Wesfarmers were looking to dip it’s toes into the pharmaceutical industry by making an unsolicited bid for Pharmacy wholesaler API. API is one of the 3 major wholesalers in Australia and they are also owners of the Priceline brand.
Wesfarmers, who own big Australian such as Kmart, Bunnings and Coles, put in a bid of $1.38 cash per share bid for the company. In response to the bid, API considered the value and determined the as opportunistic and not compelling enough. API feel that Wesfarmers are taking advantage of the current pandemic and lockdowns which are driving down the price of API. API had a 30 per cent drop in profit for the half year to February 28.
Wesfarmers bid for API came as the company announced a downgrade in their earnings. API have said after very careful analysis and deliberation. API has assessed it’s own value and the offer of $687 million was undervaluing the company and accepting the offer would not be in the best interest of the company.
API has identified many positives that will ensure a bright future for the business including growing health, wellness and beauty sector and gradual recovery from Covid restrictions on retail. They have also modelled strong growth in eScripts and the Priceline App.
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