Wesfarmers (ASX:WES) makes $687 million proposal to acquire Australian Pharmaceutical Industries

Company News

by Lauren Evans

Wesfarmers (ASX:WES) has announced that it has submitted a non-binding, indicative offer to acquire 100 per cent of the shares outstanding in Australian Pharmaceutical Industries (API) for $1.38 cash per share. Australian-based Wesfarmers operates in retail, chemical, fertiliser, industrial and safety products.

The proposal price corresponds to a total equity value of approximately $687 million, based on 498.2 million fully diluted shares outstanding, and represents a premium of 21 per cent to the last close price of $1.14 on 9 July 2021.

API is an Australian distributor of pharmaceutical goods and operates a portfolio of complementary wholesale and retail businesses in the growing health, wellbeing and beauty sector. API provides retail support services to pharmacist-owned pharmacy partners through its Priceline Pharmacy, Soul Pattinson and Pharmacist Advice brands, and is a retailer through company-owned health and beauty stores under the Priceline brand.

In addition, API operates Clear Skincare Clinics, a provider of skin treatments, laser hair removal and non-invasive cosmetic procedures, and manufactures pharmaceutical and personal care products through its Consumer Brands business.

Wesfarmers will be seeking support from the API Board and its recommendation of the proposal to API’s shareholders. Majority shareholder Washington H. Soul Pattinson (ASX:SOL) has agreed to vote in favour of the proposal.

Shares in Wesfarmers (ASX:WES) are trading 0.1 per cent higher at $58.07.

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