API gets price for Priceline

HARDWARE and retail conglomerate Wesfarmers has managed to successfully woo Priceline owner Australian Pharmaceutical Industries after it sweetened its offer to take over the pharmacy group.

Wesfarmers increased its bid by 17c to $1.55 a share on Thursday after the API board rebuffed the company’s initial overtures in July.

API shares soared 16.1 per cent to $1.48 on Thursday – the highest level since April 2019 and reversing a slump following Wesfarmers’ first bid.

It is understood API had sought to re-engage merger talks with larger rival Sigma to create more value soon after Wesfarmers lobbed its first offer, which the API board branded opportunistic.

Wesfarmers chief executive Rob Scott (pictured) has ruled out seeking to lobby against changes to Australia’s community pharmacy laws, which stipulate that pharmacists must own pharmacies, preventing Priceline pharmacies being rolled out across Kmart, Target, Bunnings and other large-format retail chains.

API’s board said the revised bid was high enough for it to consider recommending to shareholders unless a superior offer was made. The group has now opened its books to Wesfarmers to complete due diligence, with the two companies entering a process deed, which grants Wesfarmers exclusivity until October 16 to form a binding offer.