Wesfarmers has made its second proposal to buy up Priceline-owner Australian Pharmaceutical Industries for $1.55 per share, after its initial bid was deemed “opportunistic”.
The scheme of arrangement would see API shareholders paid out at a 37 per cent premium on the business’ one-month average, and allows for a maximum dividend of 5 per cent per share.
According to Wesfarmers managing director Rob Scott, API will serve as the basis of a new Healthcare division of Wesfarmers, and a platform from which it could spread into the health, wellbeing and beauty sectors.
“Wesfarmers supports the community pharmacy model, including the pharmacy ownership and location rules,” said Scott.
“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.”
And, the API board is recommending shareholders vote in favour of the offer in order to facilitate the purchase, but adds that Wesfarmers still needs to complete its due diligence and make a binding offer.
“The revised offer better reflects the strength and potential of our stable of businesses that have been built by the efforts and passion of all our people within API,’ said the business’ CEO Richard Vincent.