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Wesfarmers moves to block Woolies’ bid for API

(Source: Bigstock)

Wesfarmers boss Rob Scott has said the retail conglomerate will not vote its 19.3 per cent stake in Australian Pharmaceutical Industries in favour of Woolworths’ competing $872 million takeover bid.

And, according to the business, a growing number of pharmacists and chemists find the overlap between Woolworths’ products and API’s uncomfortable, and fear that giving Woolworths control over such a large segment of the market would see competition suffer.

Woolworths has stated it doesn’t intend on changing the API business to integrate its brands into its supermarkets, and will continue to support a community pharmacy model, but Wesfarmers seems ready to target any growing discontent.

“Community pharmacists and Priceline franchisees have expressed concern about Sister Club customer data being shared with loyalty programs, where there is a significant overlap with product ranges sold in pharmacies,” the business said in a statement to the market.

Wesfarmers, which has owned a 50 per cent stake in loyalty program Flybuys since demerging Coles in 2018, said it will not share any of API’s customer data with the supermarket, and aimed to assure API and its pharmacists it’s $1.55 per share offer is still the best.

“Since announcing our proposal, we’ve continued to develop our plans for the API business [and] have met with and listened to representatives from across the sector, and we’re confident our proposal support community pharmacists and their businesses for the long-term,” said Wesfarmers boss Rob Scott.

When Woolworths made its bid for API, however, it seemed the pharmaceuticals giant was tentatively backing Woolies’ plan, stating in a letter to shareholders the new bid was likely to be superior to Wesfarmers’.

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