aesthetics products and services market.
Amos added, "Wesfarmers Health's acquisition of SILK would provide SILK franchisees and business owners with the benefits associated with being part of a broader healthcare, wellness, and beauty network, as well as access to capital to support future growth."
SILK Laser's board has now switched their recommendation from EC Healthcare to API, unanimously recommending the offer in the absence of a superior proposal and subject to an independent expert's assessment. SILK chairman Boris Bosnich stated, "Wesfarmers Health represents a logical, long-term owner for the SILK business, with the expertise and capacity to support continued growth for SILK and its franchise partners. The API offer provides certainty for shareholders, and we have been pleased with the alignment between the businesses seen through due diligence."
The ball is now in EC Healthcare's court to either come back with a higher offer or withdraw from the bidding process, as Wesfarmers
(ASX:WES) remains determined to secure the acquisition of SILK Laser
(ASX:SLA) and expand its presence in the healthcare and beauty sectors.
