Retail conglomerate Wesfarmers (ASX:WES)
sweetened the deal to takeover Priceline owner, Australian Pharmaceutical Industries (ASX:API)
for $770 million.
Wesfarmers increased its bid by 17 cents to $1.55, a 37 per cent premium, the trading price before the initial offer API’s board rebuffed the company’s initial offer of $1.38 in July on the basis that they undervalued the company.
Washington H. Soul Pattinson and Company (ASX:SOL)
who owns 19.3 per cent shareholding in API is in favour of Wesfarmers’ revised offer.
The sweetened offer was enough for API’s board to open its books to Wesfarmers for due diligence on the agreement that they unanimously recommend shareholders to accept the offer, on the terms that no superior offer is received, and an independent expert gives their blessing.
Other than that, regulators like the Australian Competition and Consumer Commission will also need to give the green light plus a binding offer by Wesfarmers.
As part of the spree, the retail conglomerate plans to boost the pharmacy owner’s competitive position through supply chain capabilities, and enhanced online experience for their customer base. Meanwhile, the addition of API to the WES family will diversify the conglomerate to the growing health, wellbeing and beauty sector.
Shares in Wesfarmers (ASX:WES)
are trading 1.0 per cent higher at $57.22 while shares in Australian Pharmaceutical Industries (ASX:API)
are surging 16.1 per cent at $1.47.