API suitor raises the stakes

RETAIL titan Wesfarmers has upped its ante in the takeover battle for Priceline owner, Australia Pharmaceutical Industries, seizing a 19.3 per cent stake in the company, despite facing competition from a “more favourable” bid. API’s board is currently assessing another offer from Australia’s biggest pharmaceutical wholesaler Sigma Healthcare. While the API board said Sigma’s cash and scrip bid – worth about $773m or $1.57 a share at the time it made its offer – was more favourable than Wesfarmers’s all-cash offer of $1.55, it is yet to label it more superior.

Regardless, Wesfarmers pulled the trigger on acquiring a 19.3 per cent stake in API, belonging to Washington H. Soul Pattinson on Thursday, in an apparent effort to accelerate takeover talks.

“Exercising our option to acquire 19.3 per cent of API reflects the group’s commitment to the transaction and the continued progress of the Wesfarmers proposal,” Wesfarmers chief executive Rob Scott (pictured) said.

It is understood Wesfarmers was concerned a deal could be protracted by months, with Sigma’s biggest shareholder Allan Gray demanding a shareholder vote on the takeover proposal, which if successful would be subject to competition regulatory approval.

API’s shares closed up 1.7 per cent at $1.52.