Wesfarmers to strengthen API brands

WESFARMERS aims to boost the competitive position of pharmacies operating under Australian Pharmaceutical Industries (API) brands, should its latest takeover offer succeed, the company’s Managing Director, Rob Scott, says.

Having seen an inital indicative proposal of $1.38 per share knocked back by the API Board in Jul (PD

29 Jul), the retail conglomerate returned this morning with an increased offer of $1.55 (PD breaking news).

In a statement to the Australian Securities Exchange (ASX), API CEO, Richard Vincent, said the new proposal “better reflects the strength and potential of our stable of businesses”, with the company’s Board stating that it intends to recommend the proposal to shareholders subject to the parties entering into a binding Scheme Implementation Deed “on terms no less favourable than the revised proposal” or no superior offer being received.

In a separate announcement to the ASX, Scott said the proposal would deliver an attractive premium to API shareholders, adding that “Wesfarmers supports the community pharmacy model, including the pharmacy ownership and location rules”.

“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,” he said.

“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.”

Under the new proposal, API and Wesfarmers have entered into a Process Deed, under which Wesfarmers has been granted until 16 Oct to undertake confirmatory due diligence to facilitate a binding offer.