Retail Beauty recently reported that pending regulatory approval, Wesfarmers was to acquire Priceline parent company, Australian Pharmaceutical Industries (API), in a deal worth $764 million.
Wesfarmers, the owner of Bunnings, Coles, Kmart and Officeworks, eventually emerged as the winner of the acquisition following a bidding war with Sigma Healthcare, after Wesfarmers acquired a 19.3 per cent stake in API in October.
However, Woolworths has now thrown its hat in the ring, with API having received an indicative buyout proposal from the supermarket giant.
Woolworths announced to investors this morning that it had made an offer to acquire 100 per cent of the shares in API at a price of $1.75 a share, valuing the business at $872 million.
Woolworths Group’s Chief Executive Officer Brad Banducci said in a statement: “There is a compelling strategic rationale to support Woolworths Group’s acquisition of API. The combination of the two businesses is expected to lead to material shared benefits and synergies, much of which will be reinvested back into strengthening and growing API and its pharmacy partners.”
The Woolworths proposal is subject to a number of conditions including confirmatory due diligence and ACCC approval.
API said on Thursday Woolworths’ proposal was “reasonably capable of being valued, implemented and completed in accordance with its terms” and decided to allow Australia’s biggest supermarket chain to undertake confirmatory due diligence to make a final offer, Reuters reported.
However, the API Board has not agreed with Woolworths a binding process or timetable and intends to discuss these aspects further with Woolworths.